Fledgling Internet Radio Sector Shows Promise

by Larry Dobrow, Feb 26, 2004, 12:00 AM

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Two months into 2004, online radio has yet to infiltrate the public consciousness to the extent that its boosters had predicted. But despite a candid assessment that the medium is merely "plodding along," radio veteran Ken Dardis believes his just-released 21st survey of online listeners has generated key nuggets of data that boosters of the nascent format might use to lure skeptical advertisers.

Dardis is far from a disinterested party. His RRadio Network, a community of 42 Internet radio stations that have aggregated their audiences for sale to advertisers, continues to struggle to generate the level of attention Dardis thinks it deserves. That said, the mountain of data he has accumulated over the last two years could help RRadio, as well as other online broadcasters whose moniker does not include AOL or Yahoo!, to excite otherwise apathetic media buyers.

The survey model isn't exactly brain surgery. Visitors to RRadio sites (which include www.boomerradio.com and www.beethoven.com) are given the opportunity to answer three questions; at least one of these involves a specific product category. "You want to keep it as narrow as possible," Dardis explains. "If the question is about travel, you want to be able to take the results and go to a Travelocity or an Orbitz, and say: 'Look at the people who are listening.'"

In fact, the most interesting detail to emerge from the survey deals with the resurgent travel category. Of the 2,049 survey respondents asked how they book their vacation plans, nearly 75 percent answered "mostly by myself;" only 21 percent said they either occasionally or regularly use travel agents. Considering the extent to which the travel category has come to rely on the Internet, a finding such as this could convince, for example, a marketer like the Mexico Tourism Board to shift marketing dollars initially budgeted for travel agents to online radio.

Given one of the survey's other findings, it's unlikely that auto insurers will soon do the same. Asked about online ads for auto insurance, slightly more than 60 percent of respondents said they "don't pay attention to any of it." And while it's difficult to take this result that seriously (at any given time, how much of the online population truly has auto insurance on its mind?), it nonetheless came as somewhat of a surprise to Dardis, especially in light of the previous survey's finding that 31 percent of online radio listeners plan to purchase a car within the next year.

Dardis' enthusiasm about the online listener profile he is compiling is tempered only by his belief that the medium has failed to market itself effectively. "There's been almost nothing, either internally or externally," he laments. "Do I think we're ripe for the picking? Oh, yeah. But until [online radio] gets some kind of promotion behind it, not much is going to happen. There's sort of a 'we built it, now they'll come' attitude."

Eric Ronning, co-founder of online radio rep firm Ronning/Lipset Radio, doesn't necessarily agree. While he acknowledges that many marketers have taken a wait-and-see approach toward the medium ("but the marketing's going to come as soon as people get more educated about it"), Ronning points to several signs that lead him to believe that the medium is headed in the right direction.

For one, industry bible Radio & Records added Yahoo!'s LAUNCHcast and Radio@AOL to its listings a few months ago, affirming the Ronning/Lipset conviction that online radio should be viewed like traditional radio. Online radio has also proven highly measurable; Arbitron uses roughly the same terminology to measure online stations that it does for traditional stations.

"You hear so much about XM [Satellite Radio] getting to 1.5 million listeners, and that was with tons and tons of marketing," Ronning says. "Well, online [radio] has four million per week. People are really responding to it."

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