RAIN 4/24: Ad pros share their strategies to grow net radio CPMs at RAIN Summit

Paul Maloney
April 24, 2012 - 12:20pm

SNL Kagan senior analyst Robin Flynn moderated the day's second panel at our recent RAIN Summit West event in Las Vegas. Flynn reported on the discussion, called "Charting Digital Audio Ad Dollars," as well as other content from the Summit, in the SNL Kagan blog "Economics of Internet Media."

While online radio usage is growing across the board, operators are faced with the challenge of better monetizing that listening, especially on mobile devices (where the ad market is less mature).

"Currently, Internet radio CPMs are in the range of $3 to $6 for nontargeted ads and higher for geo-targeted ads," said panelist Alexis van de Wyer, who's president of AdsWizz. Pandora SVP/ad sales Steven Kritzman said ads that include a video element fetch $20 CPMs. (Kritzman also mentioned that Pandora enjoys an 80% renewal rate among ad clients.) Katz360 President Brian Benedik told the panel geo-targeted advertising can boost Internet radio CPMs to the $6 to $12 range and higher.

In fact, the prevailing sense was that Internet radio's growing power at reaching truly local audiences (see Pandora) is what will truly be the game-changer in monetizing listening.

"Local CPMs at $8 to $10 are tastier than the $3 to $5 network CPMs for online platforms," Pandora's Kritzman said. Jon Mitchell, Spotify's vice president for U.S. ad sales, also on the panel, said advertisers can purchase local campaigns for as little as $500 to $1,000.

Read Flynn's entire article here. There's more on our recent RAIN Summit here; and look for more coverage (including video) of the event soon. Jennifer Lane has additional coverage in Audio4Cast here.

Michael Schmitt
April 24, 2012 - 12:20pm

Rock the Cut on iHeartRadioInternet radio services can offer advertisers more than just audio commercials or banners ads. Several national advertisers have partnered with the likes of Pandora, Clear Channel and Spotify to create specialized branded radio stations and build other "experimental marketing" projects, as Inside Radio recently reported.

For example, Clear Channel has launched branded radio stations on iHeartRadio for State Farm, Verizon, NBC and Supercuts. The broadcaster actually launched four stations for Supercuts' "Rock the Cut" campaign. Meanwhile Pandora has created branded channels for Chevrolet, Cesar Canine Cusine and others. Spotify recently announced a marketing deal with Coca-Cola and is also working with McDonald's, Reebok and Intel.

Other advertisers have launched "microsites" alongside a custom radio stream, said TargetSpot CEO Eyal Goldwerger. Captain Morgan's custom station could be found at HouseParty.com.

"An audio spot is a great way to message and it generates reach and frequency with a large impact, but it is sometimes transient," said Goldwerger. "Using a custom station experience becomes an extension of their audio advertising so they can touch the consumer and build an online relationship."

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Michael Schmitt
April 24, 2012 - 12:20pm

MobileHispanics are one of the leading demographics in terms of mobile usage, smartphone penetration and web radio listening, according to a new round of studies.

Nielsen found that Hispanics "outpace all other ethnic groups in mobile downloads of music and photos" and are "heavy phone users in general." The demo is 25% more likely to follow a brand online, Nielsen says, and is more likely to consume mobile multimedia.

Meanwhile, eMarketer found that around 43% of Hispanics own a smartphone in 2012 (compared to the overall rate of 36.6%). The company predicts nearly 63% will own a smartphone by 2016.

As we reported last week, The Media Audit found that more than 25% of Hispanics had listened to Internet radio in the past 7 days (RAIN coverage here). That outpaces the overall adult 18+ rate of under 20%.

Interestingly, The Media Audit also found that web radio is popular amongst cellphone-only consumers. And Nielsen found that Hispanics are less likely to have a home broadband connection than the average U.S. consumer (62% compared to 76%).

"If you’re building a mobile app or service -- especially a social or entertainment-focused service," writes TechCrunch, "you would be lucky to have a group that’s as engaged as this one is to tap into."

You can find more on Nielsen's research here and more from eMarketer here.

Michael Schmitt
April 24, 2012 - 12:20pm

Mobile advertisingGlobal mobile advertising and content will generate $67 billion in 2012, according to a new forecast from Stategy Analytics.

In fact, the company predicts in-app ad sales in the U.S. and western Europe will overtake mobile web display sales. Mobile ad spending will grow 85.4% this year. Meanwhile, app downloads will grow 38% (reaching 23 billion) and app spending will grow over 30% ($26.1 billion).

PaidContent.org has more coverage here.