Pandora, Spotify, and Internet Radio Media Buying


In one of our blog posts earlier this year, we discussed a Nielsen Catalina study that indicated radio media buying offers the best ROI for marketers (retailers saw returns as high as $23 on a $1 ad). The research focused primarily on terrestrial marketing, but how do those results compare to digital Internet radio services like Pandora and Spotify?

Those who tune in to digital trends may have noticed more advertising options by the day with mobile apps like Snapchat and Instagram. Internet radio offers a bridge between the traditional and interactive worlds. In the past year alone, both Apple and headphones company Beats launched Internet music subscription services to compete with Pandora and Spotify, the two most popular at the time. In addition:

Internet radio buys are expected to reach more than one billion dollars by 2016. Here are some of the reasons driving this growth and how your business could benefit.

Measure Reach More Accurately

One of the advantages digital marketing has over traditional marketing like broadcast and print media buying is more accurate analytics. An Internet radio media buy is no exception: companies can use the channel to measure reach more effectively and to serve ads to a more targeted audience.

Services like Pandora require registration, which captures demographic data that ties music choices to the listener. The company has already found a way to connect listeners’ preferred musical genre, location, and artists to their political leanings, which has opened up a whole market for political media ad buying. Businesses that leverage data in a similar way can better target customers.

Internet Radio Buying Offers Varied, Interactive Inventory

Digital radio services tend to offer fewer advertising spots per hour as a selling point for consumers. As an example, Pandora plays 8-12 ads per hour, compared with 25 ads per hour in broadcast radio.

While the inventory for audio ads is less plentiful, Internet radio offers alternatives for advertising. These include:

  • Branded channels with overlays that function like a homepage takeover on a website.
  • Branded stations and playlists.
  • Video advertising.

These marketing media solutions provide interactive experiences that can engage listeners in ways that are outside of the (radio) box.

Buying Costs for Internet Radio May Be Lower

Pricing is a crucial difference in traditional and Internet radio media buys.

Traditional radio ads are sold by the number of spots and the time of day when they will be played, while Internet radio ads are sold like digital display ads. Many sell on a cost per impression (CPM) basis, so advertisers are only paying for the ads that actually get seen or heard. Spotify is one example of a business that operates on a CPM basis, though it requires a minimum ad spend.

Internet Radio Can Lead to Conversions

The TargetSpot study we mention above researched the impact that Internet radio advertising has on response. It found that listeners were five times more likely to respond to an ad by calling for information or liking/following on social media. Listeners were also more likely to:

  • Purchase a product or service online or in a store.
  • Click on an ad.
  • Visit the advertiser’s website.
  • Search for more information online.

Based on this data, companies that advertise with Internet radio buying can tap into an audience that is likely to take action.

Internet radio advertising can provide cost-effective and creative media buying options with clear tracking and reporting. Consider diversifying your approach by adding it to your marketing plan.

Capitol Media Solutions is tuned-in to traditional and digital media opportunities for brands. Contact us to customize a radio buying solution for your business.

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