Q&A: Exploring the Marketing Power of Mobile Internet Radio

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Pat Higbie, CEO, XAPPmedia answers our questions about the surprising reach of Internet Radio

Q: Marketers might not be aware that there more users of Internet radio than Facebook in the U.S. Why do you think has a greater reach?

A: Audio is a universal entertainment media. From birth we are introduced to voice and music and many of us enjoy having it as part of our day. Audio also pre-dates social media so it may get a boost simply because of learned behaviors. Finally, audio is a passive consumption media that you can enjoy regardless of what you are doing. Social media requires active visual attention so it is not always a convenient entertainment choice. Plus, not everyone wants his or her life shared online. According to the Radio Advertising Bureau, broadcast radio reaches over 90 percent of U.S. adults. Internet radio will move toward that figure over the next 10 years.

Q: How does audio advertising engage consumers more effectively than social media such as Facebook?

A: Audio advertising can reach consumers when they are ultramobile or multi-tasking. For example, when a consumer is driving, walking, exercising, using other apps or working they can still listen to audio content. Facebook is a singular task that requires visual attention where the user naturally engages by touch. Interactive audio ads are groundbreaking in part because they provide a simple and convenient way for consumers to engage with audio content by voice when they are multi-tasking or ultramobile.

Q: How is audio different than other mobile media?

A: Seventy nine percent of mobile audio content is consumed while the audio app is not visible on the screen. Other mobile apps and features require visual attention. The screen is the critical point of interaction. By contrast, audio is the quintessential mobile media because it can be consumed even if a listener’s hands and eyes are otherwise occupied. People attempt to consume visual media when walking and even while driving, but it is inconvenient and unsafe when users don’t watch where they’re going.

This has further implications. Most Internet radio apps are based on the touch interaction model used by visual apps with calls to action that say ‘tap the screen.’ However, these ads are often ineffective because the app is not visible 79 percent of the time and ultramobile users cannot divert their eyes even when the app is visible. Mobile audio requires a voice interaction model to enable consumers to engage in a way that is simple, spontaneous and convenient all the time.

Q: Why should Internet radio be part of advertisers’ mobile advertising strategy?

A: Advertisers would be well served on Internet radio because that is where mobile consumers are spending time. Internet radio represents 12 percent of all time spent on digital media, which is double Facebook at 6 percent. comScore suggests that 95 percent of these users are on mobile. Additionally, you can reach consumers at times when other media are ineffective because they require visual attention. If you want to reach mobile consumers regardless of what they are doing, Internet radio is the best option to do it.

Q: What is the growth potential for Internet radio advertising?

A: We expect it to triple over the next five years. According to eMarketer, the average U.S. adult spends about 88 minutes per day with broadcast radio and 39 minutes with Internet radio. That means about 69 percent of audio time is with broadcast radio and 31 percent is over the Internet. However, approximately 90 percent of audio advertising dollars is allotted to broadcast radio and only 10 percent goes to Internet radio. Time spent with media alone would suggest a tripling of Internet radio advertising revenue to simply close the attention gap that exists today. BIA/Kelsey estimates U.S. Internet radio advertising in 2015 will be about $2 billion. Balancing for time spent by consumers suggests this should climb to $6 billion based on today’s numbers. Additionally, the ratio of time spent on Internet radio is growing rapidly so that number will likely increase in the coming years. Some of this increase will go to traditional broadcasters as they grow their online audience.

If you look at time spent on mobile you get a similar outcome. eMarketer suggests that about 19 percent of time spent on mobile was devoted to audio in 2014. However, audio media commanded only 7 percent of mobile ad revenue. If ad spending were aligned today with mobile consumption time, Internet radio would generate $5.35 billion in 2015. You can see that even without further growth in users and usage, Internet radio advertising revenue will grow 2.5 to 3 times larger than today and will continue to increase from there.

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