Emarketer analyst Ben Macklin says online ad spending is expected to surpass radio for the first time this year. Radio dollars are expected to grow from 20.1 billion in 2006 to 20.4 billion by the end of this year. However, that’s less than online ad spend of 21.7 billion, which will be up 22% from last year, Macklin said in the report. Over the next several years, radio station websites and online audio advertising "will be the principal drivers for radio advertising growth,” Macklin said. He expects the sluggish radio advertising market to continue experiencing slow growth, climbing to an estimated 22.6 billion in 2011, when online ad spending is expected to surge to 44 billion.
For many advertisers, the choice between radio and non-radio online ads won’t be an either-or proposition, Macklin said, pointing to studies showing that consumers often listen to the radio while consuming other media and that a mix of terrestrial radio and online ads can be far more effective than online ads alone. Said Macklin: "There are many synergies between radio and the Internet and, for the most part, they complement rather than compete with each other. Advertisers should not abandon radio in favor of the Web but combine the two media to take advantage of the unique attributes of each."
RBR observation: One must remember with the successes of radio website listening such as Clear Channel’s network and others, radio will take in a good deal of this web ad spending, so the picture isn’t so bleak. Everything is moving to digital. If radio can’t sell an advertiser on the terrestrial version of its content, it will sell that advertiser the target ability and copy splitting ability of its internet stream.
Remember, in-car listening ability of streaming audio is only years away from being standard equipment. With that option available, advertisers will take interest in a big way. If HD Radio develops a means for addressable advertising in the meantime, it will change the picture even faster. Hopefully all part of the near future car entertainment and information dashboard.