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Stream It Like You Mean It

Last month, Esurance took the wraps off one of the more unusual promos to come along in the interactive-media age. Recruiting its cartoon spokesperson Erin Esurance (the spandex-clad insurance spy with the pink hair), the Web-based auto insurer invited would-be directors to create a music video riffing off one of 10 dance numbers selected from recent Bollywood films. Launched in partnership with cable TV network IFC—aiming to promote its "Wake Up to Bollywood" film series—the "Esurance Bollywood Casting Call" promised a suitably themed grand prize. The winning homemade video will be turned into a cartoon episode starring Erin herself, and then aired on IFC.

As a piece of Web-based participatory marketing, the Casting Call had a lot going for it—uniqueness, brand exposure and, of course, a good chance of soliciting clever material.
But Esurance had a problem: How to reach hard-core Bollywood fans. After all, the popularity of Slumdog Millionaire notwithstanding, not everyone in the U.S. knows the words to "Bas Ek King" from Singh Is Kinng or the dance moves to "Tandoori Nights" from the film Karzzzz. The company needed a way to reach a highly specific audience while also keeping the appeal broad and national in scope.

The answer was Internet radio. Esurance developed a 30-second spot featuring Erin's voice: "Showcase your acting chops and moves" she pitched. Then, while running a light schedule on broad-appeal channels, Esurance ran the spot heavily on Web streams of East Indian music, which boasted the kind of listeners who can hum a few bars of "Marjaani Marjaani."
According to the company’s media director, Darren Howard, the choice of streaming radio was simple. "We can go to our streaming vendors and find those specific channels that play that type of music and would draw interest in our contest," he says. "It's not something you can do on terrestrial radio."

Esurance has made streaming a key component of its media mix since November 2006. While TV still gets the bulk of its ad dollars, the company is funneling half its radio budget online this year. And it’s hardly the only advertiser sinking its marketing dollars into Internet radio. Web-based companies like LendingTree, Match.com and Orbitz have made the medium part of their marketing mix for several years now. But streaming’s popularity with a demographically desirable and ever-widening audience (according to Arbitron/Edison Research, online radio reaches one in five consumers each week in the 25-54 age group) has turned the heads of older and more traditional brands. Walmart, Ace Hardware and Procter & Gamble are among the companies buying streaming time today. According to Priscilla Fladgler, radio supervisor for media agency Mullen, "There's a lot more interest from our non-Web-based accounts."

Much like the slumdog millionare Jamal, Internet radio has emerged as a young and unlikely success story. But it is not without its challenges. While the medium has proven itself a worthy buy for national campaigns, for example, Webcasters have yet to make significant inroads into the lucrative local marketplace. Agencies also complain that, in a frenzy to deliver sufficient impressions, some Webcasters end up annoying listeners by airing the same spot too frequently, while others mislead clients by padding their advertising proposals with international listeners that are not relevant to the buy. Perhaps most significantly, while Web-radio audiences can be quantified with far more precision than can those of terrestrial radio, advertisers universally complain about a dearth of reliable, comprehensive demographic data.

The Rushing Stream

One thing that Web radio does have going for it is momentum. As recently as 2005, only 8 percent of Americans aged 12+ listened to streaming broadcasts each week; today that number is 17 percent—the equivalent of 42 million people [see charts, p. AM3]. Of course, that amount is a mere fraction of the 235 million listeners of terrestrial radio, but the share is growing steadily. According to broadcaster estimates, streaming now accounts for 10-15 percent of total listening for some stations.

Those broadcasters have two trends to thank for that: People who increasingly listen to Web radio on their office computers and the popularity of handheld digital devices. It's probably no coincidence that a growing audience for streaming has paralleled the increasing popularity of devices like the iPhone. For instance, mobile online radio applications for CBS Radio's platforms (including AOL, Yahoo and Last.fm) have been downloaded more than 6 million times; Clear Channel's iheartradio app has surpassed 1 million downloads, according to the companies.

As consumers warm to Web radio, ad dollars are following them. In May, Borrell Associates reported that ad revenues from streaming radio had risen 25 percent over last year. Ad agency TargetSpot—one of two titans in the Webcasting space, which claims to deliver 15.3 million unique listeners per month—says it continues to enjoy double-digit growth.

Still, the sunny horizon of opportunity that Web radio purportedly represents for advertisers turns a little foggy where the numbers are involved. Streaming is still too new to have an industry association to track ad-revenue figures. As a result, estimates of the market's scope vary widely. Eric Ronning, co-president of sales for TargetSpot, pegs the market at $250-300 million, with a roughly 50/50 split between Internet pure plays and terrestrial broadcasters.
According to the Radio Advertising Bureau, total digital revenue for terrestrial radio shot up 13 percent in this year's first quarter to $101 million (the only sector in the battered industry that didn’t register a double-digit decline), but the organization doesn't break out the percentage attributable to streaming. According to Mark Fratrik, vp at financial data provider
BIA Analysis, "The lion's share [of that money] is display ads, rich video ads, and the whole litany of Internet-based advertising on radio station Web sites."

Another issue is that, for now at least, streaming radio affords advertisers few opportunities to buy locally—a limitation that owes itself to a combination of small audiences and limited geo-targeting options. Control by behemoth aggregators such as TargetSpot and Katz Online Network has helped make streaming a mostly nationalized space. To a degree, explains MediaVest's director of investment and activation Maribeth Papuga, this is only natural. "It's easier to 'sell it in' to a national buy than a local buy," she explains. "Planners often feel they reach people on a digital spectrum better with one of the national vendors that localizes rather than me going with a local radio station site."

But according to Melissa Colon, senior activation associate for MediaVest, if streaming radio is to come into its own and reach its full marketing potential, it must offer clients proven ways to zero in locally. "Internet radio started off being national, but now needs to move to where all of their vendors can geo-target; there will be campaigns that require that," she says. "If we're going to include online radio in all of our campaigns, we want to make sure that it can have all the capabilities terrestrial radio has."

Measuring Up

These days, no conversation about advertising is possible without talking about measurement. The measurement potential of radio that's consumed via the Internet is obvious, especially because streaming campaigns frequently involve more than just audio.
There are, for example, synchronized banner ads that encourage listeners to click on an advertiser's link. "Those click-throughs are measurable," enthuses Mullen's Fladgler. "For our Web-based clients, it's a no-brainer. You've got people listening online who are only a click away from information or a sale."

But the ability to track audience demographics is anything but an exact science, which has made measurement both a source of frustration and a potential opportunity. Until recently, the need for a single measurement standard has kept the streaming industry from moving forward, but Ando Media's Webcast Metrics has promised to change that.

Webcast Metrics has emerged as the primary measurement provider following Arbitron's decision earlier this year to discontinue its relationship with comScore and exit the sector.
Confirmation of the new ratings order came on April 8, when Ando announced that TargetSpot (which had formerly used Arbitron and comScore’s ratings service) would use it as its exclusive audience-measurement platform. Now that TargetSpot and Katz, the two largest service providers, are finally trading in the same currency, advertising and agency executives are voicing great expectations. "We can show how the different vendors match up to each other," Colon says. "It's really hard to evaluate when they're all on different measurements."

Ando is able to provide audience quantification through server-side metrics obtained directly from the station or its bandwidth provider, then slice and dice the data by region, station group or station. According to svp Patrick Reynolds, "Our model is to be able to get our arms around, in real time, who is listening to a stream wherever that occurs, through whatever device that occurs."

Evolution Theories

But while one standard helps simplify the planning process, it still doesn't provide advertisers everything they need to make the most effective and efficient buy in the nascent medium. For example, one of Ando's biggest shortcomings, according to agency reps, is its inability to precisely track audience demographics. For that, it overlays survey data from media and consumer research providers MRI and Nielsen or from the broadcaster's own research. (AdweekMedia is a unit of the Nielsen Co.) While critics may contend this approach is ad-hoc engineering, Matt Feinberg, president of multi-channel media marketing consulting firm Matt Feinberg Media, doesn't think Ando's demographic measurement deficiencies have put it behind the eight ball. "They will evolve in time to get that number, and they wouldn't be the only measurement tool that doesn't give complete ideal world measurement," he says.

For now, techniques are evolving. Online radio service Pandora, which creates playlists based on users' favorite tunes and boasts 26 million registered users, requires listeners to provide their gender and birth year when they sign up. This step alone gives Pandora access to more robust demographic information than terrestrial operators who are often reluctant to require registration, fearing it might cause users to click away. Yet even that fear seems to be ebbing. Clear Channel Radio announced last month that it had completed a comprehensive survey conducted with Ando to learn more about the online audiences of its 750 stations. After clicking the Listen Live button, users were given the opportunity at the player level to opt into what CCR senior vp of digital sales Michael Jackel called "a non-intrusive survey that doesn't detract from the listening experience." More than 50 percent of listeners asked to contribute opted into the survey.

Since Internet radio is not yet considered a stand-alone medium, would-be advertisers say they need a more integrated measurement picture that will allow them to compare how an audience listens to online versus on-air, mobile and satellite. "The industry is looking for the measurement services to treat a person's entire audio day versus having multiple vendor measurement that you can't marry together," Papuga says.

Ando, which also provides a spot delivery system, has drawn sharp criticism for only including clients in its ratings reports. The company says it provides measurement for 6,400 customers, mostly over-the-air stations, including 45 of the top 50 terrestrial radio groups. Fladgler is one of those voicing the criticism. "You can't be considered an authority on this if you don't provide measurement on everything," she says. Among Ando's most glaring omissions are Live 365 and Virgin Radio, two of the biggest pure-play providers.

Still, with marketers expecting more from their ad dollars-improved accountability and measurement, ROI and integration of old and new-Internet radio's proponents say that its inherent advantages give it a bright future. "Its ability to guarantee impressions and provide a post within 48 hours after a campaign runs sets it apart from terrestrial radio," says Horizon Media vp, director of national radio Maja Mijatovic. "It's going to lead the whole industry toward that technology."

Adds Horizon Media senior vp, director of local radio and promotion Lauren Russo: "Expanding on-air campaigns with digital components enhances the dialogue brands have with the consumer. Additionally, online radio benefits include impression guarantees, a wide range of ages, live delivery status and a growing quality audience."

That includes all the Bollywood fans who submitted videos for the Esurance Bollywood Casting Call, still being tallied at press time. One was a young lady named Aqua, whose solo rendition of "Jai Ho" from Slumdog Millionaire is among the most viewed on the site. Too bad she's from the United Arab Emirates, and not eligible to win.

--Nielsen Business Media