Dynamics of digital marketing: Digital radio attracts marketers

WARC, 13 February 2014

NEW YORK: Radio is gaining a new lease of life as a medium with listeners tuning into digital stations on a wide range of devices, from desktops to in-car systems and mobile devices.

A new report from insights provider eMarketer – Digital Radio: Usage Grows, but Lack of Scale Remains a Challenge – estimated that there would be a monthly average of 159.8m digital radio listeners in the US in 2014, up 8.1% on the 2103 figure.

Listener numbers were expected to continue to grow out to 2018, albeit at a slower rate, by when the total will reach 183.4m.

These were mass market figures, said eMarketer, noting that in 2014 those people listening to digital radio would represent 63.5% of internet users and 50.1% of the overall population. By 2016 the comparable figures were projected to be 68.4% of internet users and 55.8% of the general population.

"Marketers are tapping into this opportunity by attaching their brands to digital radio services in traditional and novel ways," said eMarketer, citing 15-second spots and branded playlists as examples. But it added that the sector faced challenges over scale and pricing consistency.

One of the trends it identified was the growth of personal stations, serving music based on user preferences and prior listening activity, alongside digital extensions of existing over-the-air stations.

Companies such as Pandora have pursued the first method, clustering audience preferences into categories that can subsequently be matched up against different marketing profiles.

Sports drink Gatorade is one brand to have utilised this, as Pandora's chief chief technology officer explained at an ad:tech event in San Francisco. Three separate playlists were designed to help prepare people for workouts, to then exercise and afterwards to recover and these were used by almost 500,000 teens over a two month period.

Other trends included a shift away from desktop devices and a mix of ad-supported and subscription business models.

Separate data from Accustream Research indicated that total digital music listening hours were also rising in the US, from a monthly average of 4.22bn in 2014 to a predicted 6.70bn in 2016.

Data sourced from eMarketer; additional content by Warc staff

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