Direct response advertising will be popular in 2009 as advertisers focus on results and more inventory is available. According to AdAge, these are good days for direct response marketers, who are seeing better deals for inventory than they have in the past.
Most interactive ad dollars are performance driven, often with payouts that are based on a cost per click or cost per acquisition basis. With proper audio messaging and banners or codes, Internet radio can compete for these dollars effectively. This recent chart of cost per click data on various advertiser industry segments shows that some industry payouts – insurance in particular – can be fairly high. CPC’s are calculated based on closing ratios and average sales. Higher closing ratios and average sales net higher payouts.
More good facts – Nielson recently reported which sites do best in converting their site traffic to purchases. Proflowers, an online retailer who has used Internet radio consistently for years, converts close to one out of every three visitors to purchases. A list of the other successful online marketers is here.
Digital media can be purchased on a CPM basis and then analyzed on a cost per click or cost per aquisition basis as well. A savvy buyer can purchase digital media using a cost per thousand, and then analyze results using return based metrics. A savvy seller should ask and understand what the buyer’s expectations are upfront for the campaign and monitor results. Digital media buyers expect to be asked for this information and provide it weekly and sometimes more often. They also expect to be able to cancel campaigns that are not delivering for them — another reason to stay in touch with the results.
Performance driven campaigns are an opportunity for Internet radio. Sellers who get to know the turf can reap the rewards.
Shoppers today are more influenced by product information they gather themselves online than advertising they see on television or elsewhere. That’s a significant trend identified in a recent study highlighted in the Wall Street Journal. This new type of shopper, called a New Info Shopper researches everything before making a purchase – from shampoo to cars and vacuum cleaners.
According to the study, 92% of the respondents said they trusted their own research on a product more than information provided by a sales clerk, and only 17% felt that a tv ad gave them information that would help them make a purchase decision. This should stop brand managers and advertisers in their tracks. If consumers are relying this heavily on getting their information online, advertisers should be offering as much information as possible about their products, and using advertising to let consumers know where it’s available.
Certainly there’s a place for brand advertising, but consumers believe the “information they find, not … the information that is spoon-fed to them, and the vast number of clicks today prove that they really are devoting time and energy to ferreting out detailed info before they buy.” A good example of this was an ad campaign for Dyson vacuum cleaner which took a technical approach in its ad campaign featuring James Dyson explaining how he had transformed the vacuum cleaner with new scientific principles. Consumers loved teh technical approach and sales took off.
The bottom line – consumers are making informed decisions about purchases based on information they get online. Ads that treat them as informed consumers and help them get the information they want become useful resources. Imagine an Internet radio campaign with audio that informs the consumer on useful information about a product, along with a url or banner that leads them to a website where they can get more. According to this new information, that’s what consumers want.
Flycast, a mobile broadcast streaming platform, has launched a new ad platform that can target ads by various criteria such as gender, age, location, and even mobile device. More importantly, Flycast announced that their ad serving platform will utilize Doubleclick‘s ad services platform. Doubleclick (owned by Google) is one of the digital industry’s most widely used ad serving and accounting platforms. Doubleclick’s ad serving and reporting platform, called DART, is widely used and accepted by interactive agencies.
Flycast says that through it’s platform, mobile ads can be delivered to anyone, anywhere, anytime. They offer audio ads and display ads, and offer ad opportunities on “three of the most popular smartphone platforms – the Apple iPhone, the new BlackBerrys (Curve, Bold and Storm) and the T-Mobile G1.”
Their newly announced mobile ad platform integrates some advanced listener features as well, like allowing users to continue to listen to a station even during extended periods without a connection; the ability to skip back to early segments or the beginning of news, talk and sports radio shows, skip to the next song on certain webcast stations and pause on all stations. The BlackBerry smartphone version of FlyCast supports background play, allowing users to listen while they use their handset for other functions, and also supports playback through Bluetooth® stereo headsets.
All of this sounds pretty nifty to me, and certainly makes the Flycast streaming mobile ad platform a nice option for stations that are looking for a way to make their streams interesting to mobile listeners and monetize the impressions.
According to a report in Mediaweek, Verizon Wireless has moved to sponsor a branded new music channel on 21 Clear Channel stations that will be offered as an HD2 side channel and streamed online. Curiously, the article positions Verizon New Music as a branded HD channel which will also be streamed, although trends and recent information on listening would certainly indicate that the streamed audience will be greater than the number of people listening to the over the air HD service. The article claims that Verizon Wireless is the first national advertiser to move into HD Radio, so perhaps that’s the reason for the emphasis.
Verizon Wireless will receive 2 20 second spots per hour on the branded station, as well as sponsorship promotion mention on the associated stations which include some of Clear Channels biggest stations like WHTZ-FM in New York, KIIS-FM in Los Angeles, WKSC-FM in Chicago, and WIHT-FM in Washington, D.C, and weekly listenership over 30 million.
Last month the Wall Street Journal published an article that questioned the future of HD Radio and pointed out that Internet radio may well be the bright spot for all the broadcasters who are developing additional channels of programming for HD, because they can easily also stream those additional channels and amass streaming audience, which is growing at a much faster rate. See my post about it here.
Regardless of the reason for the HD spin, Verizon Wireless has made a significant move into digital audio with Clear Channel’s New Music channels. This is an excellent example of leveraging cross platform technologies to attract an advertiser like Verizon Wireless. The channel’s 18-34 audience is a perfect match for the advertiser and the exposure across alternative audio platforms creates a new media package that positions Verizon Wireless as a savvy hip brand.
Imeem, a trendy social streaming music service, was named to AdWeek’s Top Ten Digital Hot Sites list earlier this year (see my post here ). Now they’re hot for another reason – they just announced that they’ve nabbed Kia Motors as inaugural sponsor of their mobile application for Android, Google’s mobile phone platform, with exposure across Imeem’s entire web based platform as well.
Reportedly, the ability to connect with consumers within a streaming social music experience that extends to portable devices drew Kia to the sponsorship. “imeem has created a way for advertisers to live at the center of consumers’ social music experience,” said Jason Meil, executive vice president and director of Innovations at Initiative, Kia Motors’ media, marketing and digital company. “Working with imeem will enable Kia Motors to meaningfully tap into an engaged community where millions of people express themselves with music and media on a daily basis.”
This makes so much sense for an auto dealer that wants to reach a younger consumer, establish a hip and trendy connection, and smash the traditional auto manufacturer advertising mold. Kia will be featuring the all new Kia Soul in this advertising.
It’s apparent that Imeem got creative with packaging elements that extend the brand across mobile and web based platforms that satisfied the advertiser’s needs. No doubt, the ability to be first advertiser to fully sponsor the platform is appealing as well. Earlier this fall, Pandora announced that Becks Beer and Best Buy had signed on as ad partners for their mobile iphone platform (read about that here). Despite the poor economy, Internet radio brands and their mobile applications are attracting new ad dollars.
This has not been a good year for automotive sales, and domestic car dealers are doing particularly badly. A recent study released by Autobytel surveyed hundreds of auto dealers to find out how the recession is affecting them and what they are doing about it. While the news is bad all around, domestic car dealers in particular are feeling the downturn, with 73% reporting lower sales this year than last.
According to this survey, one of the main strategies to deal with the lagging sales is to increase the amount of their budget spent on Internet marketing. 69% of the dealers surveyed reported that they will increase their spending online, contributing to a 91% that will either spend the same or more than they did last year on Internet marketing. Interestingly, the brands surveyed reporting the strongest sales gains in 2008 — Honda, Hyundai and Nissan — also ranked as the top three brands with the highest percentage of dealers increasing their Internet marketing spend. Read more about the survey here.
This is a great opportunity for Internet radio to show local dealers that it can drive local sales online. Local Auto Dealers have long been a strong category for local radio stations. Extending these relationships into a campaign on the streaming side makes a lot of sense. Local broadcasters should package website banners, streaming audio, and maybe even video gateways to create online campaigns that can deliver results and show local auto dealers that they’re an excellent online option for their ad dollars.
Today Targetspot announced that it has purchased RLRadio for an undisclosed amount. Ronning Lipset Radio was the largest independant Internet radio ad sales network, with a list of stations that included CBSRadio’s group of streaming stations, AOLRadio (now operated by CBSRadio), Yahoo’s Launchcast, Live365, and some other smaller online stations. Co-Founders Ronning and Lipset will remain in place as Co-Presidents.
Targetspot’s advantage in the Internet radio marketplace is an ad insertion technology that enables them to identify and target deliver streaming audio commercials by geographic location and demographic for stations that register listeners for that information. They do business with Entercom, CBSRadio, and many other groups. CBSRadio also has an investment in Targetspot. It’s possible that CBSRadio provided the common ground for these two entities to consider a merger or buyout of one by another.
In July of 2007 Katz Radio Group acquired the other large independent Internet radio ad sales network, Net Radio Sales.That company represents many large broadcast companies including Cox, Entercom, Cumulus, CMP, and many others as well as many large independant Internet brands such as Digitally Imported, AccuRadio, 1.FM, Club977 and Radioio. Recently, they have also been exploring some joint selling opportunities with Clear Channel’s group of streaming stations. Katz also has a strong relationship with technical partner AndoMedia, who provides some tech and audience measurement advantages to that network.
The new partnership gives Ronning Lipset some new technical features that will add value to their relationships with their stations and advertisers.It also gives them access to additional funds that – according to industry buzz – they had been seeking. One interesting note is that in March Targetspot received funding from Bain Capital Ventures. Bain was one of two private equity firms involved in the recently completed buyout of Clear Channel, who owns Katz Radio Group (and Net Radio Sales).
One of the first big hurdles the Internet radio industry had to overcome was ensuring that all commercials licensed for broadcast use by The American Federation of Television and Radio Actors (AFTRA) were also licensed for use on the Internet. While this issue has been resolved, some advertisers and their agencies and stations remain confused about the issue.
This problem was born when broadcasters began to stream their content and therefore agency produced radio commercials began to air on Internet streams. AFTRA, protecting the interests of the artists who produced the commercials, called for commercials that were not licensed for streaming be taken off the air immediately or broadcasters would face penalties and possible litigation. This caused many broadcasters to stop streaming entirely, because they did not have a way to schedule and insert different commercials on their stream than on their broadcast.
As they say, necessity is the mother of invention: all of this caused the development of Ad Insertion technology that nearly all broadcasters who stream use today so they can run a different commercial log on their stream and broadcast. The development of Internet radio as a separate revenue model for broadcasters was born.
Tomorrow’s post will summarize the current licensing rules for running broadcast spots on the stream.
The primary measurement metric for all online media including Internet radio is the impression. Impressions are a simple, basic measurement unit. One person exposed one time to one ad equals one impression. But using impression based measurement does not mean that GRP metrics are obsolete. GRPs have long been the standard for traditional media planners and buyers. Converting Internet radio or interactive campaigns to Gross Rating Points can be useful because enables a planner to make cross media comparisons.
You won’t find Gross Rating Points reported on interactive research tools, but it’s a simple math formula that can easily be integrated into a spreadsheet. A GRP (Gross Rating Point) is 1% of the measured audience. For Internet radio purposes and for the sake of consistency, I recommend using the Arbitron definition of the measured audience, either for a certain market or entire US, but this is certainly a point to discuss with the planner or media buyer. Once you define the market the formula is
# of impressions / defined market population = GRPs
There’s no reason you can’t use the same formula to compute banner, mobile, video or other impression values. This is an easy way for radio and Internet radio sellers to begin to quantify the value of packages that include audio impressions, banner impressions, and perhaps other assets as well. Impressions do not tell the whole story, but this is one way to educate buyers on the value that they are getting from the cross media package you are selling.
Yesterday’s post talked about the need to create radio ads specifically for Internet radio. Internet radio’s audience is online and different than the broadcast radio audience. Time spent listening is on average twice as long as it is to broadcast radio. Therefore, new rules apply. So what is the best length for an Internet radio commercial?
Shorter ads online
The Internet is a fast paced environment with lots of information and choices just a click away. Recommended lengths for Internet radio spots are 10 to 30 seconds. I got input from several online broadcasters who not only advocated for those shorter lengths but also emphasized the need for creative that is suitable for the audience. Ari Shohat, owner of Digitally Imported, one of the largest independent online broadcasters, said bad creative can do more than just fail to work, it can negatively impact the listener, and actively drive them away from a product. More important than the length, says Ari, the spot must be suitable for the audio environment and the listener. “Ads have to be made in a way that resonates with the audience – do that and you can get away with longer ads and still make it a successful campaign.”
Mike Roe, Founder of Radioio agrees. When advertisers speak to “this [online] audience it needs to be in a manner beffitting it and in a way that doesn’t insult it, or interrupt it for too long.” Mike also advocates for “NPR style” sponsorships that are integrated into the content. There’s sense to this: the Internet radio listener is well educated, high income, and online savvy, and could be attracted to a more sophisticated advertising approach.
How about creating unique pods for advertisers to sponsor?
This creates a technological challenge for broadcasters who are streaming their on-air product and inserting ads over the stream. There are creative solutions to this, such as creating short valuable non-commercial content that could surround or piggyback 20 or 30 second spots. Something like this could create more value for the advertiser and the listener. Either way, it’s very important for Internet radio sellers to educate advertisers and agencies on the need for distinct creative for Internet radio in order to ensure a positive ad experience for their clients and a renewal on the campaign.