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Online Radio Battles for Listeners…And Hopefully, Online Ads

AOL’s online radio service is restarting with an unusual strategy: go after only half the number of audio ads that it ran before. The point is to challenge Pandora Media for listeners, Business Week writes, with a schedule that averages about 3 minutes of audio ads an hour. Pandora airs three 15-second commercials an hour, it notes.

These companies don’t rely on audio ads alone, however. Display ads and videos are also used to support the audio spots. Pandora, though, has made clear that it doesn’t believe there is enough mobile inventory available to support all the content available.  That may be changing though - at least in the online radio space - as these players change their strategies to compete for listeners.

AOL is going up against a renewed Pandora, which has developed listening audience that can compete for advertisers even in local markets, according to comments Pandora Founder Tim Westergren made at Web 2.0 Summit (via Information Week). He attributes the success to a diverse music catalog — and the iPhone. Now, 70% of Pandora's usage happens on mobile devices, he said.

Meanwhile, Pandora has inked mobile ad deals with recognizable brand names. Gatorade is running mobile banner ads on the Pandora platform, promotes its new G Series Fit products, and Victoria's Secret incorporated Pandora in its mobile campaign promoting its Heartbreaker push-up plunge bra.


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