Lisa Sullivan-Cross, Vice President, Growth and Retention, Pandora, shared her thoughts on data-driven marketing and its importance for today’s organizations during her keynote address to Argyle’s CMO membership at the 2016 Chief Marketing Officer Leadership Forum in San Francisco on June 8. In her presentation, “Insights Into Data-Driven Marketing at Pandora,” Sullivan-Cross explained how Pandora utilizes customer usage and demographic data to attract high-quality listeners.
According to Sullivan-Cross, Pandora did no marketing prior to her joining the organization. But to that point, Pandora had grown to be a major digital music player by focusing on providing a quality product and customer support.
Today, Pandora boasts millions of users across the globe, and the company streams more live content in the U.S. than YouTube and Twitter combined on a monthly basis. The company continuously explores ways to foster long-lasting partnerships with its users, too.
So what have been the key factors behind Pandora’s success? One of the keys has been Pandora’s focus on return on investment (ROI) of its users.
“We never drive users just to be driving users,” Sullivan-Cross said. “We always focus on driving high-quality users that have a high ROI.”
For every dollar Pandora spends, the company is able to track view-through and click-through conversions, Sullivan-Cross noted. This enables the company to track ROI over an extended period of time.
“We don’t have a brand awareness problem. The problem we have is preference and consideration.”
In addition, Pandora has developed a lifetime value model that offers some support, but the company still needs to track the revenue and ROI of its marketing efforts.
“[A lifetime value model] isn’t good enough. You actually have to look at the revenue and ROI from the specific marketing you’re doing and be able to identify the specific break-even point for each channel,” Sullivan-Cross said.
However, it is important to note that the use of data-driven marketing and direct response marketing are two different things.
“A lot of people think of data-driven marketing as direct response marketing. That is definitely not the case,” Sullivan-Cross said.
A data-driven marketing approach requires an organization to dedicate the time and resources to track retention, revenue and ROI. An organization also needs to track user satisfaction as well as leverage the user data at its disposal to find ways to bolster interactions with users consistently.
Sullivan-Cross pointed out that Pandora uses a single point of view system to evaluate user data. This enables the company to streamline the process of managing user data and discover actionable user insights quickly.
Furthermore, having user data at its disposal ensures that Pandora can optimize the value of its retargeting campaigns.
“By using that retargeting scenario, we’ve been able to dramatically increase efficiency of the campaign and really leverage the inventory that we’re running,” Sullivan-Cross said.
Demographic data provides exceptional value for Pandora as well.
“A lot of people think of data-driven marketing as direct response marketing. That is definitely not the case.”
Pandora is able to collect, monitor and evaluate demographic data day after day. By doing so, the company is able to deliver the right messages to the right users at the right time.
“We literally can serve ads to those specific customer IDs on all of our publishers, Sullivan-Cross noted.
Pandora pulls lists of all of its active users, creates lookalike segments and much more thanks to the user data that is readily available.
Sullivan-Cross noted that Pandora boasts a 92 percent brand awareness score across the United States, but the company struggles in two key areas:
- Preference — Is Pandora the top choice among streaming music services that are available?
- Consideration — Is Pandora among the top three streaming music services that a consumer will consider?
“We don’t have a brand awareness problem,” Sullivan-Cross pointed out. “The problem we have is preference and consideration.”
In many cases, Millennials use up to four streaming music services in a given month. And with Pandora’s data-centric approach to marketing, the company is able to improve its preference and consideration levels in the hopes of making its streaming music service the top choice among Millennials and other groups.
Lastly, Sullivan-Cross said data science plays an important part in her company’s marketing efforts.
With data science capabilities, Pandora is able to learn about its users and identify behaviors and trends. This data empowers Pandora to find the best ways to build long-lasting partnerships with its users and ensure that they are fully supported at all times.
Plus, data science gives Pandora the ability to gain a competitive advantage over its rivals. The company can learn key user behaviors and trends and work to keep its users happy by delivering outstanding support for years to come.
“Data science is an integral part to data-driven marketing,” Sullivan-Cross said. “Every single user at every active moment, we know what their churn probability is based on the actions they have taken up until that point.”
As Vice President, Growth Marketing at Pandora, Sullivan-Cross has strengthened the Pandora brand and developed marketing programs that contribute to the company’s active user and revenue growth, as well as its customer retention gains. With over 20 years marketing experience, she is an innovative data-driven marketer with a track record building and growing businesses at companies such as Lucasfilm, Warner Bros., Dictionary.com, Evite, and Nielsen Business Media (Hollywood Reporter, Billboard, Adweek).