Targetspot has updated its yearly study of Internet radio listeners. The newly released information was first presented at RAIN Summit West by Targetspot CEO Eyal Goldwerger. Today, the company made the whitepaper more widely available on its website.
The benchmark study, done by Parks Associates and with the support of the Interactive Advertising Bureau, was first released at last year’s RAIN Summit West. Results of this year’s update show increased listening, particularly to mobile devices, along with increased social activity and response to audio ads.
The findings are all good – the audience is growing, taking Internet radio with them on mobile devices and sharing it with friends on social platforms. Listeners are interacting with their stations, and that’s having a very positive impact on advertising as well. Ad recall and response rates increased 11% since last year, with 58% recalling having seen or heard an Internet Radio ad within the last 30 days compared to 52% in 2011. Of those listeners, 44% responded to an Internet Radio ad in one way or another compared to 40% in 2011, a 10% increase versus last year.
Robin Flynn of SNL Kagan hosted a panel discussion called “Charting Digital Audio Ad Dollars” at RAIN Summit West on April 15th. Advertising is on the upsurge, she concludes, and cpms are solid.
Pandora SVP of ad sales Steven Kritzman, Katz Online President Brian Benedik, Spotify VP of ad sales Jon Mitchell and Alexis Van de Wyer, President of Adswizz, Inc. were the panelists contributing to the panel hosted by Flynn.
There is a healthy interest in advertising on Internet radio, and the cpms are getting stronger. Contributing to the interest is Internet radio’s ability to deliver key groups such as 18-34 year olds, Hispanics and upper income groups. Advertisers from many leading categories are now active in Internet radio, including finance and entertainment along with auto, restaurant and retail. Mitchell said that Spotify has 1,400 different advertisers.
Nonetheless, audio ads continue to be under monetized. Campaigns that include video in the mix with audio will produce a higher cpm overall, but targeted local campaigns are also pulling higher cpms. Benedik estimated that while generally network radio CPMs are $4 to $6, he said that geo-targeted campaigns can boost CPMs to $6 to $12.
Local advertising is gaining interest on Internet radio, led by the precise targeting abilities of Pandora. Thanks to listener registration, platforms like Pandora and Spotify can target by listener demographics, geographics, or taste in music. Benedik is looking for local revenues from political campaigns this year to be healthy.
The group acknowledged that monetizing audio effectively remains a challenge. Flynn notes: “Given that 70% of Pandora’s listeners listen on a mobile device, Kritzman said, the company is working hard to better monetize those listeners. Pandora execs have recently said the company’s RPMs, or revenue per 1,000 listening hours, are $60 to $70 for its desktop Internet business versus $20 for the mobile side, but mobile is expected to catch up.”
Targetspot has released a new whitepaper that examines the behavior of digital audio listeners with regard to discovering new music, giving and receiving musical recommendations, and music purchasing.
The paper points out that Internet radio listeners are an engaged bunch, 80% listen 1-3 hours a day. What’s more, 73% listen to more than one station a day and 46% often check out the name of the song or artist playing.
Other indicators of the level of engagement with new music that Internet radio listeners have include:
- 69% of Internet radio listeners have decided to purchase a song as a result of hearing it on an Internet radio station.
- 42% rate songs on Internet radio stations
- 38% recommend songs, artists or stations
- 32% check out what others are listening to online
- 57% search for new music
- 28% click on ads
- 32% buy songs online
- 22% buy albums online