Tuesday’s article in The Wall Street Journal about radio’s online efforts painted a perplexing picture of an industry that’s accustomed to targeting, but hasn’t figured out the most targeted medium of all – the Internet.
What’s worse, the target that the radio industry is hitting online is incredibly valuable.
With the help of Ken Dardis at Audio Graphics, we’ve been surveying the massive online “listening” audience” for the past year and have found some incredible things. I’ll describe these results at next week’s Radio Forecasting Summit at the Harvard Club in New York. Here’s a preview of some statistics about the estimated 42 million online radio listeners:
- 42% of them said they bought something as a result of seeing an advertisement on the Web for a local business.
- 53% of them use online coupons, and half of them use an online coupon at least once a month.
- 33% of them use the Internet exclusively to look up information about local businesses, and 47% of them use both the Internet and the phone book.
If I were a local advertiser, I’d be very interested in this audience. Engagement is high, and these listeners have a propensity to search for information about local businesses on the Internet. Those are some powerful statistics that run the opposite of less-engaged mass broadcast audiences. (Think of hands on keyboards versus hands on steering wheels.)
Online Radio Listeners and Advertising Survey
So why isn’t the radio industry doing better? While some will say they are, the facts are pretty clear: Radio stations will get about $230 million from local online ad sales this year. Most of it will come from slapping banners on their CallLetter.com Web sites or inserting a $5 CPM commercial in their Internet audio streams. Meanwhile, the yellow pages industry, which is roughly half the size of the entire radio industry ($10 billion in yellow pages ad revenue, compared with radio’s $19 billion in local and national network radio sales), will get more than six times as much online revenue – about $1.5 billion. Even the TV guys are getting more than four times as much as radio, which is remarkable considering the fact that there are about half as many local TV salespeople pounding the streets compared with radio salespeople.
Here is one of the problems: There are 250 million people listening to terrestrial radio, yet only 3 to 5 percent of them are listening to their audio streams on the Internet. To radio GMs, the audience is too small to mess with. But as I’ve outlined, this audience is probably the distilled portion – the ones most engaged and most likely to purchase something.
I see encouraging signs that the industry is beginning to learn that it’s niche, not mass, that’s making the money on the Internet. Once they start paying bigger attention to smaller numbers – and realize the value of their hands-on audience – they have a chance of seeing better returns from their Internet ventures.
* Joint survey of 973 online listeners in Dec. 2008-April 2009 via Audio Graphics and Borrell Associates Inc.
Craigslist, Google, Monster, Autotrader… for local media the list of outside competition is growing longer every minute. In old westerns, the scene would be akin to Indians popping up over the horizon, arrows ablaze, pouring down on the covered wagons of the cowboys.
