Pandora 3 most important KPIs to the music industry

Artist Marketing Platform is the best artist tool of any streaming service. Period. Wait, remove that period. Pandora just announced some new features.

By Glenn Peoples, Music Insights and Analytics at Pandora

There’s no such thing as a free lunch, goes the saying, but it doesn’t always apply to a streaming service’s artist tools.

Just as Pandora rolled out new features on its analytics and marketing tools, it also announced it passed 1 billion impressions of artist-created messages. If you’ve been listening to Pandora lately, you have probably heard a message from a favorite artist talking about new music, a mixtape, or a local show. These messages are pretty cool, and there’s a reason Pandora picked you out of its more than 76 million monthly listeners: science. More on that later.

Artists can use the promotional tools on Pandora’s Artist Marketing Platform with assurance they will reach the right listener. Sure, there are other ways to promote a song or album. Social media provides a connection to fans, too, but those services might require real money for artists to reach their fans on social media. The Artist Marketing Platform provides insights and access to Pandora’s 76 million monthly listeners at no cost.

Impressions have value. If Pandora’s 1 billion audio message impressions carried the same cost as an average Facebook ad campaign, they would be worth about $40 million. (That number is based on the average click-through rate for Pandora’s audio messages and a cost of $1.68 per click for a highly targeted Facebook campaign.) This is effectively found money. For independent artists and artists on independent labels, who often have few resources for online marketing campaigns, audio messages provide an incredible return on investment.

It’s safe to say Pandora’s Artist Marketing Platform is superior to its peers. Other streaming services also offer analytical insights that show an artist how and where people are listening to their music. Fortunately, these artist-focused products have practically become a basic requirement of doing business. But while the competition provides only a glimpse of their listeners, like a child looking at toys through a store window, Pandora has created a hands-on suite of artist tools. Artists can use the platform to communicate directly to their fans and promote their music, shows and new releases.

On Tuesday, Pandora unveiled four improvements to the Artist Marketing Platform. Three are new features and one is an update to an existing feature. It’s not easy to get press coverage for product updates, features or milestones, but the breadth of Tuesday’s news coverage, from Forbes to Hits Daily Double to Variety, suggests a couple things. First, people are still taking note of Pandora’s investment in tools for the artist community. Second, the milestone of 1 billion message impressions is something of a head-turner.

Two of the new features, Promote Show and Promote Single, increase the effectiveness of artists’ audio messages. Promote Show helps drive ticket sales by improving artists’ ability to geo-target fans across all the dates on a tour. Promote Single allows an artist to link a specific audio message to a Featured Track campaign. Another new feature is Custom Profile Photos, the most-requested feature since last fall.

Featured Track has also been improved. Here’s how it works: an artist chooses a song — perhaps a new single — it wants listeners to hear. Featured Track will gently speed up the process by which listeners are recommended the track. This is fundamentally different than going through a gatekeeper — a radio DJ, a programmer — to reach listeners. Music discovery at Pandora is still a listener-driven phenomenon even with Featured Track’s assistance. If a listener thumbs (likes) a song, Pandora will spin it more often. What a listener hears is ultimately up to the listener. You can peak under Featured Track’s hood with this detailed post by a member of Pandora’s data science team or get a broad overview of the feature at the Artist Marketing Platform website.

These new features have the added element of improved targeting. Pandora has tweaked the way it estimates a listener’s affinity for a particular artist. Put another way, additional signals are being taken into account to refine and improve the accuracy of both artist audio messages and featured tracks. Better accuracy results in messages heard by the most receptive listeners and tracks streamed to those listeners who are most likely to give the song a thumb. Artists want more thumbs because they will result in more spins and more seeds (a seed is an artist, album or track that’s used as the starting point — a seed — for a new station).

A note to artists: Featured Track is a tool that’s too good to overlook. Its positive impact is even greater for artists who receive fewer than 1,000 spins a day, those up-and-coming, developing artists who have the most to benefit from access to powerful marketing tools.

In early trials, Featured Tracks has posted great metrics. Take the thumb ratio as an example. Artists want listeners to thumb their songs because Pandora will adjust future recommendations accordingly and, most importantly, play the song again. When listeners hear a featured track, there’s an 82-percent chance they’ll give the song a thumb. That’s good targeting. Artists also want listeners to use them or their music to seed a new station. There’s been good performance here, too. Listeners of featured tracks are now creating 56 percent more seeds. A new seed is like a discovery engine. When a user creates a new seed based on a featured track, Pandora receives that signal and will spin that song and that artist more often. More thumbs and more seeds have given featured tracks an average growth in spins of 25 percent.

Featured Track’s impact is stunning when viewed from space: 5.2 million incremental spins per week, or 1.8 billion incremental spins on an annual basis.

Digital music has been on a long, winding road leading to Tuesday’s announcement. Today, data is considered a resource to be shared with artists and labels. There’s a strong sense of partnership in the way Pandora builds its marketing tools. But it hasn’t always been this way in the digital music business. A few digital services tried to leverage listener data in nefarious ways.

The original Napster’s early business model called for listener data to be a defensive wall to protect against record labels agitated by the copyright infringement taking place on its platform. As described in the book All the Rave, Napster wanted to grow large enough to leverage its data on users’ listening habits and their music collections. “Napster would be able to tell Warner Brothers that the average person who had Cure MP3s on his computer was most likely to be interested in finding new music by the Violent Femmes,” it explains of the “too big to fail” strategy.

The infamous Grooveshark also planned to leverage its data. This illegal streaming service planned to accumulate 100 million users and then sell listener data to record labels, ensuring that what Grooveshark would pay record labels in content costs was less than what record labels would pay Grooveshark for granular listener data, according to an email from the parent company’s chairman revealed in a lawsuit against the company. It wasn’t a good strategy and Grooveshark went out of business in 2015.

Today’s legal services can be protective and secretive of their data. Not a single music download service has offered the transparency, analytics and artist tools that Pandora offers. But there’s good news for artists: the more people shift their listening from owned music to streaming, the more insight artists will have of their music.

In February I outlined 10 things Pandora is doing to move the industry forward. The Artist Marketing Platform was on the list, along with direct licensing agreements, the new Pandora Premium and Pandora Plus services, Thumbprint Radio, and original content like Questlove Supreme. Pandora helps artists and the music industry is many ways. But the Artist Marketing Platform is something artists can use to help themselves.