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Internet Radio Revs Up

Dollars shifting to digital

September 9, 2009 | Media & Entertainment

The message coming from the radio industry is clear: Terrestrial radio is in trouble financially and things will get worse before they get any better. Many of the country’s largest national broadcasters are on the verge of bankruptcy, and the Radio Advertising Bureau (RAB) announced that Q1 2009 was the industry’s worst quarter ever in terms of ad spending.

Internet Radio Makes Waves,” a new eMarketer report, predicts the radio industry will see double-digit losses in ad spending this year alone, with terrestrial radio bringing in $14.5 billion in ad revenues in 2009, a drop of 18% from 2008 levels.

US Terrestrial Radio Advertising Spending, 2008-2010 (billions and % change)

Internet radio stations, on the other hand, are positioning themselves to take advantage of the shift in dollars. Even in this tough economy, Internet radio is growing ad revenues year over year and is one of the fastest-growing online media categories. Attractive demographics and a connected audience will prove increasingly appealing to advertisers as they look for fresh channels to reach consumers.

ZenithOptimedia reports that in 2009, advertisers will spend $260 million on Internet radio and another $28 million on podcasting for a combined total of $288 million, up 28% from 2008. By 2011, that combined figure will reach nearly $394 million.

US Online Advertising Spending, by Format, 2006-2011 (millions)

Though Internet radio listeners are still relatively few, millions of Americans already listen to radio online from a desktop computer, laptop or mobile phone. Arbitron and Edison Research reported in April that 42 million Americans ages 12 and over tuned in to online radio in a given week, up from 33 million in 2008. That boosted current listener rates to 17% after being mired in the range of 11% to 13% in recent years.

US Internet Radio Listeners, 2000-2009 (% of respondents)

For marketers, the rise of Internet radio means more-targeted advertising and a more educated audience with higher income and a greater chance of being employed. Mobile will bring still more opportunities by offering streaming radio on the go via phones and other connected portable devices.

Even the difficulties of terrestrial radio can be a plus, if advertisers use the faltering market as a bargaining chip when negotiating rates.

For answers to these key questions, purchase the “Internet Radio Makes Waves” report today:

  • What effect has the economy had on terrestrial radio?
  • Who listens to radio online?
  • What attracts listeners to online radio?
  • How will satellite and HD Radio survive troubles in the auto industry?
  • How will mobile applications affect radio?

Total Access subscribers, log in and read the report now.

Check out today’s other article, “Display Campaigns Boost Search Effectiveness.”



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