Wednesday, November 3, 1999

Now Hear This

By Sean Carton, Managing Partner Carton Donofrio Interactive


Did you know that one of the biggest up-and-coming advertising opportunities may be right under your nose at this very moment...any you've never thought about it?

Imagine a web-based advertising medium with an average 70 percent click-through rate for content information, a 60 percent click-through rate for advertiser information, and a 49 percent "buy" rate for online merchandise? Is it possible? Am I smoking something? (Don't answer that!) Why haven't you heard about it?

Perhaps you have.

This super-effective medium is streaming media, streaming Net radio, in particular. According to some new studies from Arbitron New Media, Net radio may be the best untapped interactive marketing resource that you're not using.

Unfortunately, most people who think of Net-radio or other streaming media put it into one of two categories. Either Net radio is something they only think teenage mutant hackers listen to in between MP3 pirating sessions, or Net radio is something that sounds too bad to be taken seriously as an advertising medium. They're wrong on both accounts. And here's why.

According to a January 1999 study, nearly one quarter of all Internet users have tuned in to Internet radio. Mainly, these listeners are younger and male - 33 percent of listeners are 12-24, 28 percent are 25-44, and 19 percent are 45+.

They tend to listen out of market, with about half listening to stations inside their own market and a few sampling stations from around the world. Interestingly enough, many report that they're not listening at work (as conventional wisdom has it) but are listening at home as they surf the web, taking time away from other traditional media such as radio and television.

Some of the most interesting facts about web radio listeners is their willingness to do the things that e-tailers love. First, web radio listeners are far more likely to purchase from a web site than non-listeners - 43 percent of web radio listeners have purchased online vs. 30 percent of non-listeners.

Online listeners are also a lot more likely to bookmark a site (70 percent vs. 46 percent). And they respond to advertising - 41 percent of streaming media listeners (dubbed "streamies" by Arbitron) have visited web sites they've heard on the radio vs. 24 percent of non-listeners.

But online streaming radio has several problems for advertisers.

With somewhere between 1,000 to 2,000 radio stations broadcasting online, ads that play in any one local market are often playing all over the world via streaming media. Most stations haven't quite gotten a handle on this yet and haven't begun to target ads to the web or for broadcast.

And while many of the media players (such as Microsoft's Media Player of Real Networks' Real Player) have some support for ads, no one has really figured out a way to dynamically target audio ads like we target banners today. But they're working on it.

Today, if you're going to go streaming media, then radio is the way to go. Video quality is currently not good enough to make it very attractive to advertisers (unless delivered over a high bandwidth connection). However, sound quality is good now and getting better - streaming MP3 servers such as SHOUTcast are beginning to become more popular, and anyone who's ever experienced the sound quality knows why.

Sean Carton is Managing Partner of Carton Donofrio Interactive