Youth switching to Web radio

Maybe video didn't kill the radio star after all, but streaming media may indeed sound the death knell for the FM dial, as more and more Internet channels draw new listeners, particularly among the youth crowd....

Maybe video didn’t kill the radio star after all, but streaming media may indeed sound the death knell for the FM dial, as more and more Internet channels draw new listeners, particularly among the youth crowd.

It is the music medium of the future, believes Glen Tibbits, brand promotion manager at Labatt Blue, who hasn’t yet invested in Web radio but is considering it. ‘Media habits appear to be changing, specifically among young adults,’ he says. ‘We don’t know what the timeline will be, but wireless radio is coming.’

In an online survey fielded by Toronto-based marketing consultancy Youthography last May, 43% of Canadians aged 16 to 24 had tapped into an online radio channel in the past month. Meanwhile, in the U.S., Arbitron/Edison Media Research found, through telephone interviews conducted last January with 3,005 respondents aged 12+, that streamies – those who watch or listen to Webcasts online – represented 44% of all Internet users and 27% of Americans overall. The research also indicated that Netizens spent a full hour and 30 minutes less time listening to traditional radio than their offline counterparts.

The experts cite several reasons why young adults are tuning into their PCs in droves. One is that they aren’t bombarded by 20 minutes of ads every hour online, says Anne Burkart, communications manager for the U.S.-based radio station Spinner.com. ‘We [run ads] for one minute per hour,’ she says. ‘You’re getting a listening experience that lasts 60 minutes, so there’s a very strong retention span where you have that captive audience.’

Plus, there’s the matter of choice, which is a huge factor among trendsetters who are loyal to specific genres, like electronica or alt rock, but can’t find their music on the FM dial. On the Web, each person can create their own unique listening experience, bypass songs they dislike, and are therefore less likely to change the channel.

That makes life easier for the station itself, points out Brad Porteus, VP of MTVi Radio, an Internet affiliate of the U.S. TV channel. ‘We can pick music that may not normally get selected [by regular radio channels] for fear that people won’t like it and will move on,’ he explains, adding that he views MTVi as a ‘narrowcaster’ as opposed to a broadcaster. ‘There’s different programming the audience can listen to [on the Web], ranging from music from MTV, to music you may not hear on traditional radio.’

The sheer number of music genres available on the Net makes niche targeting a lot more tenable and allows marketers to speak to a particular group, according to Youthography, which outlined the benefits of online radio in one of its weekly newsletters. Among them was the fact that the cost of advertising on Web radio is comparable to that on the FM dial.

Plus, the Internet eliminates the geographic restrictions of FM, allowing brands to reach their target no matter where they live. ‘Online radio could be extremely popular in rural areas where there isn’t Flow 93.5 [Toronto's urban music station], or anything remotely like a college or university radio station with a large signal,’ says Max Valiquette, president of Youthography.

Ted Boyd, president of Toronto-based streaming media broadcaster Iceberg Media.com, points out that Web radio involves both a passive and interactive experience. ‘You can go back and forth and that’s a very unique thing.’ Boyd pins his core demographic as 18-to-34 year olds, and according to Iceberg’s own online research, says the site lures half a million unique visitors each month across its various channels, which include electronica station 1groove.com and indie-alt rock portal 2kool4radio.com. ‘The channels are aimed at the disenfranchised music listener who couldn’t find what they wanted to hear anywhere else.’

In fact, several marketers are investing in customized radio sites, with songs selected to appeal to their demographics, in order to offer value-added services to customers. The Ford Motor Company of Canada, for instance, launched expectmoreradio.com on its Ford.ca Web site June 18, through a partnership deal it signed with Iceberg Media.com. Promoted on other popular Web sites like Yahoo, Sympatico and MuchMusic, the station will offer ‘modern rock without an edge’ from artists, such as U2, who would appeal to the channel’s broad 18-to-29-year-old target of potential Ford Focus buyers, according to Mark Berardo, account manager at Young & Rubicam, the automaker’s AOR.

On the station itself, Ford runs its own 15-second spots every three or four songs. While expectmoreradio.com might solicit other advertisers down the road, Berardo says

it won’t be a priority. ‘Ford, for the first time, is owning the medium. They don’t want to plug it with tons of advertising.’

Indian Motorcycle and Du Maurier are also finalizing deals with Iceberg Media for branded online radio portals. ‘It allows you to, as a brand, give something back to your user, [especially] if there’s a vacuum there,’ explains Valiquette. But customization isn’t for everyone, he warns, because there has to be a level of investment involved. ‘It probably doesn’t work if you’re a small brand, because there’s a need for distribution and media support around it.’ According to Boyd, a basic looped channel could cost just under a $100,000, but because the characteristics could vary – a station could quickly change its music mix – so too can the price.

However, there is still the option of purchasing ads on existing online channels. Internet radio offers a nice perk – the ability to create an immediate call-to-action, which is what online listeners actually want, according to the study from Arbitron/Edison. It found that 53% of them prefer to see information on advertisers’ products on a radio channel, while 48% want to print off coupons, 42% want to be able to buy products and services from a station Web site, and 40% want a link to advertisers’ portals.

On May 17, Seagram Canada introduced its Frost Cooler Vodka beverage on Iceberg’s 1groove.com and 2kool4radio.com, which roughly matched its demographic of women aged 25 to 34. The campaign consisted of a viral e-mail component and an Internet ad using Vokens, a proprietary technology owned by Eye-Return 360′ Solutions, which allows animated images to glide across a page, thereby catching the attention of users. In this case, clicking on a picture of the red drink took you to www.frostyreception.com. There, browsers were encouraged to interact with the brand, by signing up for free merchandise or sending e-greeting cards to their girlfriends. (For more information, see Direct + Interactive cover story).

In little over a week, the stash of 7,000 gifts was depleted, reports senior marketing manager Scott Pederson. ‘People liked the ad because it was different.’

Pederson says Seagram bought space on Iceberg because it wanted to be on the leading edge, an attribute that is important to the core customer, although he points out the company didn’t cut into its marketing budget for traditional radio. ‘I don’t know that it was sacrificing one for the other. I think we just came up with a more integrated plan. This brand is cool and non-traditional and it’s something we wanted the media plan to reflect.’

Brand personality is important to note when picking a channel to invest in, adds Boyd, who says the station is very careful about which ads go where. ‘We take time to make sure the sound, feeling and context of the ad matches the genre itself.’

Sebastian Royce, creative director of gluemedia.com, a U.K.-based digital advertising agency, agrees it doesn’t make sense to recklessly shove ads out into cyberspace. ‘You see some ads in irrelevant places, and it’s a detriment to the brand,’ he says.