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RAIN 2/2: Radio's battle with webcasters for local advertisers may have begun

Posted on: 02/02/2010


As Internet radio finally and truly becomes a mobile medium (a process not initiated, but certainly expedited, by the iPhone), it’s as if the Barbarians have breached radio’s outer defenses. The ability to listen to AM/FM on the go (especially in the car) was of great advantage over the younger medium and served as a line of defense against the competition of “Internet Huns.” This competitive edge served to maintain webcasting’s status as that of a curiosity, simply “something you do on the office computer.” That competitive advantage, obviously, is slipping away.

Yesterday came news [RAIN’s coverage here] that the invaders may now be scaling the castle walls. Internet radio’s biggest pureplay, Pandora, announced its partnership with AdReady to target small- and medium-sized local businesses — that is, traditional radio’s local customers, its bread and butter. (It’s display ads only for now, but the technology for geo-targeted local audio ads is there, no doubt.)

Gerson Lehrman Group advisor Alan Albarran (left) fears that radio has lost of a generation of listeners, many of whom migrated to more “forward” media like personalizable online radio. And with them, radio’s lost selling opportunities. “The demographic… 20-24… no longer uses radio… But they use Pandora, and they use it a lot,” he writes. “Once these businesses realize the awareness of Pandora and where the younger market is, they should jump on this opportunity.” [Read more on the GLG site here.]

The partnership, at least according to Pandora’s PR, came from a position of strength and potential, not desperation. Pandora VP of performance ad sales Brian Mikalis said, “The move comes in response… to a swell of inquiries from local advertisers that were taxing Pandora’s national sales staff.”

And where Pandora leads, others will likely follow. Ken Dardis (right) in Audio Graphics points out that Pandora may be the first, but won’t be the last to enter the local game. “TargetSpot, Ando Media, and Live365 are the next three largest networks having conversations about placing radio advertising — as in ‘audio ads” — in designated markets and even more specific locations within a market… Pandora just has the biggest drum.” [Read Audio Graphics, also the source of the Pandora quote, here.]

So Barclay’s says here radio is due for $350 million of online ad revenues this year. The invading hordes may not pillage much of that at first, but we may look back on 2010 when the battle over ownership of the local radio ad market truly began.


Trade publication Inside Radio today dedicates the majority of its issue to coverage of Internet radio news. Included are stories on radio groups’ efforts to follow Pandora’s lead and require more demographic info from online listeners to better target ads; CBS Radio’s plan to relaunch music radio station sites based on its revamp of KROQ.com; CBS’s new efforts to increase cross promotion between its online service Last.fm and music station sites; and ESPN Radio’s new ‘super stream player’ which allows listeners to pause and rewind the stream. Inside Radio subscribers can read more here.


Slacker has officially launched its new apps for Palm’s webOS smartphones (Pre and Pixi on Sprint, Pre Plus and Pixi Plus on Verizon). Like their other mobile offerings, Slacker’s application is free, but to get premium features (lyrics, no ads, etc.) customers need to subscribe to Slacker Plus for a monthly fee. PreCentral has more coverage here (and notes that the new Slacker app even briefly appears in the Verizon’s new commercial advertising the Palm smartphones).


Southwest Airlines will begin installing in-flight Wi-Fi on its planes in the second quarter of this year. American Airlines, Delta Air Lines and United Airlines have all added Wi-Fi access during flights as well, though it is usually a paid service. Still, fliers have instant access to Internet radio, even at 30,000 feet. The New York Times has more here.

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  1. Maybe it’s an inevitable change. I’ve heard that Pandora radio allows listeners to tune in to local radio stations and radio stations outside the US. It won’t kill local radio stations, i think that Pandora has just given it’s listeners a variety (thousands actually) of options.

    Sam · Feb 11, 10:14 PM · #

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