In continuing with my theme of online opportunities for local media companies, I thought I would explore market dynamics within the online radio sector for this post.   According to Borrell Associates, local online advertising is expected to grow at 8% this year while broadcast radio advertising dollars are forecasted to contract by 15.1%.  As with other sectors of the market, online is the bright spot that traditional media companies need to pursue to secure both their market relevance and future revenue streams.

When discussing the online radio format, most people think about the challenging dynamics associated with the music format:  radio has an unfair economic advantage as they don’t need to pay royalties, Last.fm and Pandora will struggle to support royalty requirements exclusively through advertising dollars, Rhapsody and Napster have strong subscriber-level economics but achieving scale and business model longevity are open questions.

However, when I think about radio broadcasting in the context of local media and the local advertising opportunity, I think about the “infotainment” category which includes news, weather, sports, politics, business media, and other talk radio categories.  Interesting insights can be drawn from a survey of engagement metric comparisons (all stats from Compete):

Comparison Set

Page Views Per Visit

Monthly Audience Size

WCBS880.com (CBS Radio NYC)

NYTimes.com

12

6

100K

16MM

WBZ.com (CBS Radio Boston)

WBZTV.com (CBS TV Boston)

10

3

85K

330K

WEEI.com (Entercom Boston Sports)

ESPN.com

25

1

130K

3MM

What is driving the strength of online radio’s engagement metrics?  I think there are three primary drivers:

Compelling content. Most news/talk radio stations produce extremely relevant content to our daily information needs – traffic, weather, sports scores, etc. – that drive our initial entry to the site and lead us to engage with additional content of interest.

Relevant packaging. Most news/talk radio content is packaged into snackable clips that require and minimal time and attention to consume the relevant information.

The third has to do with the radio format itself.  It is the ultimate in portability.  As opposed to a newspaper or television, I can multitask while consuming information – in my car, at home doing chores, at work streaming through my computer.  Compared to video, the streaming quality of online audio is more consistently reliable, especially at the workplace.

I would also argue that in-stream audio advertising has just as meaningful a market opportunity as in-stream video.  News/talk radio ads tend to be short and unobtrusive, as they blend in well with the underlying content.  They are cheap to produce and it is easy to repurpose the 10 – 15 second on-air ads for streaming.  They are relevant both geographically (hyper-local) and contextually (financial service ads associated with business news segments).  Audio ads also don’t require that you be watching the screen to fully comprehend the marketer’s message.  Lastly, the target market for in-stream audio advertising is the millions of small businesses across the country, as opposed to the handful of national advertisers.  Essentially, broadcast radio has a Google AdSense-type of opportunity – very short, relevant, unobtrusive ads that are affordable to millions of business owners.

The key to online success, however, is scaling audience reach.  The table above demonstrates that compelling content drives engagement, however, the audience stats are too narrow to drive a meaningful business.  Thoughts on where to invest are as follows:

Usability. Eliminate the clutter and focus on getting customers to relevant content quickly. I’m still amazed at the complexity and quantity of clicks required to get to target content. As with all content-driven sites, search and navigation tools are the most used applications. Sites like WEEI have invested in Universal Search capabilities (singe search results interface unifying all content types) and widgets that prominently display most popular and related content throughout the site. And of course, good usability and site design drives SEO success.

Aggregation. Success in the local market requires that publishers look beyond their own content for relevant stories and information in order to become a local online media hub. Boston.com (The Boston Globe website) has done this to great effect and is now a leading aggregator of content relevant to New England from a variety of local media outlets. Another spin on aggregation is CBS Radio’s recently launched play.it site which is a portal into all of the content that the 100+ stations produce. This allows the consumer of content in the local market to expand their media gathering nationally (finding all sports news, as opposed to just NY team scores).

Personalization. Local news and information is great content for personalization. This can be achieved through RSS feeds – allow the visitor to subscribe to a feed for a particular topic or search query – or through more sophisticated alerting platforms that allow the user to enable real-time alerts and alerts at specified times throughout the day (for example, weather at 7AM before I leave for work; traffic at 6PM before I start my evening commute, etc.).

Now, imagine if troubled Sirius XM published archive and promotional content to an ad supported site and used it is a means to convert users to paying subscribers…definitely achievable by combining their excellent content with multimedia site publishing best practices. 

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Video | Video Search

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About The Author: is the Chief Revenue Officer of EveryZing, Inc, and has been in the search industry for over a decade, including Vice President of AlltheWeb (now part of Yahoo!), General Manager of FAST (now part of Microsoft), and CEO of Search for Reed Business Information.

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