It’s rare in today’s sinking ad market that you hear that any medium will be up in 2009. So either Eric Ronning and Andy Lipset, co-presidents of sales for TargetSpot, are displaying a lot of bluster, or the Internet radio rep firm is on to something.
Internet radio has been around for more than a decade, but it’s been slow to reach critical mass, making it tough to monetize. But since TargetSpot merged with Ronning Lipset Radio last October, the marketplace has new momentum. The number of listeners to TargetSpot’s network of more than 1,000 Internet radio stations operated by pure-play providers and some of the largest radio station groups, has had double-digit growth. For the month of December alone, TargetSpot network hit 15.3 million unique listeners, double the size of the nearest competitor, Katz Online Network. Sales followed suit. This year, network upfront billings grew 72 percent compared to last year (TargetSpot declined to reveal actual revenue). No wonder Google, which last week said it would exit the radio business, is eyeing streaming audio.
One of the reasons for growth is the migration of Internet radio, such as TargetSpot affiliates AOL Radio and CBS Radio, to mobile devices, such as the iPhone. “It gives insight into what happens to online radio when it becomes free of the desk,” Ronning said.
Web radio “is one of radio’s bright spots. I see more clients embracing it,” said Lauren Russo, vp, managing director of local radio at Horizon Media, who is incorporating streaming audio with a traditional spot buy. “It helps the budget go a little further.”
Prior to the merger, RL Radio’s sales, while growing, were confined to pure network radio buys. TargetSpot’s online geo-targeted buying system allows advertisers to make national, spot, local, even hyper-local buys targeting listeners down to the zip code.
That’s caused radio buyers to give streaming audio a closer look. Priscilla Fladger, network radio supervisor at Mullen, buys for Web-based accounts including Orbitz, Match.com and Lending Tree, which are spending more in local streaming to help supplement network buys.
“Before, streaming accounted for between 2 to 3 percent of our network radio budgets; now it’s grown to between 5 and 7 percent,” Fladger said.
For local advertiser the New York Lottery, geo-targeting is critical to avoiding waste. “It gives us a chance to target people during the day so they can alter their commute to make purchases,” said Mikael Gundy, media strategist at OMD. “We’re shifting budgets from more traditional media to streaming.”