• by Erik Sass  @eriksass1, July 17, 2006

Although it's touted as "ad-free," satellite radio may provide a perfect vehicle for a new generation of direct marketers, according to Jordis Rosenquest, senior vice president of communications strategy for Targetbase, part of Omnicom Group's Diversified Agency Services division. On the surface, this conclusion is at odds with the chief finding of a study recently completed by Targetbase, which found that consumers value its "commercial-free" aspect above all others. But the reality is more nuanced.

For one thing, Rosenquest says, the popular perception of subscription satellite as "ad-free" isn't correct: "It's already ad-supported, although consumers might not recognize them as ads. They're not your traditional 30-second spots, but it's there." Rosenquest points to program sponsorships and branded infotainment as places where advertising has already infiltrated. She is hopeful that openings for direct marketers aren't far behind.

"Satellite radio offers some great possibilities," Rosenquest adds. "The backbone of our industry has been direct mail and TV." The interactive quality of digital radio, she notes, will open all kinds of direct channels. "New things are becoming possible." And with sponsorships and branded entertainment, direct marketing does not need to be intrusive. People associate direct marketing with junk mail, "but with good creative and a good strategy, it doesn't have to be annoying."

Satellite radio is a growing medium. By 2010, Targetbase estimates that about 20 million American households will have satellite--roughly double the current number. Beyond that date, Rosenquest warns, the business is approaching a crucial juncture: "The numbers suggest satellite is close to maxing out on the early adopters, so it's time to start looking at the early majority."

And that, in turn, means new satellite models may be required, including some form of ad support to lure consumers who don't want to pay. But obstacles remain--the largest one now is privacy concerns. "There's a lot of information that is not being accessed today for the very good reason that it's protected by privacy laws, but that could change," she says. "Or alternatively, you can have an Internet-style approach with an opt-in, so advertisers could bring you things for categories you are known to prefer."