For the first time, in-stream audio advertisers will be able to target folks listening to Internet radio on mobile devices.
Slacker, a pure-play Internet radio service, has partnered with online radio ad network TargetSpot to monetize its audience that tunes in via applications on iPhone, Android and BlackBerry devices.
The move opens up a second revenue stream for Slacker, which has about 13 million registered users -- about half of those using mobile devices -- and expands the growing business of online audio advertising.
By all accounts, mobile advertising is expected to grow, reaching more than $1.5 billion by 2013, per eMarketer and Gartner.
While Slacker is the first, TargetSpot's other distribution partners are likely to follow. "This is where online audio is heading," said Andy Lipset, co-president of sales for TargetSpot, which is talking to charter advertisers. "This takes in-stream audio advertising to a whole new level, close to the point of purchase."
Up until now, the two to four audio ad units per hour that ran in-stream on Slacker's service were simulcast both on Internet and mobile platforms. The new capability creates two advertising streams, one of which will reach listeners that aren't tuning in on the desktop.
"Smartphones are becoming highly personalized mobile lifestyle devices," said Jim Cady, CEO of Slacker. "Through our partnership with TargetSpot, we are able to offer consumers free music while building an attractive and sustainable advertising revenue stream through our mobile platform."
As part of the agreement, Slacker provides TargetSpot with GPS and other demographic data that allows advertisers to target down to the individual listener. CPMs will undoubtedly be high, but TargetSpot and Slacker are betting it will be worth the cost.
"The research is showing the mobile audience is very responsive," Lipset said.