Radio is the perfect medium for convergence. There is little need to change the content (mostly the same music or talk found on radio), average bandwidth size will deliver it (although broadband is better) and most consumers can listen right from their current PCs with a good set of speakers. In fact, an Arbitron/Edison Media Research study claims 34% of all Internet users have listened to Internet radio within the last three months.
What’s interesting, I find, is what they are actually listening to. Arbitron reports that the top six streaming audio websites (based on total monthly aggregate tuning hours, Feb. 2000) are Internet-only sites led by NetRadio’s five different audio channels, and are not radio stations at all. It’s not until the seventh ranked station, WJZW-FM, a smooth-jazz station in Washington D.C., that an actual “real station” makes the list. After that, about 40 of the next 50 stations are actual radio stations. No matter what the source, consumers demand their music in any form that is easy and convenient (I’ll make Napster another column) and are beginning to listen to their PCs to get the songs they like.
So where does the convergence of radio and the Internet leave media planners and buyers? Through the Internet, every station, whether virtual or with a really big antenna, is now national. Although many national advertisers buy network radio, place spots in nationally syndicated programming, or heavy-up in the top markets, it is local advertisers who more commonly buy radio. For the most part, stations live and die by the local department stores, car dealerships and grocery stores that pound away 52 weeks a year. The Internet could change all that. Local radio advertisers in Kansas City, for example, are now delivering their messages to uninterested consumers in San Antonio via the Internet.
For radio via the Internet to become a viable advertising medium, there may need to be a technological way to address the out-of-market delivery of local messages. A company called Hiwire may be just the way. Hiwire gives broadcasters the ability to strip out local ads and replace them with targeted ones for listeners outside the listening area. Through their technology, users receive new local ads based on their age, gender and ZIP code. The ad sits on a person’s desktop and is played when a tone indicates it’s time for an ad. Broadcasters can charge for the ads they slip into the stream. Now these same consumers in San Antonio can listen to their favorite Kansas City station via the web, but hear a targeted spot for a local San Antonio retailer. Hiwire launched this service in May and has signed up 100 stations.
With an innovation such as this, media planners and buyers will more and more see radio and the Internet converge as both a content distribution source and a medium for national and local advertising.