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Bret Kinsella: Internet Radio Is Bigger Than Facebook

bret kinsella contributor logo canvasThis guest column by XAPPmedia CMO Bret Kinsella was originally published on the XAPPmedia blog.


When many people think about marketing to mobile consumers, Facebook comes to mind. However, eMarketer data show that Internet radio is even more fertile ground. The analyst estimates that 12% of time spent with digital media will go to Internet radio this year while only 6% will be with Facebook. This indicates higher intensity of usage on Internet radio and more time available for advertisers to connect with consumers.

Time Spent with Digital Media

This is only half the story. There are also more users of Internet radio than Facebook in the United States. Statista estimates that Facebook had 156.5 million U.S. users as of January 2015 while eMarketer puts the domestic Internet radio listener audience at 159.6 million at the close of 2014. That reflects 2% greater audience reach for the audio platforms.

U.S. Monthly Users for Facebook and Internet Radio - 2014

Internet Radio and Facebook are Mobile Audience Aggregators

A key similarity between Internet radio and Facebook is the concentration of mobile users. Facebook reports about 86% of its monthly users access the service on mobile devices. Analysts from Triton and comScore estimate mobile Internet radio usage ranges between 75% and 95%, respectively.

Both Facebook and Internet radio started out as desktop platforms with loyal users, but growth and usage accelerated as consumers shifted to mobile. As a result, social media and Internet radio have become synonymous with mobile media.

Is Internet Radio Part of Your Mobile Advertising Strategy?

The question for advertises is how Internet radio fits into their mobile advertising strategies. It would be unusual for national advertisers to ignore Facebook in their planning. Internet radio hasn’t reached that level of mindshare, but its standing is changing quickly.

Data from the Q2 Internet Radio Ad Load Report revealed another sharp climb in the number of advertisers identified across five leading Internet radio publishers. The total advertisers in the sample rose 26% to 149 from 118 in the first quarter. This included a near doubling of local advertisers.

One of XAPPmedia’s Internet radio predictions for 2015 published in MediaPost is that the number of advertisers on Internet radio will grow five-fold in 2015. As of Q2 the number in our tracking sample has already more than doubled since Q4 2014. More advertisers are recognizing that mobile audiences are readily available on Internet radio and music streaming services.

The Evolution of an Advertising Channel

Facebook is a global behemoth when it comes to audience. The surprise for many marketers is that Internet radio is in the same category in the United States and catching up worldwide. A key difference is that Internet radio actually commands more monthly consumer time than Facebook. And, it has another hidden benefit – Internet radio doesn’t require attention to the screen. Advertisers can reach consumers even when they are walking, exercising, driving or working. These are areas where Facebook isn’t present.

It took Facebook a few years to figure out an advertising model that matched the content consumption experience to the content interaction experience and drove measurable consumer engagement for brands. Internet radio is still working through this process. Advertising revenue is the key area where Internet radio trails the social media platform. In fact, Facebook’s second quarter revenue in the U.S. nearly matches a recent BIA/Kelsey forecast for the entire Internet radio industry’s ad revenue in 2015. The question for audio publishers is what will they bring to market to improve monetization. Analysis published in May suggests that Internet radio could generate $4.7 billion more advertising revenue this year if they approached Facebook’s monetization prowess.

Audio has different considerations than visually-driven digital media so simply copying Facebook’s strategies is not a viable approach. For example, how do you engage consumers when they are listening, but are not in a position to see or touch the device? Interactive audio ads and other innovations will help Internet radio through this transition, but one thing the industry doesn’t have to worry about is a perception of small. When you are bigger than Facebook, you have a seat at the table.

 

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Bret Kinsella

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