Monday, October 1, 2012

Investigation: Advertising in Online Radio

     Ever since I got my first iPod and was able to drive, CDs and the radio sort of just went by the wayside. I went and bought myself an auxiliary cord, plugged my iPod in and listened to what I wanted. With Pandora radio I can get my "radio fix" while still listening to more or less what I want. It doesn't take long, though, before a pesky ad interrupts my station for a good 15 to 30 seconds. This assignment has got me thinking about how these ads are changing online radio as well broadcast radio and the impact these changes will have on consumers and producers.

     After a little research I have found a common and unsurprisingly obvious theme: radio advertisers want to target as wide an audience as possible. The best method at doing so is through online (internet) radio. Perhaps the most appealing attribute of online radio is the vast size of its audience. Linda Mackenzie of HealthyLife Radio Network argues that this audience is largest during the working hours of 8a.m. to 5p.m. because workers typically aren't allowed to surf the internet, but they are allowed to listen to online radio in the background. To get a sense of these numbers, Radio Active Media reports that recent studies have shown that online radio has an estimated 70 million listeners per month that are exposed to about 300 million hours of advertising. They also cite that the Radio Advertising Bureau (RAB) found that online radio advertising increases web traffic by a significant 52% and could grow even more with other forms of online advertising. This is very good news for companies wanting to market their brand. 

     Joshua Sinason of The Stairwell writes about the software company, Carbonite, that really made a name for itself by utilizing online radio advertising. Carbonite began marketing its name on the online radio show hosted by Chris Hardwick's company Nerdlist. This particular radio show's targeted demographic are those that use social media like Facebook and Twitter, so it was a quick way for Carbonite to get its name out and develop their brand. The blog goes on to say that there isn't much of a difference between online radio and broadcast radio because in the end they're both about 30 seconds of audio for producers to get their message across. 

     However, blogger Chris Pirillo argues that the differences between online and broadcast radio are actually greater than the fact that they are both audio. The greatest difference, he argues, is that broadcast radio is limited to certain frequency bands, but with online radio, one's internet connection is the antenna to his or her radio. Therefore, when companies are airing their ads, with broadcasting they have to capture their audience in the live moment that their ad is aired. But with internet radio, the only limit is the companies' creativity to capture their audiences' attention.

     Now capturing the audience's attention is perhaps the most essential part to reaching the largest audience possible. Therefore, companies' would be interested in seeing what demographics are listening. Rob Favre of Triton Digital argues that with broadcast radio, advertisers are getting hit and miss results because they don't know exactly who is listening. However, with online radio such as Pandora, users are required to give demographic information such as age, sex, location, etc. Advertisers can use this information to market locally as well as specifically to certain demographics. 

     So, even though I'd rather do without ads, I now have a better understanding of why I am being exposed to the ads that I am. Through this research, I believe that online radio will soon begin to dominate over broadcast radio in terms of music, talk shows, and in sending general information to the public. With growing numbers of listeners, there is beginning to be more of a push for advertisers to take advantage of online radio and the numerous demographics it can reach. Current technology allows producers to monitor and track who is hearing their ads, so there is incentive in that fact alone. While there is no indicator that broadcast radio is going anywhere anytime soon, it will be interesting to see how online radio will change the function of broadcast radio with more advances in technology. 


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