“2001 will be a big year for offline radio going online,” predicts Bill Piwonka, vice president of marketing for Measurecast, a new rival to Arbitron in the online radio audience measurement game. “It’s a way to keep the most active listeners. Many reconnect during work hours through the Internet, which results in more ad inventory and the ability to target ads to those captured listeners.”
Malcolm MacLachlin at research firm IDC says the big conglomerates are catching onto the web, realizing that Internet radio has advantages, mainly the ability to do more niche shows, to test out new artists and songs, and to determine what people like, then use that information for offline programming.
“Stations are looking to the Internet to protect themselves,” explains Thom Mocarsky, vice president of communications for Arbitron. “This has been mainly in the form of nichecasting—separate Internet-only variations of offline broadcasts that allow better ad targeting.” He says sponsorships have been widely used for online broadcasts. Add to this the ability of listeners to create their own stations, and the situation presented to the media buyer is clear: fragmentation.
“Buyers and planners will need to buy more niche ads to get good reach,” says Jim Meskauskas, chief Internet strategist for Mediasmith in New York. “They will need to be able to buy by demographics and behavioral profiles.”
The need to place more, smaller buys raises the question of whether ad packages deserve consideration. “Online/offline combo packages often don’t live up to their promises,” says LeAnne Rozner, media buying supervisor for interactive agency Exile on Seventh in San Francisco. “Publishers aren’t set up to do this, and you’re dealing with multiple reps—traditional and online agencies. It’s tough to coordinate goals and objectives and to get everyone to agree.” She recommends individual buys since packages are often overpriced. “I don’t recommend packages since ads can vary online and offline,” says Dan Ng, interactive strategist for TBWA Chiat Day. “Packages don’t really add value,” he says, noting the tendency of reps to throw in online as an “add on” when the differences of each medium deserve closer consideration.
Ng adds that online radio advertising is not being used to its full potential, noting that true convergence will occur with greater use of the web’s multimedia and interactive features. Increased bandwidth in homes will only fuel online radio listenership and corresponding graphics. “Radio has more impact than banners but tracking and accountability need to improve,” says Rozner. Mocarsky echoes this point, noting that less measurement data exists for online radio than offline.
Offline stations often have websites that can be useful for reaching listeners. “We’ve found the most effective local online buys as far as cost and ROI have been local radio and TV station websites,” says Rozner. Mocarsky sees stations sending listeners to their sites for coupons or other promotions as the ultimate convergence between radio and the web since it adds a visual aspect to radio, and stations can sell ads on their sites, which adds inventory.
Ads are also being placed on audio players such as RealPlayer, which Mocarsky says are mostly sponsorships combined with other forms of advertising and may not offer much in the way of targeting. The experts questioned didn’t see online radio ad revenue having much impact on that of offline radio, at least in the near term.
There has also been an increasing tendency of those with laptop computers to plug in headphones and listen to tunes. As the new 3G broadband wireless technology comes online this year it is likely that more handheld devices will be used to play audio. Indeed, IDC’s MacLachlin points out two companies that are already onto wireless radio: Tuneto and Supertracks. A phone is placed in a cradle to download music from a computer. The listener expresses his or her interests, and 95 percent of the code is sent to the phone. The remainder comes in wirelessly as a radio signal, which solves the bandwidth issue. Using headphones, the listener hears tunes. While this is a novel use of technology, it doesn’t appear, at least in the near term, that this will have a major impact on radio advertising, online or off.
Minor forms of convergence can be seen with other media as well. “When major personalities will be appearing or ratings books are coming out, ads for radio stations increase in print and on TV,” says Meskauskas. MacLachlin notes that Infinity Broadcasting has been very successful packaging billboards with radio ads.
In an age when it takes multiple media to reach a target market, crossovers such as these will likely increase and are hardly surprising. With the emergence of the Internet, radio will likely never be the same again. As the courts battle piracy and copyright issues, buyers and planners must take note that convergence has changed radio advertising for what will likely be a long time to come.