Welcome to Episode 5 of The CMO Show, a podcast about brand storytelling and the future of marketing.
Our guest, Nicole McInnes, marketing director at Pandora, shares the story about how the Internet radio service survived the dot-com crash. Nicole also reveals how she rose above an inherent anger she felt towards the blokey culture apparent in the advertising industry in the early 2000s.
Host: Mark Jones (MJ)
Guest: Nicole McInnes (NM)
MJ: How did Pandora survive the .com crash?
NM: Well, Tim Westergren tells a great story about that. He almost didn’t survive it, and I think he gave over 300 pictures to venture capitalists to get the money to keep Pandora going, and I think there was also around 50 employees that worked for two years without any salary so they invested, so it’s a passionate bunch of people that started Pandora and kept it going until the first person. And I think actually the story goes that the reason he got the venture capital in the end was because they were so impressed that people had worked for no salary for two years.
MJ: That is amazing. How does that even work? How did they encourage people to stay for that amount of time?
NM: I think they just believed in the idea and obviously in Tim Westerngren, the founder, and his passion for it. He was a musician, so he had this idea of building a ‘music middle class’ – so for example, musicians that couldn’t get the big deals because there’s only a very small percentage of people that do get a deal with a major label.
MJ: So how would you describe Pandora now versus then?
NM: I don’t think it’s changed that much. It’s much, much bigger, it’s a juggernaut now. It’s got nearly 300 million registered listeners and I can’t believe it’s still growing in the US but it is, I see the data myself every day, but it’s still very true to its roots. So Tim’s still there and he still really has set the culture and the humility of the company to stay true to that vision of, making not only artists’ lives better, but listeners’ lives better. So it actually feels good to be working for a company that has such a product that doesn’t do any harm to anybody in any way shape or form.
MJ: So tell me about the business side of things. Where’s the money come from, how do you make sure that all of this is sustainable?
NM: Yeah, this is a good question, I remember when I joined I was thinking that. It’s really important to keep it accessible, so one of the tenets for Pandora is that it’s free and that’s a different business model to a lot of our competitors who source their funds from subscriptions – monthly subscription costs. So it’s really important to us to have advertisers as partners, so it’s an unashamed ad funded model, but what we try and do because the listener is at the centre of the experience, is make sure that the advertising is also relevant because with the data we know about them – we just have postcode, what they like to listen to, their year of birth, and their email address – but with some of those demographics plus their listening habits, we try and target advertising to them and we don’t flood them with advertising because there’s no point to that because we want them to enjoy the free experience, we’re not trying to push them onto a paid experience at all.
MJ: So in your role how do you focus your efforts? Are you thinking about the advertisers and how to go after them, are you thinking about the marketing to the community? You’re probably going to say both aren’t you?
NM: No, I’m not. My main focus is on the listeners. So what I’m doing in Australia and New Zealand is really trying to get the story of Pandora out there, because it is a slightly different story and a lot of people don’t know it, and there are a lot of myths around streaming music that need to be dispelled. There’s all sorts of myths out there, and so my job is to get the product into listeners’ hands, let them experience it for themselves, and to also just tell the truth about streaming radio in this market.
MJ: I know that gender in the broader sense is something that’s been an interest of yours in terms of the C-Suite or senior executives and so on, what’s been your experience there and maybe how you’re thinking about some of those bigger issues that we deal with?
NM: Yeah, I was definitely an angry young woman for a long time.
MJ: Why’s that?
NM: Well I was in advertising in the early 2000s and it was still very – in the creative side of the business in Australia – it was still very male-centric.
NM: Very, very blokey. I mean, I think somebody got fired when I was still in advertising, for saying that women just weren’t funny and that’s why they weren’t creative.
NM: Yeah, he was the head of WPP or something and they forced his resignation which was very interesting, but, even though he said it out loud, it was still held by a lot of people who didn’t say it but just made business decisions based on that view. And so I remember leaving advertising with that as one of the reasons, there was a variety of other reasons, but I just didn’t see a future for myself. I was young and ambitious and I didn’t see that my talent wouldn’t be taken advantage of in that industry in Australia.
The CMO Show production team
Producer - Nikki Majewski
Design Team Manager - Daniel Marr
Audio Engineering - Jonny McNee
Graphic Design - Chris Gresham-Britt