Research on Pandora Media Inc (NYSE:P)’s ad load in August is in, and analysts at Canaccord Genuity believe that better things could be in store for the company in the next few months. Their research shows that audio ad load edged up a bit last month, although the numbers among core listeners keep bumping up against Pandora’s maximum ad load of six spots an hour. The non-core demographics, however, leave room for potential upside in the company’s revenue.

Results from Pandora’s August ad mix

In a research note dated Sept. 2, 2014, analysts Michael Graham, Maria Ripps and Austin Moldow said their latest market sampling covered New York, Portland, Ore., Austin, Tex., and Nashville, Tenn. They saw an average of 5.5 audio ads per hour in the company’s core demo, a sequential increase from 5.42 in July and up from 5.25 in June.

The analysts reported a 53% rate of local mix as a percentage of total audio ad spots. That’s basically in line with July’s 54% and June’s 52%. Here’s a look at the mix shift in local and national ads over the last several months (All graphs are courtesy Canaccord Genuity).

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The analysts also recorded a sequential increase in display ads in August, which rose slightly from 7.25 spots an hour in July to 7.33 spots in August. In addition, they saw an improvement in display advertiser quality. In the graph below, Tier I advertisers include companies like Amazon.com, Inc. (NASDAQ:AMZN), Best Buy Co Inc (NYSE:BBY) and Staples, Inc. (NASDAQ:SPLS).

Tier II advertisers include advertisers like Trulia Inc (NYSE:TRLA), GrubHub Inc (NYSE:GRUB) and local colleges, local homebuilders and local events. Tier III advertisers include mobile app game downloads like Kim Kardashian, Clash of Clans and others.

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In terms of video ad load, the Canaccord Genuity team saw an average of 1.2 ads per hour in August, an increase from .8 in July and 1 in June. They note that the number remains significantly higher to between .1 and .2 just months ago.

The analysts saw fewer ads among Pandora Media’s non-core audience. On average, 15-year-olds saw 1.75 spots per hour, while 60-year-olds saw an increase to 4.75 ads. They believe these numbers suggest that there is room for expansion in the company’s ad revenue per thousand impressions by increasing the number of ads seen by these groups.

Pandora’s local ad mix

Among local ads, the analysts saw Retail and Auto as the largest standalone categories. However, Auto declined as a percentage of the mix from 22% to 17%, while Retail increased from 23% to 30%. They attribute these shifts to the back-to-school shopping season.

They said that the Finance category made up 2% and included mostly local homebuilders. The Education category was made up mostly of local colleges and was 6% of the mix in August. They noted almost no political ads in August as well.

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The Canaccord Genuity team maintained its Buy rating and $43 per share price target on Pandora Media.