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XAPPmedia Issues Internet Radio Ad Load Report


The latest Internet Radio Ad Load report from XAPPmedia explores how four leading Internet radio services were managing and filling ad inventory during and immediately after the 2014 holiday shopping season. The data collection started in November, 2014 before Black Friday, continued again in December, 2014 before Christmas and then concluded in January to provide a post-holiday point of comparison.

The results showed that the number of advertisers identified rose between November and December and then dropped in January. The difference is a much steeper climb in advertisers after Black Friday in the heart of the holiday shopping season. This increase in advertisers likely contributed to the increase in ad loads.

Additional key findings showed:

  • 101 different advertisers were identified
  • On one radio service there were 50+ advertisers identified while the other three averaged only 22 advertisers during the same period
  • The majority of advertisers or 87 percent, appeared on only one of the radio services while 10 percent were identified on two services and 4 percent on three
  • No advertisers were found on all four radio services
  • There is little doubt that Internet radio and broadcast radio are competing for ad dollars and relevance with top audio advertisers
XAPPmedia concludes that the future of Internet radio economics will be dominated by advertising revenue. This shouldn't surprise anyone, as the closest corollary to Internet radio is broadcast radio, which is overwhelmingly driven by advertising. Satellite radio is the subscription equivalent for broadcast radio and it is tracking at 8% of listening, according to Pew Research Center data. That is not far from the 11% estimate for subscription-based Internet radio.

Media commentator Greg Satell of Digital Tonto offers this explanation that he characterizes as Media's Golden Rule: "Marketers are willing to pay more for consumers than consumers are willing to pay for content. This rule appears to apply to 89% of Internet radio listeners. Consumers have a wide variety of payment options with most ranging from $4.99-$9.99 per month. These services all offer adfree listening and typically include other features such as on-demand track selection. Despite these benefits, most consumers choose to listen to ads as their cost of using Internet radio services.

The analysis considered more than 10 metrics related to Internet radio Ad Load. Some of these metrics and findings include:

  • Average Ad Load Per Hour (minutes), 2.69
  • Average Number of Ad Units Per Hour, 6.45
  • Percent of Ads that Were 30-Seconds, 77%
  • Number of Identified Advertisers Per Month, 29-57
There has been limited public information on the reality of ad serving in Internet radio. In 2014, Pandora's CFO mentioned in an investor conference call that the target ad load was no more than three minutes. Based on data from November through January, it appears that many Internet radio services have adopted this standard, as 2.69 minutes is the average ad load across services. This is less than one-third of the hourly ad time that broadcast radio serves to its listeners today.

There is also a strong bias toward the traditional 30-second ad format, although the services differ on whether and how often they serve ad blocks as opposed to single ads. Also, the seasonal trend is evident in the results showing a rise between November and December followed by a January fall. This finding would appear to follow convention, but it is the first attempt we are aware of to quantify the change across a number of different Internet radio providers.

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Benztown: Benztown was at Radiodays Europe 2024, which was held in Munich on March 17-19th. Benztown hosted a well-attended party for customers and partners during Radiodays Europe 2024 on Monday, March 18. Pictured is a traditional Volksmusik band performed for Benztown party attendees at Munich's Augustiner-Keller restaurant. In front in black shirt raising a glass is Oliver Klenk, Head of Production & Composition, and to his right, also in black shirt, is Stephan Halfpap, General Manager, Maxmedia, Austria.

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