Internet Radio and the Price Increase Required for Advertising

The current Pandora station streaming music to my ears encompasses a total of 9 different artists influencing the songs that I hear. The current FM radio station set in my car encompasses a total of 9 different songs that I hear, over and over and over. Rain News estimates an increase of 42.7% of internet radio listeners over a three year period from 30 billion in 2014 to 43 billion in 2017. It is no surprise that listeners are shifting towards a more personalized experience on internet radio as opposed to the traditional radio alternative.

With this shift from traditional to internet, advertisers must shift their advertising platforms as well. It’s no surprise that research (by Rain News and XAPPmedia) has shown that spending on internet radio advertisements is expected to increase. According to the research, 77% of US music industry professionals expect ad-loads on internet radio to increase over the next two years.

The increase of ad-time is expected to rise nearly 15% over the next two years from an average of 2 minutes 41 seconds to 3 minutes per hour. However, with 3 minutes standing at the maximum amount of time for advertisements for the best user experience, the amount of advertisements cannot grow exponentially. Because of this, the cost will rise.

This is your standard supply and demand situation. With the demand (amount of ad minutes) from internet radio providers being limited to 3 minutes of advertisements, all the pressure is on the supply (advertisers wanting to advertise) side. This gives all the power to the internet radio providers allowing them to adjust the price of spots more freely.

According to the Rain News and XAPPmedia research, eight out of ten (79%) music industry professionals believe that internet radio ad rates will increase over the next three years.

Internet radio does have its perks that might make the price jump worth it. Internet radio can target a more specific audience that you’re trying to reach, as well as give more specific details of ad performance.

Advertisers can expect and prepare for this shift from traditional radio to internet radio as well as the pretty penny that it will cost. 

Is Ad Blocking a Major Concern for Advertisers?

Ad blocking may be a foreign term for many internet users, but that may change in the near future. There are many different kinds of software that allow customers to keep advertisements from appearing during their internet experience. With this software, an internet user’s experience has no pop-up, video ads, banners, or display ads of any kind.

This might sound peachy keen from a user standpoint, however advertisers might not feel the same way. The University of Oxford did a study that shows 41% of PC users and 11% of mobile users in the United States use ad blocking software regularly.

PageFair/Adobe did another study that looked at a more international scale. In Europe the amount of users using ad blocking software varies from 8.9% in Slovakia all the way to 37.5% in Greece.

Surprisingly enough, advertisers aren’t too concerned with this new ad blocking software. The following graph from eMarketer shows data collected from a survey by Strata that found that only 9% of advertisers say they have a major concern.

While the usage of ad blocking may be on the rise, it is comforting to know that your everyday user is not the prime culprit in this activity. PageFair/Adobe concludes that gaming and technology are amongst the top activities for which ad blocking is used. This tells advertisers that it is the more tech savvy user taking advantage of ad blocking and not your everyday user. At the bottom of the list sits shopping and search engines where few users utilize ad block. This is good news for advertisers as those are normally the targeted audience for advertisements.

Although ad blocking is on the rise, advertisers see no threat to getting their message across… yet. 

Mobile Advertisements Rely on Timing, Biometrics, and Consumer Interests

It seems like every time I use my smartphone, I see at least one advertisement. There is no doubt in my mind that mobile ads are on the rise and will be for quite some time. According to the International Data Corporation, the amount of money spent on mobile advertisements has skyrocketed from $7.7 billion in 2013 to $14 billion in 2014.

However, Christopher Heine discusses an incredible new form of mobile advertising in his article, “Big Brands Like CoverGirl and Coke Are Finding the Perfect Moment to Deliver Mobile Ads”. What are these perfect moments you might ask? Sit tight and I’ll tell you.

MediaBrix is a relatively new startup that is testing the waters of a new and interactive form of media advertising. MediaBrix uses hundreds of factors like biometric data and consumer interest to determine the precise time when their advertisement should be delivered.

Instead of your typical display ad popping up during a song, while scrolling through Facebook, or while reading an article, MediaBrix presents their ads at a prime time. They have the technology to showcase their advertisement when a viewer would be most likely to interact with said ad.

MediaBrix’ focus is on mobile and desktop gamers and app users. CoverGirl, a client of MediaBrix, interacts with app users and sends them a “congratulations” video advertisement when they complete a fitness goal.

Heine says, “Theoretically, such brands can target a Chicago Cubs fan with a celebratory offer minutes after the team wins a game (“since the Cubbies won, here’s 50 cents off your next soda”), or scrap the ad if the team loses”.

Well, I’m not sure about you, but I would be quite impressed with advertisements displayed on my smartphone/tablet/desktop at the perfect time rather than randomly. And luckily for me, that’s where the advertising world is headed.

Not only will this innovative advertising experience impress viewers, it will increase interest, click through rates, and interactions with consumers and the advertiser which poses as a win-win situation for all to enjoy!

Second-Screen Transforms TV Experience

Think about the last time you watched television. According to a Nielsen study, there’s a good chance you weren’t just watching one screen. Nielsen has discovered that, “eighty-four percent of smartphone and tablet owners say they use their devices as second-screens while watching TV at the same time.”

This is a huge statistic for advertisers. This second-screen trend opens up a whole new world of advertising possibilities. It will come as no shock if commercials start to direct viewers directly to their tablet to purchase or research their product.

Below, is a graph that Nielsen created that shows what people are using their second-screen for. The only category in which the usage of smartphones is greater than the usage of tablets is when it comes to email/texting friends about what they’re seeing on television. This should be looked at very closely by advertisers to realize that tablet users are more likely to dig deeper into a product or service they see on television than smartphone users.

http://www.nielsen.com/us/en/insights/news/2014/whats-empowering-the-new-digital-consumer.html

Nielsen’s report also found a rise in “social TV” where roughly one million Americans turn to Twitter to discuss television every day. This plays a huge role in how advertisers get their message out to today’s audiences.

With this knowledge, companies can create their commercials specifically for those utilizing a tablet as a second-screen. These commercials can direct viewers directly to their product or service and receive immediate action by consumers. Advertisers must keep up with the growing digital world and prepare for all of the second-screen viewers. 

The Bright Future of Digital Billboards

“You can do it! 4 days until the weekend!” were the encouraging words I read on my drive home Tuesday evening. These words flashed before my eyes on a fancy new digital billboard. Chances are, you’ve began to see more and more of this new advertising technology as you commute to work too. But what’s the scoop? Are digital billboards effective for advertisers?

Nielsen constructed a new study to answer those exact questions. The Outdoor Advertising Association of America released some of the research results. Digital billboards are making a huge impact with 75% and 60% of respondents claiming they saw a digital billboard in the past month and week, respectively. Not only do people recall seeing these billboards but 74-89 percent of travelers recall at least one specific ad on said billboard.

Other key highlights from the Nielsen study include:

·        71% said, “ads on digital billboards stand out more than ads online”

·        70% agreed digital billboards provide current and important information

·        65% think the medium is a “good way to learn about new businesses in the area”

·        55% of travelers who noticed a digital billboard in the past month were highly engaged, recalling the message on the screen every time or most of the time they passed by a digital billboard

·        46% said, “ads on digital billboards stand out more than ads on TV”

·        22% reported changing their plans in order to visit the digital billboard advertiser

Like any form of advertisement, there are pros and cons of digital billboards. A single digital board is the home to many advertisements that are played on a loop making it impossible for each commuter to see each advertisement in a single trip. However, as the statistics show, viewers are more interested and attentive to brightly displayed digital billboards. So, despite the smaller reach, the rate of return stands strong.

Traditional billboards are usually more permanent choice due to long lead times and the time it takes to create and install the advertisement whereas, while digital advertisements are much more flexible in their abilities, making my weekend countdown accurate day after day.

The beauty of digital is the ability to give commuters an ever changing and engaging message. Not only have these digital billboards proven to be successful, but 72% of the surveyed population thinks that digital billboards are, “a cool way to advertise” and who doesn’t love to be “cool”?