The Rise of Radio Streaming | Tier10lab
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The Rise of Radio Streaming | Tier10lab

Jennifer Lee | On 07, Sep 2016


True or false: radio is a dying medium.

False. Radio isn’t dying — it’s changing. From traditional AM/FM to online streaming stations.

The number of people listening to online radio is on the rise. According to one of Nielsen’s latest reports, 93% of US adults listen to the radio every week. But the majority of these listeners stem from online radio streaming services, such as Pandora, iHeartRadio, and Spotify. Edison Research and Triton Digital also report that 57% of US adults aged 12 and over listen to online radio every month. Online radio, then, is no longer niche.

Most radio streaming happens, unsurprisingly, in the car. Over the past years, cars have become a place where people can continue their digital lives and engage with content. Available features like Apple CarPlay and Android Auto enable music streaming apps like Pandora and Spotify to break into the radio industry — and now, they’re beginning to grow a large following. Pew Research Center reports that, among online radio listeners, almost 75% of them are listening to online radio in their cars. The amount of online listeners has grown significantly since 2013, and will continue to rise with each year.

As more and more listeners join the streaming bandwagon, how will advertisers be able to reach their audience? Well, they still can. And if anything, online radio will make targeted marketing easier than ever.

Pandora and Spotify have completely changed the music world with on-demand streaming by enabling marketers to determine which songs are popular with their target market, down to a targeted individual. Data would also provide how many times a song is played, when its played, day after day, week after week. This provides an authentic look into the songs listeners are choosing. With such specificity, marketers could use this data to tailor their ads to air during a specific time of day, after a specific song is played, and even customize their ad frequency by individual. The possibilities are endless.

Armed with music preference and engagement data, media buyers have more control in optimizing radio ads in real time, whether a target consumer is stuck in traffic or on a road trip. And at Tier10, we’ve done just that.

Tier10’s in-house media team has already adapted their media buys to accommodate the ever-changing radio landscape. Tier10’s Media Director Olivia Devereux buys a combination of traditional radio and Pandora for our clients.

“We don’t currently buy Spotify because around 40% of its users pay to get rid of ads,” said Devereux. “That leaves less inventory to purchase and makes specific audience targeting more difficult to buy at scale.” Pandora is also hyper-targeted, to the point where Tier10 can target consumers by county, zip code, gender, and age range. “With digital we get a lot more targeting opportunities than we could with traditional [radio] buys,” she said.

Pandora is Tier10’s main streaming service of choice. “We don’t use Spotify because it’s a pay-to-subscribe service,” said Devereux. “When people pay to get rid of ads, there are fewer chances for us to reach our target audience.” When asked about iHeartRadio, Pandora’s growing competitor, Devereux explained that while it’s a service that’s on the rise, it still doesn’t compete with the number of daily listeners that Pandora has.

Streaming is giving traditional competition; not just on radio, but on all fronts. As we’ve seen in the latest 2016 Rio Olympics, AdWeek reported that TV viewership of the Games was down the first week by 18% compared to the 2012 London Olympics.

Compared to the drop in TV viewership, streaming spiked. By the first Thursday of the Olympics, live stream viewership hit 1.28 billion minutes, which was more than the combined total of the London and Sochi Olympics, at 1.24 billion minutes.

Streaming is becoming a formidable foe to traditional mediums, and it’s about time advertisers start investing ad dollars in streaming services, particularly within TV and radio.

Stay tuned for more!

Sources: AdweekNielsenNieman LabNews Generation