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Digital Radio Gains Ad Dollars as Usage Increases

Still only a fraction of spending on over-the-air broadcasts

US ad spending on radio, along with all other media, fell in 2009. Like for TV spending, though, 2010 brought a rebound. eMarketer estimates over-the-air radio spending was up 7.2% last year, and will rise a further 2.5% in 2011.

Spending online, while still very low, is rising rapidly. This year, eMarketer estimates, US advertisers will spend $800 million on internet radio, an increase of 27.4% over 2010. By 2015, eMarketer predicts spending will double to $1.6 billion.

eMarketer benchmarks its radio ad spending figures against data from the Radio Advertising Bureau, for which the last full year measured was 2010.

An April forecast of online and over-the-air radio revenues from BIA/Kelsey predicts similar growth in both areas compared to eMarketer estimates, though its figures for online spending are significantly lower. The firm expects online spending to double from $400 million in 2010 to $800 million in 2015.

The rapid rise of online radio spending, albeit from a small base, goes hand in hand with a rise in listeners. A 2011 survey from Arbitron and Edison Research found that 22% of US consumers ages 12 and older listened to online radio in the week before polling. That was up from 12% in 2006. Overall, 56% of respondents listened to at least some online radio, and 24% listened specifically to Pandora.

The growing pool of online radio listeners also reported spending more time with the medium. Arbitron and Edison found that this year, online radio listeners spend an average of nearly 10 hours per week tuning in via the web, up from just over 8 hours in 2010. In comparison, online video viewers spend about three and a half hours watching video weekly.

Keep your business ahead of the digital curve. Learn more about becoming an eMarketer Total Access client today.

Check out today’s other article, “Subscribers Eager to Open Daily Deal Emails.”

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