News that Nielsen will purchase Arbitron is good news for online radio services like Pandora. Nielsen, which measures many media segments, already has a strong foothold in digital and cross platform measurement, not only in the US but globally. Yesterday’s announcement that they will purchase Arbitron was quickly followed by statements that they will measure online radio services like Pandora as well.
I call this excellent news. Arbitron, which has dallied in Internet radio measurement several times in the past, recently denied Pandora a place at the table when they sought to be measured alongside broadcast radio counterparts. Pressure from those broadcasters, who spend a lot of money with Arbitron, certainly appeared to be one of the reasons that the company decided to measure streaming only as an adjunct to broadcasts. That decision enraged advertising agencies as well as online only services.
I think Nielsen’s entry into radio and digital audio measurement would be an excellent thing for the marketplace. Their multi-media measurement platform and global footprint likely mean that broadcasters won’t be able to flex their muscle to influence company decisions that are better made with a broad perspective. Nielsen is a company that understands that today’s advertisers need measurement tools that can enable accurate media placement across many platforms and technologies. Folding radio into that mix can benefit radio as advertisers are able to view it as an important part of a larger multi media landscape.
In 5-10 years the term “radio” will encompass all audio content that is distributed as continuous programming and delivered via various technologies including broadcast, satellite, and streaming. Radio devices will receive such programming from all of these sources seamlessly, so there will be less and less focus on which technology is delivering it. The listener will select programming from a list of presets that shows broadcast radio next to streaming radio next to satellite choices.
As they are empowered by more and more choices, the consumer will become more selective and less tolerant of mediocre programming. It will be the content offerings rather than the technologies that draw in the listener.
With so many listening options, listeners will be less tolerant of ad content that offers them no value. This will further cheapen mass appeal advertising, but it will drive the use of more targeted, relevant ad creative. Free, ad-supported stations will obtain permission from listeners who will opt to receive targeted, relevant ads. Those ads will be more valuable to them and will show a higher return on investment for the advertiser.
The ability for listeners to interact with and respond to programming and advertising will become critical, stations and advertisers will develop more and better ways to do this such as sms and online 1-click solutions that make it as easy for listeners to respond to an ad as it is to give a song “thumbs up” or “thumbs down.”
I’m thinking more and more these days about the large number of listening choices that consumers now have and the way that that will impact just about everything in the future. Listeners are empowered and can choose exactly what they want to listen to, on what technology and device, and how they want to hear it. I think the winning platforms will be the ones that recognize that. What do you think?
Lipton Iced Tea has teamed up with Pandora for a summer promotion that encourages listeners and tea drinkers to “Discover the Natural Side of Music.” All natural Lipton Iced Tea will sponsor a summer long promotion designed to emphasize the all natural ingredients in Lipton Iced Tea by tying in with acoustic concerts, artist videos and exclusive channels on Pandora.
Lipton and PANDORA internet radio will continue to engage fans by bringing exclusive and compelling content from major artists including Train, Kelly Clarkson, Bon Jovi, and more—representing a variety of genres. Each will share the unique and personal natural roots of their music as part of a video series on Lipton’s Facebook page.
Fans can also interact with the natural elements of music on Lipton PANDORA internet radio stations to cater to their musical preferences. Stations include Lipton Pop (Pandora.com/liptonpop), Lipton Country (Pandora.com/liptoncountry), Lipton Rock (Pandora.com/liptonrock) and Lipton Hip-Hop (Pandora.com/liptonhiphop).
This is a nice illustration of smart creative ways that Pandora and other online stations can offer value to advertisers that’s far removed from cost per thousand advertising. Pandora’s channels are the centerpiece of this brand’s promotion, the added value that they are offering their customers. The interactive channels that they have created will extend their brand further than any generic ad campaign ever could.
Are you thinking about how can you create smart advertising that adds that kind of value for your advertisers?
Strata, a provider of software solutions for media buyers and sellers, has released results from a 3rd quarter agency survey that provides insight into media spends by agencies. Digital dollars are increasing, but TV and cable continue to see the largest dollars spent.
Cross platform advertising strategies are more common, with 47% saying they are “doing more cross-platform advertising than ever before.”
More than 80% of the agencies said they are spending more on digital than ever before. Of the digital dollars being spent, most of it is in display and search, with location based ads turning out to be not-so-important to buyers.
In terms of how the agencies are placing those digital dollars, lots of it is going into ad networks, but buyers are also turning to their traditional media contacts to place digital dollars – such as on TV, Radio or Print websites. It would appear from that info that those TV and Radio salespeople have been able to leverage their agency relationships to sell their digital assets alongside their traditional units.
While broadcasters gathered in DC last week, digital folks were in NYC at the Interactive Advertising Bureau‘s annual MIXX Conference, part of Ad Week in that city. (It’s a shame that the two events are at the same time.) During their event, the IAB released its “Digital Audio Advertising Overview” Platform Status Report, a first ever effort by that organization to define the digital audio space and make it easier for digital advertisers to understand it.
The document “defines the digital audio category and provides a snapshot of the marketplace audience size and demographics as well as outlining the players in the market, the vehicles currently used to deliver content and advertising formats, and some of the most important metrics for measuring success.” It’s a white paper that provides a nice overview of Internet radio in terms of audience and measurement, ad opportunities and standards. While the report calls itself an overview of the digital audio space, in fact it concentrates solely on Internet radio – I saw no references to podcasting, on demand streaming, HD, or any other types of what I consider to be audio of the digital variety.
The paper provides research from Nielsen, Bridge Ratings, AndoMedia as well as Edison Research/Arbitron’s comprehensive annual Infinite Dial Study to define the market size, provide listening data and identify the ad units typically available. It also lists major advertisers such as Chevrolet, Ford, McDonalds, Dunkin Donuts, American Express and Home Depot (the list is longer), and includes a case study of OnStar on the Katz Online Network as well as Pandora.
With this white paper the IAB, the main ad association for the digital market, is finally acknowledging digital audio as a digital ad option for advertisers, so it’s a great thing. With all due respect to those involved, it’s long overdue. While there is little that’s new in the report, it’s all pulled together very succinctly into a credible presentation that sellers can use to educate advertisers. It should be particularly useful with digital ad agencies who have been slow to spend on Internet radio. Having the IAB stamp of approval means a lot.
Congrats to Brian Benedik of Katz360 and Andy Lipset of TargetSpot, co-chairs of the IAB’s digital audio committee, and the companies that are on the committee: AndoMedia, Google, Clear Channel Radio, Comcast, comScore, Cox Cross Media, ESPN, Pandora Media, and others. Hats off for a job well done.
You can download the report here.
Last week when I read that Google had decided to abandon its newspaper ad sales platform, I wondered if their attempts at selling broadcast radio inventory would be next. While I was mulling this over I received a call from Kate Kaye at Clickz, who had the same thoughts and wanted to know what I thought. Thanks to Kaye for sorting through some of the history on this, you can read her article here.
Google purchased dMarc Broadcasting early in 2008 as a way to enter the terrestrial broadcasting marketplace with dMarc’s broadcast traffic automation platform. Their thinking was that they would apply a similar business model to their AdWords program, which allows smaller advertisers to purchase highly targeted ads. From the beginning they encountered problems – many broadcasters simply did not want to work with Google and would not sign over any inventory. Without inventory, the were hard pressed to say they had targetability on a local level. They did eventually get a deal with Clear Channel, and then with Emmis, and their site now says they have 1600 stations.
Stations tend to use the program to sell off remnant inventory, and as I told Clickz, there’s plenty of remnant inventory in this economic climate, which might make it easier for them to make inroads with stations.
Google has yet to enter the Internet radio market, but a company that has a similar business model in that space is Targetspot. Targetspot sells targeted ad campaigns to small businesses and sells inventory for Entercom, CBSRadio and other broadcasters. Last fall, they added a national sales strategy to their approach when they purchased National Internet Radio Rep Firm RL Radio. Recently, they’ve added more and more stations to their network. It would appear that their two pronged strategy of selling directly to local advertisers as well as using sales pros on a national level is working. They’ve succeeded in aggregating a substantial national network of inventory.
Apparently Google is staying in the broadcast radio ad sales game. Which makes me wonder whether they have begun to eye the Internet radio space as a source of inventory. In this economy, they may find a few more broadcasters interested in hearing what they have to offer.