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Could it be possible that Pandora has access to the IP address for the device when you initially connect to the service? It wouldn't be a specific geo location, but even "Northern California" would be beneficial for advertisers I would think?

I just checked and the iOS app does indeed send an approximated zip code to Ad companies.

http://ad.doubleclick.net/pfadx/pand.iphone/prod.nowplaying;...

Thank you for confirming this!

FYI, you X'd out your zip code but not your Designated Market Area.

Oh, whoops!

Android is Settings->Applications->Manage Applications. Clicking an app icon reveals permissions. Pandora has no entry for 'Your location', fine or coarse.

Just look at the geolocation of the last few pictures you took. There you are!