BY KURT HANSON
Imagine if you will a radio market that's roughly the 15th largest in the U.S. — i.e., about the size of San Diego — but significantly more appealing, as virtually 100% of the market's population consists of upscale, adult consumers (most of whom, additionally, have a tendency toward early adoption of new products).

Also imagine that, improbable as it sounds, virtually all of these consumers are listening to the radio on brand-new, next-generation radio receivers that can display full-color, animated visuals synchronized to the radio programming.

Now imagine that instead of the many hundreds of radio advertisers that are buying spot schedules right now in markets the size of San Diego, this attractive new radio market has virtually NO advertising campaigns running.

Improbable? Absurd? Perhaps... but that's the state of Internet radio today!


Millions of listeners — but no advertisers!
As I'll describe tomorrow in RAIN, the aggregate midday AQH audience for Internet radio is probably more than 500,000 people — and that's at any given moment, drawn from a cume that several times larger than that. That's a bigger midday audience than every San Diego station combined. It is, legitimately (on weekdays from 9AM ET to 5PM PT, anyway), the 15th-largest radio market in the U.S.

The downside of Internet radio's audience from an advertiser's perspective, of course, compared to broadcast radio's audience, is that broadcast radio sells the majority of its ad campaigns to local advertisers, and the Internet radio audience is dispersed across the US

On the other hand, of radio's $20 billion in advertising revenues, $4 billion of that is spent by network and national spot radio advertisers. For those advertisers, Internet radio's audience should be extremely desirable, as it's smoothly and homogeneously spread across the entire country.

And Internet radio's audience should be an obvious buy for any national advertiser that (A) wants to drive people to its website (e.g., Hotwire.com), or (B) wants to reach people at work (e.g., McDonald's to promote its new line of salads or an advertiser like Office Depot).

Yet... it's not. There have been a few successful "video gateway" campaigns (short TV spots that play at the start of a new stream), but there are hardly any radio spot schedules on the medium today.


Why advertise on Internet radio?
This seems like it would seem to be a fantastic opportunity here for broadcasters to sell an exciting new subset of their audience — office workers who are listening to their simulcast streams — and perhaps even to bring some new advertisers to the radio medium.

After all, the benefits of reaching this new audience should be clearly enticing:

• Quality audience: The vast majority of Internet radio listening is comprised of consumers who are listening at work on a broadband-enabled computer, meaning that they are inherently a high-qualitative-profile group of listeners.
  
  
• Low spot load = High attention level: Whereas on broadcast radio today a spot might end up buried as the 10th spot in a 12-spot break, on Internet radio, a spot might be the only spot in the break, meaning that it's far more likely to be heard and acted upon.
  
  
• Accompanying visuals: Most Internet radio stations are capable of displaying an advertiser's logo while their spot is playing (typically in a 468-by-60-pixel banner ad)!
  
  
• Website link: Since virtually all Internet radio listeners today are sitting in front of a computer with a browser window open, and since an advertiser has 30 seconds of persuasive audio to communicate with, Internet radio listeners are perhaps the easiest consumers in the world to entice to visit a website!
  

So what's the problem? I have my own opinions, which I'll describe in RAIN over the next couple of days, plus a proposed solution, which I'll get to before the week's over.

Meanwhile, I'd welcome your feedback on the subject: Why do you think we're seeing so few spot schedules on Internet radio today? Please feel free to drop me a line at kurt@kurthanson.com (or simply use the form below).

At any rate, here's my conclusion for today: THIS SITUATION IS RIDICULOUS!

So let's solve it. More on that topic tomorrow in RAIN.

TO BE CONTINUED...