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Online Radio Ads = Local Ad Opportunity

by | Oct 31, 2018 | BIA, BIA ADVantage, Blog, Radio, SAM

Consumers adoption of technology challenges advertisers and marketers to always look ahead for what new technology of US consumers listen to online radiowill capture their attention. With 180 million people listening monthly, streaming audio is becoming more prevalent. According to Edison Research, 64% of the US population listens monthly to online radio due to the growth in usage of  Spotify, Apple Music, and Alexa just to name a few. Smart speaker ownership, as well as auto in-car infotainment, is contributing to the increase in digital listeners. Edison is also seeing younger consumers skip owning radios for listening and instead opting for mobile, satellite and smart devices.

Our local advertising forecast shows radio advertising as the fifth largest of all media in advertising dollars at $14.5 billion in local. Streaming radio accounts for a small portion of this at around 1% of the total local advertising. Similar to streaming television digital radio is taking share from traditional radio. This is an opportunity for local sellers, especially radio, to tap into this newer source of ad revenue.

According to our SAM™ survey, 14% of businesses say they use streaming audio ads and among those that use the ads most see incredible ROI of 10 times to over 20 times ROI. While this is still a small number, it’s important to know that this is higher than the percent of businesses report using traditional radio ads. Streaming audio ads can target consumers with relevant ads within playlists, radio ad breaks or podcasts, which can be highly targeted to both a listener’s interests and location. Online radio is ad supported so online listeners are fairly diverse depending on the content. One significant benefit is consumers can share audio across social media which extends the reach of ads.

While streaming radio ads usage in local is small, it provides an opportunity for local sellers to offer targeted ads on digital where there aren’t already a lot of sellers offering similar products like search, video or display. Companies like Pandora and Soundcloud are partnering to create a strong programmatic streaming network where advertisers can place ads locally through the marketplace.  Looking at where the growth will happen in local markets our local advertising forecast predicts it will increase especially in local advertising markets like New York, Chicago and Los Angeles where local ad revenue from online radio will show the largest growth through 2023. Other markets with high growth in online radio advertising include Dallas-Ft. Worth, Philadelphia, Houston, Atlanta, Washington DC, and San Francisco.

The SAM™ survey data as well as our local forecast data is available through BIA’s local advertising dashboard, BIA ADVantage and is offered in a searchable, downloadable format. Insights and analytical reports from the survey are also provided. Additional information about BIA’s SAM study can be found here.