Data-Driven Marketing Is Music to Pandora's Ears

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The streaming radio company leverages customer usage and demographic data to attract high-quality listeners.

Our marketing campaigns are highly data-driven. And given our strong market penetration in the U.S. (where Pandora has more than 78 million monthly active listeners), retargeting lapsed users is just as important as acquiring new users.

We want to make sure that we reach the right lapsed users—those with the highest probability of returning and becoming loyal listeners or converting to subscribers. So, we leverage usage and demographic data collected at registration to create high-value segments and retarget them in various media using personalized creative.

We also leverage data science to enhance our media and creative; for example, the data science team created a churn-probability score for every active Pandora listener. We determine the optimal value through testing. We serve listeners who have a certain churn probability a tailored message that's both on- and off-product. We apply similar data rigor to new-user acquisition channels, creating look-alike segments based on the attributes of our loyal listeners.

Considering that more than 80% of users listen to Pandora on mobile, most of our marketing is via mobile channels. This is beneficial in a data-driven marketing universe for two reasons. The first is the high advertising device-ID match rate with our data (vs. a Web-based email match rate). The second is the increase in in-the-moment targeting capabilities that mobile environments enable.

At a high level, all of this data usage greatly increases the efficiency and effectiveness of our marketing campaigns. We also use the data mentioned above for brand campaigns and programmatic buying to increase brand awareness, preference, and intent among our key target audiences.

In addition to leveraging data for segmentation, targeting, and creative messaging, it's important for us to be data-driven from a campaign-measurement standpoint. We set up systems to measure all mobile and Web ad clicks, impressions, and conversions and match them to a customer ID so we can evaluate campaigns based on deeper-level metrics, such as month-over-month retention and advertising return on investment. These metrics ensure that we focus our marketing efforts on consumers who will have the highest impact on our long-term business.

This system of measurement, on an ad unit and channel level, enables us to optimize campaigns on some of these deep metrics—in addition to our top-level KPIs, such as cost-per-install or cost-per-conversion. It also allows us to perform attribution, assuring that we don't double count any conversions cross-channel.

Data will continue to pervade every aspect of our marketing. We expect our consumer marketing data management platform (DMP) to be in full swing at the beginning of 2016, for example. This will allow for the optimal sequencing of brand and performance paid ads with owned media such as email, mobile push notifications, and house ads. 

Considering the success of our data-driven approach, our marketing will only become more data-centric in the future.

About the author:

As VP of growth at Pandora, Lisa Sullivan-Cross runs acquisition and retention marketing programs. Prior to Pandora, Sullivan-Cross served as VP of Marketing and GM of Mobile for Dictionary.com, where she built the mobile operation and ran marketing programs. She also served as VP of online at Nielsen Business Media, where she ran digital operations for Hollywood Reporter, Billboard, and Adweek. Other previous roles include director of online revenue at Lucasfilm, director of e-Commerce at Warner Bros., and director of marketing at Evite.

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