AOL Inks Deal With Radio Rep Firm
- by March 21, 2004
The deal is significant because AOL is the biggest provider of online radio--Arbitron reports that the AOL Radio@ Network reaches more than 4.5 million unique visitors per month, who average nearly five hours of total listening time each week. Arbitron on March 18 reported that for February, the Radio@AOL Network and Yahoo!'s Launch were the highest-ranked commercial Internet broadcasters with 25,113,703 and 19,173,760 hours of total time spent listening, respectively.
Online radio listeners are tuning in at work--a highly sought-after daypart--and represent attractive demographics. There are 195 million radio listeners in the United States and 33 million total online radio listeners, according to Arbitron's data from the spring of 2003.
To put the emerging category into perspective, Arbitron reports that 39 percent of people over the age of 12 say they have at some point listened to radio online, 16 percent accessed it within the last 30 days, and 8 percent within the last week. In 2000, the percentages were far lower, with 19 percent of people over the age of 12 reporting they tuned into Internet radio at some point, 5 percent within the last 30 days, and 2 percent within the last week.
"The numbers are growing. The medium is still new--it's only been around for five to 10 years," said Bill Rose, vice president and general manager, Arbitron. "The impression people have is that [Internet radio listeners are] younger adults, but it's everyone from ages 12 to 54."
In fact, while the Internet radio audience is far smaller than traditional radio, 70 percent of the audience is in the 18-49 demographic with the primary target 25-34, followed by the 18-34s and then 35-44s, according to Eric Ronning, managing director, Ronning Lipset.
Ronning Lipset will pitch AOL's inventory to radio buyers at media agencies, and to marketers as an additive component to traditional radio buys. It will sell 30- and 60-second ads for the online properties for the same price as traditional radio ads.
"The idea behind this is that just like in traditional radio, there is the 30- and 60-second inventory," said Andy Lipset, managing partner, Ronning Lipset. "With roughly 1.5 million listeners per week [on AOL], that's an audience that's very marketable, and essentially, the idea is how do we put marketing messages within that community and that audience," he said, adding: "We are taking the medium and making it very similar to terrestrial radio. We strongly believe that this is another form of radio."
Arbitron thinks so too: "We're big believers in having the medium sold professionally--it ends up making it easier for agencies and advertisers," Rose said. Arbitron recently announced that it is revamping its ratings methodology for the online radio segment. While it will track the weekly ratings through March 28, it is working with the industry to rejigger the measurement process.
AOL, which has pushed aggressively on the music and entertainment fronts, sees potential in the online radio space. "Terrestrial radio playlists have shrunk--it's harder for music fans to find what they're looking for," said Evan Harrison, general manager of AOL Music and AOL Radio@ Network. AOL offers 175 originally programmed stations across 16 genres plus news, sports, and talk radio.
"This is a new area for us to sell, and the opportunity to go with a third-party rep firm will help us create a significant new revenue stream," Harrison said. For its part, AOL is focused on selling music packages and sponsorships, some of which will include the radio properties, across its entire online network. Hummer recently bought a sponsorship to AOL Music's Broadband Rocks series.
