Online ad dollars are going to be more heavily tied to ROI during 2009 than ever before. JP Morgan has updated an annual report called “Nothing But Net” which puts the focus on online media from an investors’ standpoint. It’s a smart, broad study with some very salient takeaways for digital media which can easily be applied to Internet radio.
Internet companies will continue to grow, says the study, as broadband uptake continues and connection speeds continue to get faster. Bankruptcies in the Brick and Mortar retail sector will most likely mean additional growth in eCommerce. These factors are important in order to understand the mechanics behind the relatively “soft” recession forecast for digital media in 09.
Advertisers will be more focused than ever before on performance of their ad dollars. Digital media that cannot account for results will not do well. The study uses online video as an example – online video use is way up – according to comScore, 34% more people are watching video online than a year ago. The problem is that the ad platform does not promote or cater to performance based ads, and has developed instead into a branding play for tv like video spots. Pricing is cpm based pricing and campaigns are evaluated as branding rather than results oriented campaigns. That’s a no-go in this economic climate, says the study. In the United Kingdom, 85% of online ad dollars are spent on performance based media – and that’s the way it’s going to be here in the US for the foreseeable future. CPM based pricing will only alienate performance based ad dollars and drive them to other digital media platforms.
To tap in to digital dollars in 2009 and beyond, Internet radio must understand these requirements. Internet radio is capable of providing performance based results. To do so, sellers must insure that audio creative is specifically designed for online audio use. Use the audio message to call for action from the listener – to click a banner, visit a website, type in a code. Make sure you understand what the buyer expects in terms of measured results. Work hard to make sure the audio/banner works for the advertiser. If they see a return on their investment, you’ll see a return on yours.