Web Radio Hits Targeted Tune

I was tuning in the shine on my brand new monitor
Doing anything my hard drive advised

With every one of those dot-com stations

Playing songs bringing tears to my eyes
—with apologies to Elvis Costello

No, it probably wouldn’t have been the same if instead of “Radio, Radio” Declan MacManus’s alter ego defiantly sang “Laptop, Laptop.” Still, today that’s where many people are listening to music. E-Centric recently talked with Doug Perlson, CEO of streaming audio ad marketplace TargetSpot Inc., about opportunities for advertisers in the online radio space.

E-CENTRIC: For advertisers, what are the advantages of Internet radio, as opposed to good old fashioned terrestrial radio?

PERLSON: There’s a few. First of all, there’s the ability to have control over your targeting. With terrestrial radio, as an advertiser, if you want to reach a specific audience, you’re limited to the geographic scope of a broadcast. You don’t definitively know who your listener is or where they are. With online radio, you can target down to the zip code, because you can identify the IP address of the listener as they open up their media player. When a business that’s only focused on a few zip codes, like a dry cleaner or a pizzeria, advertises on a terrestrial broadcast they reach a lot of folks who will never avail themselves of their services. But if you limit that to specific zip codes that you know are in a five-minute radius or a five-minute walk or whatever is relevant to your customers, your campaign can be more efficient. E-CENTRIC: What other ways can you target who is listening?

PERLSON: You can frequency tap and only pay for the listeners you actually know are listening to your broadcast. With terrestrial you’re relying on a sample. When your ad is third or fourth in the commercial break, you may or may not have lost some listeners, you don’t really know. With online radio, you have actual real time reporting that tells you definitely how many people have heard your ad and when they heard it and what station they heard it on.

E-CENTRIC: How are online radio advertisers typically judging ROI?

PERLSON: It depends. There’s definitely brand advertisers who are doing sampling and measuring how the brand resonated with a listener. Then there’s clearly the ROI driven advertiser who will either have a unique URL. Every audio ad also has a tethered clickable visual ad in the media player. When the listener hears that audio ad there’s often a call to action that asked you to click on the McDonald’s logo to win tickets to the Wiggles or whatever it may be. That’s the key, to have a real time call to action and have people take action immediately after they’ve heard that ad. And because so many online radio listeners are sitting on their computer, often at work, they’re a captive audience that can transact immediately. Advertisers can direct their link anywhere they want. Promo codes in the audio ads are often used to track conversion that way.

E-CENTRIC: Do those work?

PERLSON: Online radio is such that you’re probably only going to get about a third of the actual visitors to your site through the URL that you’ve provided in that clickthrough. One third will come in through direct navigation—if there’s an ad for McDonald’s, they’ll just go to McDonalds.com. The other third, especially with advertisers who have a less defined brand, will navigate to the site through a search engine. If you only track the clickthroughs on the media player, you’ll miss about two thirds of the visitors. We’re alpha testing a conversion tracker that will allow advertisers to drop a cookie on the listener to see how effective the overall ad campaign was.

E-CENTRIC: How’s inventory?

PERLSON:There is. Online radio had been exploding over the last few years and its not just streaming terrestrial stations. It’s everything from AOL Radio to Yahoo Radio to music social networks like Last.fm, Project Playlist and TheBlast.fm. Every couple of weeks we hear about some new online music community that has popped up.

E-CENTRIC: Is there a “typical” online radio listener.

PERLSON: It’s kind of all over the board. There are some similarities. In some of the broader research we’ve seen, typically speaking there is a daytime, at work, white-collar listener. Some stations skew older, some younger, some more male, some more female. That really kind of goes to the format of the specific station. We work with WFAN in New York, a very large sports station that skews heavily male. Some of the adult contemporary stations skew more female. Some of the pureplay online networks skew younger.