• by Larry Dobrow , November 10, 2003

To date, marketers haven't exactly embraced the nascent medium of Internet radio. There are any number of reasons for this, ranging from their usual hesitancy to back an untested medium to the economic malaise of the last few years. But with consumers starting to listen in droves - Yahoo's LAUNCHcast had two million listeners last month, while Radio@AOL notched around four million - radio planners are no longer getting laughed out of the room when they propose diverting a few of their clients' network radio dollars onto the Web.

It is into this fray that radio-sales vets Andy Lipset and Eric Ronning have chosen to launch Ronning/Lipset Radio, billed in a company press release as "the first online radio representation firm aimed at bringing traditional advertisers into the new era of online radio." Though Lipset quickly hedges on this statement ("we're not saying that we're the first ones to do this"), it's clear that there are few media firms attempting a similar feat: devoting all of their resources to a format that many marketers dismiss without much thought.

"What [online] needs are people who can speak the language to ad agencies," Ronning says. "That's where our backgrounds in traditional radio come into play." Ronning previously worked in the radio arena for Clear Channel/Interep, while Lipset spent years at D&R Radio/Interep. Over the last few years, the pair has honed its Internet marketing experience, with Ronning spending time at Yahoo! and Lipset serving as director/sales for AOL Music.

Clearly Lipset and Ronning are true believers - "otherwise, we wouldn't have left really good-paying jobs and situations for this," Lipset cracks - but they understand that for the near future their job will be one part sales, two parts evangelism. "This is a get-the-word-out-there type thing," Ronning adds. "Really, our competition is the lack of knowledge in the marketplace."

So far, marketers haven't been especially supportive of Internet radio, perhaps because initial sales efforts positioned it as something new and distinct, rather than as the next logical step in radio's evolution. This made little sense, as online radio stations don't require the download or purchase of additional hardware or software. "To listeners, it's just another form of radio," Lipset says, adding that early online radio cheerleaders might have done themselves a disservice by overhyping the new medium. "They tried to talk about all the bells and whistles, when they should have started simple. They should have been talking about the ability to run at 30 or at 60 [seconds]."

A few relatively recent developments, however, have given boosters of online radio new ammunition. The most important of these has been support from measurement giant Arbitron, which now uses mostly the same terminology to measure online radio that it does for traditional radio. "You can't walk into a buyer and start talking in a different language," Ronning explains. "You have to relate to them in traditional Arbitron terminology - cums, et cetera. To Arbitron's credit, they've taken the online radio world and made it very traditional [in terms of measurement]."

Mediaedge:cia senior vice president, director of radio Kim Vasey agrees that Arbitron's backing has been pivotal. "They stuck in there through thick and thin," she says. "That [agencies] can go to a client and say 'there's an established measurement methodology for this [medium]' means an awful lot."

And surging listener support certainly hasn't hurt. A recent Arbitron/Edison study found that 16% of Americans have listened to Internet radio in the last month and 8% in the last week. And while satellite radio has been the recipient of borderline euphoric press and analyst coverage - witness the bouquets hurled at XM for recently hitting the one-million-subscriber mark - Internet radio boasts substantially more listeners, as witnessed by the LAUNCHcast and Radio@AOL numbers. "The anecdotal evidence about its growth is stronger than what satellite radio has," Ronning affirms.

As for online radio groupies, they're a demographically desirable lot, falling almost exclusively within the 18-49 age range. "They're tech-savvy. They may speak a different language than your regular radio listener," Vasey says. Adds Ronning: "They're at a desk with big broadband pipes doing work on the computer. If we're right, you'll start to see fewer and fewer clock radios on peoples' desks." With this in mind, solid bets for online radio include computer hardware, banking/financial and consumer electronics companies. Ronning points to cell phone service providers as a potential target in the months ahead, as these companies will likely be eager to reach online listeners (as well as just about everybody else on the planet) with the message that consumers are now allowed to keep their numbers when switching carriers.

As for the medium's future, well, Ronning and Lipset wouldn't be getting into the business full-time if they weren't bullish about its potential. For now, they believe that the best way to sell Internet radio to advertisers is as a complementary buy. Too, they hope to sell marketers on the notion that online radio offers a relatively clutter-free environment, with few online broadcasters running more than six ad units per hour. "Advertisers can stand out," Lipset notes.

Vasey, a longtime supporter of Internet radio, believes in the medium's potential - she's approached a handful of clients about advertising on it - but cautions that it has "a long, long way to go." Among her major concerns are still-skittish advertisers, who want to see results before investing in a new medium. "If clients are looking at budget cuts, it's hard to get them to spend somewhere they haven't spent before," she says. "They're pressed for results and ROI, so some of them aren't going to jump in anytime soon."