October 15, 2008
Deal Creates Largest Ad Network for Internet Radio
By Claire Cain Miller
TargetSpot, an Internet radio advertising network, announced Wednesday that it has acquired Ronning Lipset Radio, an advertising representation firm, to create the largest online radio advertising network.
“There are really only two businesses out there offering this type of service, and now we’ve come together and established ourselves as the leader in the space, unquestionably,” said Doug Perlson, chief executive of TargetSpot. The acquisition price was not disclosed.
TargetSpot enables advertisers to log on to its Web site to buy audio and visual ad space on the 600 online radio sites in its network. It offers them granular ad targeting. Many of its advertisers have been small, local companies. Ronning Lipset has a large ad salesforce and relationships with big brands. It has been selling ads for Internet radio companies like Yahoo, Live365, AOL and CBS.
Internet radio advertising is a young industry. The first Internet radio stations started in the late 1990s, but few computers could stream music. It has grown increasingly popular, with 54 million listeners a day, according to Bridge Ratings, a radio research firm.
Still, it is beset by challenges. The Webcasters, music labels and artists have been arguing for almost two years over a March 2007 ruling by the federal Copyright Royalty Board that increased the amount of money that online stations have to pay for each song they stream. Webcasters say they will be forced out of business if the current rates do not change.
Internet radio advertising has been relatively slow to catch on. This year, advertisers will spend $500 million on Internet radio ads, according to eMarketer. That is compared to $25 billion on online ads as a whole. Of course, the likely recession is expected to hurt all types of advertising.
Some advertisers question whether display ads — the ads that appear on Web sites — are effective on Internet radio sites, since most listeners only look at the site when they log on and then minimize the browser window. Audio ads, like those on broadcast radio stations, have other challenges. Some radio stations who have tried using them have found that listeners revolt. Pandora, one of the most popular Internet radio stations, does not air any audio ads.
Still, Mr. Perlson sees huge potential for growth in the industry, which he acknowledged is in its early days. He started TargetSpot in March 2007, after deciding that radio advertising was the next undiscovered ad market. He founded it with money from CBS, and CBS Radio is part of the TargetSpot network. Other backers are Union Square Ventures, Bain Capital Ventures and Milestone Venture Partners.
The company offers ad targeting based on gender, age, location and favorite music genres that advertisers could not get from broadcast ads. For example, a restaurant called 123burgershotbeer bought ads that targeted anyone listening to Internet radio near midtown Manhattan, where the restaurant is located. On a weekly basis, customers tell the restaurant they heard their ad on Internet radio.
Many Internet radio stations have revived their listener base with mobile applications. TargetSpot hopes that merging with Ronning Lipset will help it take advantage of that form. Display ads don’t work as well as audio ads on mobile devices, he said, because the screens are small, the devices are usually in people’s pockets and they use them mostly for audio — as telephones or music players.
“I wouldn’t be surprised if the audio ad is the most effective ad on a mobile device,” Mr. Perlson said.
15 ottobre 2008
USA, fusione in vista per lo spot radiofonico via Internet
Negli Stati Uniti è stata annunciato il merger tra due agenzie specializzate nella vendita di spot audio da collocare sulle stazioni radio che trasmettono via Internet, TargetSpot (RP ne ha già parlato) e Ronning Lipset Radio. Secondo il New York Times, oggi il mezzo Internet radio resta pubblicitariamente minoritario, con 500 milioni di dollari investiti in spot contro un totale di 25 miliardi di inserzioni online. E in tempo di recessione non c'è da aspettarsi molto. Ma il potenziale resta elevato, considerando che sarebbero 54 milioni le persone che si sintonizzano sulla "radio" via computer. Le due società piazzano già gli spot ordinati dai clienti su network radiofonici online come Live365, AOL, CBS. Con la fusione sono diventate l'operatore numero uno del settore.