By: Janis Mara Internet Music Listeners Are Captive Audience
(Adweek IQ) "Friends,
Romans, Netheads, lend me your ears!" As consumers flock online to listen to
music delivered through a variety of sources -; ranging from playlists on
RealPlayer to digital music content providers like SonicNet -; streaming
audio ad insertion is likely to become a hot new venue for advertisers,
according to a report released today by Jupiter Media Metrix.
"By 2005, up to $1.4 billion of online advertising revenue could come from
streaming audio," said Marissa Gluck, analyst for New York-based Jupiter. Though
there are major barriers to adoption such as lack of consistent delivery and
measurement standards, "streaming audio is going to offer huge advertising
opportunities for a couple of years," according to Gluck.
For one thing, Gluck said, there's not much competition presently, though this
may change as streaming audio ads become more common. Unlike TV, offline radio
and visual banner ads on the Internet, streaming audio, which is usually
prerecorded but does not have to be completely downloaded to the desktop,
currently carries few ads.
Also, the number of music listeners, and hence advertising dollars, on the Net
is growing. By 2005, nearly 5% of traditional radio advertising will have moved
online, Gluck said. In addition, it's cheap to produce audio ads, so cost
provides little impediment.
"In most cases, when a company runs a streaming audio ad, they will run a banner
ad synchronized with the audio," Gluck said. When users hear a call to action
such as, "Click on the ad to win a free T-shirt," they can access the banner ad.
This means advertisers can have a "double whammy" effect on users, accessing
them via eyes and ears.
Though these elements bode well for streaming audio, the technology poses some
problems. First of all, Gluck said many advertisers are making the same mistakes
they did five years ago with banner ads -; creating their own expensive and
individualized infrastructure to design and serve ads, instead of outsourcing
the work to companies with expertise in the area of streaming audio ads, such as
Lightningcast and Hiwire.
Also, "there isn't a common language as to what advertisers are talking about
with streaming media, the serving infrastructure and how to report on
performance," Gluck said. Advertisers and publishers must agree on consistent
standards so everyone knows what to expect in terms of duration and placement of
ads. Also, according to Gluck, so far no one has come up with a good way to
measure audio ad performance the way banner ad clickthrough rates can be
measured.
If these problems can be successfully addressed, Gluck sees a bright future for
streaming audio -; and a prime opportunity for interactive agencies to win
new business because such companies have technological expertise and analytical
skills, and because traditional agencies "will probably ignore opportunities
available in online radio."
Copyright 2001, Editor & Publisher.
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