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June 2013
On August 28, 1922, WEAF in New York received $50 for 10 minutes of airtime from Hawthorne Court Apartments and, from there, radio advertising was born. In the 90 years since, the medium has grown and evolved, but the basic premise remains the samean advertiser pays for time, plays a message and hopes the right audience is listening. Internet radio is changing the game. For the first time in radio history, brands can show pictures and videos in tandem with an audio ad, target listeners at incredible granularity, and allow the customer to directly respond to the ad.
GroupM Next conducted a survey of 1,000 radio listeners in the United States to research the growth of radio, dissect how Internet and broadcast work in tandem, and examine behaviors specific to Internet radio. The results reveal that the Internet radio audience is an incredibly attractive and obtainable audience for brands. Highlights from our research include:
Internet radio users are young and affluent Internet radio listeners are less likely to try and avoid an advertisement Internet radio listeners are twice as likely to purchase something they heard in an ad Moving beyond the car and the home, new marketplaces are emerging for audio advertising
that were rarely penetrated by traditional radio
The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care June 2013
High Internet Radio Listeners trend slightly to be a more male and less Caucasian audience than the High Broadcast Radio Listener segment, though these segments have similar average incomes. Where they differ the most, unsurprisingly, is age. The average age of the High Internet segment is 34, where as the average age of the High Broadcast Listener segment is 47. This paints the income result in a different light. The High Internet segment achieves the same average income 13 years earlier than the High Broadcast segment. Those who listen to Internet radio listen to it everywhere. When asked about locations in which they listen to radio, High Internet Radio Listeners said that they primarily listen at home (91%), but more than 40% of respondents say they listen to Internet radio at every location listed in the study (home, work, car, gym and/or while running errands). Our research reveals when it comes to smartphones and smart TVs, desktops and laptops, tablets and other connected electronics, all devices are used to access Internet radio. According to Pandora, its listeners overlap across almost all of these categories, with the largest portion of listening hours accessed through non-tablet, mobile devices (easily translated to likely mean smartphones). The key is that with Pandora or other Internet radio services, accounts and user information are portable across devices and across locations. No longer are marketers bound by geographic territories for targeting and reach. A brand can target the same consumer through the same channel, regardless of where in the countryor in the worldthat person is.
High Internet Radio Listeners are twice as likely to have purchased a product they heard advertised on the radio in the past 30 days compared to High Broadcast Radio Listeners.
The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care June 2013
Our research also shows that Internet ads. High Internet Radio Listeners are twice as likely to have purchased a product they heard advertised on the 55% 41%
In the past 30 days, have you purchased something you heard advertised on Broadcast or Internet radio?
Work
Gym
in the past25% 30 days compared to Broadcast radio29% High Broadcast Radio Listeners.
Yes
29%
14%
M Next 2013
Adding it all together, an ad on Internet radio is likely to be heard by a young, affluent consumer with little desire to avoid the ad, who has a high likelihood to purchase the product in the ad. This combination is a perfect scenario for audio
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for the Internet radio generation. The workplace and the gym are new earbud markets
where advertisers can target consumers with audio ads at a higher rate than ever before. There was a time, not long ago, when listening to the radio meant having to make sure those around you didnt mind your choice in station or genre, especially in the crowded workplace. Radio at the gym meant having to buy a portable radio, remembering to bring it with you and making sure it had fresh batteries. Today, every smartphone and tablet device has a headphone jack, making for a portable, rechargeable radio that is always with you. Smartphones are freeing consumers to listen to Internet radio in more locations, with greater privacy and less distraction. The chart at right shows listening behavior differences between the two segments while at work and at the gym. A High Internet Radio Listener is almost twice as likely to listen to Internet radio at work or the gym than a High
Source: The Internet Radio Marketplace, GroupM Next 2013
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These earbud markets are an exciting development for brands that have historically avoided audio advertisements. Health and fitness brands can get their message in front of people who are at the gym, working out as they listen. Increased listening in the workplace opens up the possibility of audio ads for B2B brands. The workplace is a great opportunity for B2C brands as well because customers are likely listening to Internet radio while using their computer or a mobile or tablet device, and the right ad can lead to an immediate search for a brand.
The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care June 2013
same description, with the addition of an in-dash Internet radio. Those who saw the indash Internet radio are 14% more likely to be interested in
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Millions
8.2
2012 2016
that degree of lift for a change in the on-board interface, it is not surprising how quickly automakers are adopting Internet radio.
Note: OEM systems installed by car manufacturer Source: ABI Research, Connected Car Market Data, Global as cited in press release, May 1, 2012 www.eMarketer.com
Smart TVs and connected devices have increased in popularity and adoption throughout the world, with the greatest penetration in Asian markets. However, North America is starting to climb aboard the bandwagon in greater numbers (it is estimated that over 100 million households in North America will have smart or connected TVs by 2016). One of the main features of these devices is pre-installed Internet radio software. At this years CES in Las Vegas, both Samsung and LG showcased connected devices, including refrigerators that can have Internet radio apps as part of their operating systems. There is also the possibility of these same functionalities being part of the soon-to-come connected dishwashers, washer/dryers and microwaves. Device targeting is already a reality for Internet radio, so it is not hard to imagine a future where advertisers will have campaigns for phones, tablets, computers, cars and appliances, and have the ability to use data from one device to help target consumers on the others.
The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care June 2013
While digital audio and Internet radio are not the only audio formats available online, the vast majority of digital audio growth has been contained inand the greatest opportunities for brands lie inthe Internet radio streaming services such as Pandora and iHeartRadio. A continuously growing user base, a swell of compatible devices and a consumer that is both receptive and responsive to advertising makes Internet radio a compelling marketplace to reach consumers.
Source: The Internet Radio Marketplace, GroupM Next 2013
The Internet Radio Marketplace: Who Listens, Where They Listen and Why You Should Care June 2013
GroupM Next is the forward-looking, innovation unit of GroupM, the worlds largest global media investment management group that is the parent company to WPP media service agencies Maxus, MEC, MediaCom and Mindshare, as well as Catalyst and Xaxis. Together with GroupM agencies, GroupM Next focuses on the curation and application of insight-focused solutions across online, social, mobile and addressable channels. Through thought leadership, technology, research and education, GroupM Next delivers data-driven, actionable insights and a clear path to action to help GroupM agencies and their clients harness the right opportunities made possible in the digital technology and new media industry environments with speed and relevance. Access our work and discover our perspective at www.groupmnext.com. Contact us with questions or comments: cindy.spellman@groupm.com
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