Web Radio Advertising

About 37 million people listen to internet radio, according to Arbitron and Edison Media Research (3-25-2005), spending an average of 2 hours and 22 minutes a day. Most listen to music, but there is a core of about 6.6 million people who listen to news/talk/information radio on the internet for content that is not local. This group; about 8 percent of the U.S. population, has a heavy tendency toward an online media lifestyle, and are "early adopters" of new products.
Web stations are inexpensive and provide a live format to present information mini info commercials. Add pod casting to the mix and terrestrial radio does not stand a chance. Anyone have feedback on this type of advertising?

1 - advertising on the Internet allows the ability to track clicks & conversions. Advertising on the radio, web or otherwise defeats this, so it's not a good form of advertising.

2 - the markets are still very small - most people listening are doing-so while at work - they want something in the background - music. I listen to i-radio, and routinely leave stations with advertising.

3 - land-base dradio will not disappear - it does, contrary to your post, "stand a chance" - it's better established and requires virtually nothing to be listened to - compare the cheapest radio to the cheapest computer...

4 - Podcasting - still VERY niche focused, mostly not professionally produced and still only catering to a small, though growing, market - not everyone has an MP3 player - and even fewer actually download the podcasts...if they can find on on a topic they like. Podcasts are also suffering from a "bandwagon" effect right now - they're so easy to make, everyone thinks they can make some quick money by casting and grabbing a sponsor - real businesses will not advertise here simply because it's unproven.

5 - I have actually done ad buys for our company on Internet radio programs - targeted specifically at our demographic/niche - there was no way to track them, except for traffic from the station's website - and on those numbers - it's not worth it.

Internet radio is a great idea, and it's nice the technology exists for it (heck, I'm listening oline right now), but it's not going to bump land-based radio off the air - they server two separate and distinct markets.

Your stats are interesting, but let's all remember the population base in North America is approaching 300 million people...so that group is still pretty small.

Incidentally, we still don't even know yet if Podcasting is here to stay, or is a fad - give that a couple of years to figure itself out yet...

I think it is a viable market combined with video podcasting. The numbers of downloads from itunes is impressive. Media on demand is what the audience wants. It's now up to the advertisers to develop and implement a marketing strategy that integrates into this new mode of delivery without annoying the audience.

...but the actual size of that market is small relative to the reach of traditional advertising mediums - TV gets more eyeballs, land-based radio, more ears.

The advertisers will not take the lead in this - they will expect a clear, proven path before they spend money (I know, I 'm the Marketing Manager here at work, and we don't spend money for fun on novel things).

In the end, it still comes back to tracking - if there's no direct link (something to click on), then tracking virtually doesn't exist. You can flash your brand all you want on a video iPod - users will either tune it out, or someone will come up with a hack to skip it (depending of course on how the ad is built). In the end, it's just not enough people for advertisers with big budgets to move towards en-masse.

This will, I think, always remain a niche form of exposure. It WILL work for some companies, but not for the vast majority.

I agree the advertisers won't move until a proven method is established, but they are taking notice of the iTunes method of delivery. Personally, my preferences lean toward an "ala carte" way of choosing my entertainment. I like some shows, but not always the whole channel. Bandwith and pricing are the deciding factors on if and when it will get implemented.

The next step for advertisers to figure out is how to effectively target ads based a person's entertainment choices.

Which falls back to the seller of the ad space to effectively determine the demographics of their listeners. The advertisers, as usual, have the money, so the seller must work it out - not the advertiser.

If the seller collectes relevant demographic data, the advertiser then can make a decision - it's always a leap, but so goes ad buying...

I would think that companies like Tivo, iTunes and others similar would make targeting specific demographics somewhat easier. The leap would be relatively small once the parties involved figure out how to get the subscribing audience to give up their personal preferences without feeling that their privacy has been invaded.