According to Jupiter Media Metrix forecasts, by 2005, nearly 5 percent -- $1.4 billion -- of an estimated $30 billion spent on radio advertising will be for Internet radio ads and Frank Thorsberg of IDG reports that new technology will permit the Web versions of broadcast radio stations to sidestep labor concerns that pushed many for-profit stations off the Internet in April.
Ad-insertion technology adopted by Clear Channel Communications is expected to provide more music options on Web radio, but listeners will get more targeted advertising from stations that want to make money online.
The streaming media audience in the United States is following the same pattern as the surge in Internet popularity, says Warren Schlichting, Hiwire chief executive officer. Internet audio started to enter the U.S. consciousness in 1998 when it drew 14 or 15 million listeners, he says. In 1999, the numbers spiked to 30 million. In 2000, it rose to 45 million, and the trend this year indicates the audience may pass 70 million.
But the boom went silent in May due to contract and copyright disputes over creative talent additional fees when ads recorded for use in terrestrial radio were also used online. However, in conjunction with a copyright royalty arbitration panel in July, Clear Channel Internet Group (CCIG) is resuming Netcasting by the first of 250 of its parent company's stations, starting with the top 50 markets.
Clear Channel stations' Internet advertising will be targeted at specific listener groups according to age, gender, location, and station format. "We're delivering an audience to advertisers," says Hiwire's Schlichting. "Basically, we're separating audiences from content." With the new technology, the station can deliver two sets of ads--conventional ads to terrestrial signal listeners and targeted commercials to Net listeners based on where they are, who they are, and what type of station they're listening to.
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