Apple has plans to add both targeted local advertisements and broadcast radio stations to its iTunes Radio music service in the coming months, according to a report from The Information. The move will boost its advertising efforts and introduce new content on iTunes Radio, better positioning it to compete with market leader Pandora. Apple is also expected to begin advertising its own iTunes content through the iAd network.
In a move that strikes at the heart of Pandora's advertising business, iTunes Radio is expected to enable locally targeted advertising later this year, according to ad buyers who have spoken to Apple. Apple may begin promoting iTunes with "house ads" on its iAd mobile advertising network, an unusual move for the company.
Apple has reportedly contacted broadcasters like Cumulus Media, the second largest operator of radio stations in America. Cumulus serves approximately 150 million listeners in 110 metropolitan areas and could potentially bring multiple local stations to iTunes Radio. Apple made its first moves towards introducing local content on iTunes Radio earlier this year with the launch of the National Public Radio (NPR) channel, which will eventually include local stations offering a mix of live and taped news.
Since the launch of iTunes Radio, Apple has had a renewed focus on advertising, redirecting its iAd team to monetize iTunes Radio through advertising sales. While the company has signed deals on a national level with several high profile companies like McDonald's, Nissan, Pepsi, and Procter & Gamble, local ads are new territory.
The addition of local ads could significantly boost the revenue iTunes Radio pulls in, which is a major threat to Pandora. Pandora currently focuses heavily on local ads with sales teams located in more than 35 markets around the United States.
In April, Apple moved towards expanding into Pandora's local advertising territory by making it easier to create and buy iAds on its network. While a developer account was previously required to create an ad campaign, that restriction has now been removed, making it simpler for advertisers large and small to create ads for the platform.
Apple's efforts to bolster its iTunes Radio revenue through local content come as the company works to acquire Beats Music, a paid streaming music service that delivers content on demand. With both iTunes Radio and Beats Music, Apple is hoping to boost its overall music sales, which have waned in recent years.
