TargetSpot, Slacker Focus on Mobile Audio Ads

For the first time, in-stream audio advertisers will be able to target listeners to Internet radio on mobile devices. Slacker, a pure-play Internet radio service, has partnered with TargetSpot, its online radio ad network, to monetize the 50 percent of its listeners that tune-in via applications on iPhone, Android and BlackBerrys.

The move opens up a second revenue stream for Slacker, which has about 13 million registered users, and expands the growing business of online audio advertising to mobile devices.

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 suit. “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 the Internet and online platforms. The new capability creates two advertising streams to reach listeners that aren’t tuning-in on the desktop.

“Smartphones are becoming highly personalized mobile lifestyle devices,” said Jim Cady, CEO for 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.