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Advertisers Flock to Internet Radio

One of the surprising findings of the Internet Radio Ad Load Report – Holiday 2014, was how many individual advertisers showed up in our study sample. Between November 2014 and January 2015, XAPP researchers identified 101 different advertisers on four leading Internet radio services.

Recent posts examined how data from both industry analysts and consumer research paint a clear trend of Internet radio’s ad supported present and future. However, the number of advertisers and their variety indicates that Internet radio is emerging as an important channel to reach consumers.

Who is Advertising on Internet Radio

One key industry we recognized in our analysis is consumer retailers. Some prominent examples include: Walmart, Target, Home Depot, Lowe’s, NAPA, Autozone, Walgreen’s, CVS, Macy’s, JC Penney and more. Retailers accounted for 20% of all advertisers identified in the study period. Other notable industry segments included Media/Entertainment/Gaming, Food & Beverage, Restaurants, Financial Services, Telecom and Automotive.

Internet Radio Advertisers By Industry

Retailers were even more prevalent in November, where they represented 27.6% of advertisers in the sample and 24.6% in December. It was noted that many of the November advertisements were explicitly Black Friday oriented. While you may expect a January fall-off, retailers remained 20.5% of the advertisers in the January sample. Advertisers were also more likely than companies in other industries to be identified in multiple months.

Local Advertisers Joining the Party

Local advertisers have long been a staple of broadcast radio advertising and they are starting to appear on Internet radio. Fourteen percent of the sample were identified as local advertisers, including half of the automotive advertisers. Since data from Borrell and BIA/Kelsey concludes local advertising represents about 70% of broadcast radio revenue, it would be logical to expect this figure to climb significantly.

Why are Advertisers on Internet Radio

The large number of advertisers isn’t all that surprising given Internet radio’s recent rise. Data from Edison Research’s Infinite Dial report due out today concludes that over 50% of U.S. adults now listen to some form of Internet radio monthly.

Monthly Online Radio Listening

This tracks precisely with eMarketer estimates of total population monthly listening of nearly 170 million of any age. Comparing this estimate with U.S. Census Bureau estimates of 319 million U.S. population and you also get 53%. This is today a story about increasing reach. Consumers can be found on Internet radio, so advertisers are migrating to these services to reach them.

There are many other reasons for advertisers to like Internet radio ranging from consumer targeting to alignment with popular culture to voice-activated engagement when using XAPP Ads. All of these factors combine to generate headlines like this one recently spotted in Digiday, “Why agencies are bullish on Spotify.” Given the strong trend toward ad-supported listening, we expect publishers to latch onto the industry momentum and become increasingly focused on adding even more advertisers to their rosters.

For advertisers looking to learn more about ad serving practices among Internet radio services and which competitors are on the platforms today the Internet Radio Ad Load Report – Holiday 2014 may prove a useful resource.

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