Spotify vs. Pandora - Which is Right for You?

SETTLING THE DIFFERENCES
Trying to figure out the differences between Pandora and Spotify audiences is not hard. There’s plenty of data to be found, and even a quick Google search has the potential to overwhelm you with charts, comparisons and statistics. But the important differences between the two giants of music streaming are found in the more considerable pieces of demographic data that keep appearing in every study.

MUSIC TO YOUR EARS
Firstly, Spotify listeners are a bit younger and more tech-savvy. Whatever the reasons may be: The Spotify user experience or its’ youthful branding, there’s no disputing it. According to Comscore’s latest numbers, approximately 54 percent of US Spotify users are between the ages of 18 to 34, while Pandora users skew a bit older, with the largest group of users falling somewhere between the ages of 25 to 44 years-old. 

To put that in one perspective, Spotify users are more likely to use Gmail, whereas Pandora users are more likely to use Yahoo! Mail. To some of you, that may not mean much, but for those of you who are in on the joke, the idea of using Yahoo! Mail, to a younger audience, is culturally verboten. In other words: Yahoo is not the most hip.

But that’s okay. After all, 44 year olds are consumers too, and they represent a very important segment of the population. Hawking higher ed? Maybe Spotify is more in tune with your audience. Selling financial services? Perhaps Pandora is music to your ears. But the best part? Both can be segmented, optimized, programmatically placed and highly tailored to your target audience, making either streaming radio service a very savvy buy for any data-driven marketer.

ADDRESSABLE VS. NON-ADDRESSABLE AUDIENCE
If you do decide to add streaming audio to your marketing plan (which you should), be sure to keep one important metric in mind: "addressable audience." An addressable audience means a group of users who listen to their content for free, with ads. Non-addressable means the audience is using the paid version of the audio-streaming app and are therefore listening without ads, and therefore cannot be reached by any campaign. As of now, Pandora has an advantage. Although Spotify recently boasted about 95 million active users within the U.S., while the number of ad-supported Spotify listeners is 65 million users (i.e. addressable). Pandora’s numbers look more like 88 million active users (U.S), with about 71.5 million of those being non-paid, ad-supported and therefore addressable.

THE BETTER BET?
Despite the fact that Pandora and Spotify attract different audience segments, there is a time and place for each platform to be used. Both platforms have shown growth, continuing to evolve how ads are delivered. This past fall, Spotify teamed up with Warner Bros and experimented with 3D sound and a video ad. The ad mimicked the movie theatre surround-sound effect in order to create a more unique experience and break through the ad clutter.

On the other hand, Pandora offers thousands of audience segments to construct ads specifically for your target audience. If you have a smaller budget and a highly-targeted group you’re trying to reach, Pandora may be a better play. In addition to Pandora’s AdsWizz acquisition last May, Pandora continues to enhance their targeting techniques by adding the right players to their team. AdsWizz specializes in programmatic audio advertising; something Pandora has beat Spotify in providing, in the past.

MIND THE TREND
When it comes to digital and mobile marketing (streaming audio included) it’s often more important to pay attention to trends rather than current figures. And if you abide by this rule of thumb you must note that Spotify's audience numbers are steadily trending up at a much greater rate than Pandora's.

*Global growth trends

THE BOTTOM LINE
While both Spotify and Pandora both have their pros and cons, the biggest thing to take away is that streaming radio is a fantastic and efficient place to generate highly-targeted user engagement, establish a great branding campaign, or extend and supplement your current marketing plan.