Internet Radio Advertising Impact Study A Parks Associates white paper developed for Forewords Provided By: White Paper | Internet Radio Advertising Impact Study A Paradigm Shift foreword No advertising medium exists in a vacuum. As marketers increasingly consider advertising campaigns holistically, measuring impact and effectiveness across media is an ever-larger priority for the industry. Of course, the measurement of cross-media ad effectiveness only grows more complex as media themselves diversify, as digital media become more central, and as media plans become more subtle. Over seven years ago, the Interactive Advertising Bureau launched a pioneering series of studies, the Cross Media Optimization Studies (or “XMOS”) that were among the first public, real-world, quantitative assessments of the contributions, individually and collectively, of individual media to total advertising campaign return on marketing investment. These studies, still an important benchmark in the industry, form a foundation that many others across the ecosystem have built on over the years. The IAB views this new TargetSpot study in the spirit of furthering understanding of cross-media advertising impact. This paper presents evidence for the power of Internet Radio advertising to increase the effectiveness of both digital (Internet) and Broadcast Radio ads. The IAB hopes these findings encourage marketers to think holistically about their advertising campaigns, and explore and take advantage of the synergistic benefits of well conceived and executed cross-media advertising campaigns, including digital audio. Joe Laszlo, Deputy Director, Interactive Advertising Bureau RAB is pleased to introduce TargetSpot’s important new research on the multiplier effect of Internet Radio advertising combined with Broadcast Radio schedules. While providing new insights into the synergies that exist among Broadcast Radio and an expanding array of digital audio platforms, TargetSpot’s Internet Radio Advertising Impact Study also reinforces findings of earlier Radio Ad Lab studies1 on the powerful synergy that occurs when Radio and its digital platforms are used within any given media plan: • Radio and the Internet have complementary roles in a media plan • Ad recall drastically improves when Radio and digital platforms are used in tandem • A positive impact on brand preference, purchase behavior • Increases in advertised brand website visitation The positive results of the Internet Radio Advertising Impact Study, evident across multiple ad categories are illustrated. The addition of Internet Radio listening impacts Broadcast Radio ad response rates more than any incremental increase in time spent with Broadcast Radio alone. As marketers increasingly gravitate to the Internet, this study makes a clear case for Internet Radio and Broadcast Radio as a key component in an effective media plan. Radio Advertising Bureau 1 Source: Radio Ad Lab & The PreTesting Company, Inc., The Benefits of Synergy: Moving Money Into Radio, 2004 Source: Radio Ad Lab & Harris Interactive, Inc., Radio and the Internet: Powerful Complements for Advertisers, 2007 © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 1 White Paper | Internet Radio Advertising Impact Study RESEARCH OBJECTIVES TargetSpot set out to quantify the additive value of Internet Radio advertising when combined with either Online advertising or with Broadcast Radio advertising. The research provides a statistical analysis of the increase in advertising impact when including Internet Radio advertising with either of these media. Internet Radio includes both online-only Radio stations and Broadcast Radio stations streamed on a computer, mobile/smartphone, or tablet device KEY FINDINGS: INTERNET RADIO USE INCREASES BOTH AD RECALL AND AD RESPONSE Internet Radio advertising is effective both on its own and in combination with Online advertising or with traditional Broadcast Radio advertising • Online and Broadcast Radio advertising response rates increase 2 to 3.5x among consumers who also listen to Internet Radio. • The addition of Internet Radio use contributes more to increased ad response of both Online advertising and Broadcast Radio advertising than increased usage of those media. • Specific brand or ad category recall and response improve when Internet Radio is combined with an Online or Broadcast Radio campaign. © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 2 White Paper | Internet Radio Advertising Impact Study INTERNET RADIO INCREASES ONLINE ADVERTISING EFFECTIVENESS Weekly Online use is higher among those who also listen to Internet Radio, demonstrating Internet Radio use complements Online usage (Figure 1). The Most Engaged Internet Users are those who Also Use Internet Radio Weekly Online Use Figure 1 1-7 hours Internet FigureONLY 1 users (n=684) INTERNET RADIO Listeners (n=812) Internet ONLY users (n=684) 8% 19% 1-7 hours 9% 16% 8% 19% 8-14 hours 30% 15-21 hours 26% 30% 100% 26% 49% Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates 0% 22+ hours 49% 43% 50% 9% 16% 22+ hours 43% 8-14 hours 0% INTERNET RADIO Listeners (n=812) 15-21 hours 50% 100% Online ad recall andSource: response rates significantly increase when combined with Internet Radio use (Figure 2). The data TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. —Radio Researchare by Parks Associates reveal that users who listen to Internet twice as likely as Internet-only users to respond to an Online ad. Figure 2 Internet Radio 100% Use Increases Ad Recall and Ad Response of Online Advertising Internet ONLY Users INTERNET RADIO Listeners Internet ONLY Users INTERNET RADIO Listeners Figure 2 75% 100% 50% 75% 2x 25% 50% 2x 0% 25% Recall 1+ Ad 0% Recall 1+ Ad Recall 1+ Product/ Service Category (Aided) Recall 1+ Recall 1+ Product/ Service Category (Unaided) Recall 1+ Product/ Product/ Service Service Source: TargetSpot Internet Radio Advertising Impact Study Category Category © 2011 TargetSpot, Inc. — Research by Parks Associates (Aided) (Unaided) Recall 1+ Brands (Aided) Recall 1+ Brands (Unaided) Responded to Ad Recall 1+ Brands (Aided) Recall 1+ Brands (Unaided) Responded to Ad FigureTargetSpot 3 Source: Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by© Parks Associates 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 20% 18% ad Figure 16% 3 3 2x White Paper | Internet Radio Advertising Impact Study 25% 0% Recall 1+ Ad Recall 1+ Recall 1+ Recall 1+ Recall 1+ Responded Product/ Product/ Brands Brands tobroad, Ad The positive impact of Internet Radio listenership on Online ad response is significant as well as and it influences Service Service (Aided) (Unaided) both online and offline actions—well beyond the clickCategory (Figure 3). Online ad response increases up to 5x among users Category (Aided) (Unaided) who also listen to Internet Radio. Source: TargetSpot Internet Radio Advertising Impact Study 2011 TargetSpot, Inc. —Online Research by Ad Parks Responses, Associates Internet Radio ©Use Increases Across the Board: Online and Offline Figure 3 20% % responding to ONLINE ad 18% 16% 14% 12% INTERNET RADIO Listeners 10% 8% 2.7x 6% 5x 4% Internet ONLY Users 5x 2% 0% Became a Called for Sent “fan” on a information email/ social text networking websites Purchased Purchased Clicked Visited Searched product/ product/ on ad advertiser's for more service service website information online at retail online Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 4 insurance travel-airlines, hotels, car rental, etc. 86% of respondents listen to both online-only Internet restaurants % of Internet users Radio and Broadcast Radio streamed on thetoInternet who listen consumer electronics 1.9x automotive INTERNET RADIO and recall the SAME product/service category advertised on both media financial services entertainment/media retail stores food products computers/software 2x % of Internet ONLY users who recall an advertised product/service category © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 2.3x 4 % respon 8% 2.7x 6% 5x 4% Internet ONLY Users White 5x Paper | Internet Radio Advertising Impact Study 2% 0% Became a Called for Sent Purchased Purchased Clicked Visited Searched “fan” on a information email/ product/ product/ on ad advertiser's for more social text service website information The synergy of cross-media advertising on both Internet Radio and service Online is evident when quantifying ad recall rates networking online at retail online of key product/service categories websites(Figure 4). Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc.Impact: — Research by Parks Associates Internet Radio Recall of Online Ads Increases up to 2.3x Figure 4 insurance travel-airlines, hotels, car rental, etc. restaurants consumer electronics 1.9x automotive % of Internet users who listen to INTERNET RADIO and recall the SAME product/service category advertised on both media financial services entertainment/media 2x retail stores % of Internet ONLY users who recall an advertised product/service category food products 2.3x computers/software 0% 60% 30% % that recall ad category on the Internet Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 5 60% % responding to ONLINE ad 50% INTERNET RADIO Listeners 40% 30% 28% Internet ONLY Users 26% 20% 10% © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 5 0% 1-10 hours 11-20 hours 21-30 hours 31+ hours on both media financial services White Paper | Internet Radio Advertising Impact % Study of Internet ONLY users who recall an entertainment/media advertised product/service 2x category retail stores products The addition of Internet Radiofood listening impacts Online ad response rates more than any incremental increase in time spent Online alone. 2.3x computers/software This profound synergistic impact is evident even among users listening to Internet Radio for 1 to 10 hours per week. The addition of Internet Radio boosts ad response rates by a greater percentage than increasing Online usage time by 30% 60% 0% 3x or more (Figure 5). % that recall ad category on the Internet Source: TargetSpot Internet Radio Advertising Impact Study Adding Internet Impacts Online Ad Response © 2011 TargetSpot, Inc. Radio — ResearchListening by Parks Associates More Than Increasing Online Usage Figure 5 60% % responding to ONLINE ad 50% INTERNET RADIO Listeners 40% 30% Internet ONLY Users 28% 26% 20% 10% 0% 1-10 hours 11-20 hours 21-30 hours 31+ hours Weekly Time Spent Using Internet Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 6 1-7 hours BROADCAST RADIO Listeners ONLY Users who (n=1009) spend 8-14 hours 67% 15+ hours 18% 16% the minimal amount of time listening Internet had higher ad response rates than BROADCAST to RADIO & INTERNET Radio RADIO 55% 28% 17% Listeners (n=812) heavy Internet only users 0% 50% 100% Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 7 100% © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. BROADCAST RADIO Listeners ONLY BROADCAST RADIO & INTERNET RADIO Listeners 6 % responding to ONLINE ad % responding to ONLI Figure40% 5 60% White Paper | Internet Radio Advertising Impact Study 30% 50% Internet ONLY Users 28% 26% 20% INTERNET RADIO Listeners 40% 10% INTERNET RADIO 30% ENHANCES BROADCAST RADIO’S ADVERTISING Internet ONLY Users EFFECTIVENESS 0% 28% 20% 1-10 hours 26% 21-30 hours 11-20 hours 31+ hours Weekly Broadcast Radio listening is higher among those who also listen to Internet Radio, demonstrating use of Internet Weekly Time Spent Radio complements Broadcast Radio listening patterns (Figure 6). Using Internet 10% Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates 0% The Most Engaged Radio Users are those who also Use Internet Radio Figure 6 1-10 hours 11-20 hours 21-30 hours 31+ hours 1-7 hours hours Weekly Time Spent8-14 Using Internet15+ hours Source:RADIO TargetSpot Internet ONLY Radio Advertising Impact Study BROADCAST Listeners 67% © 2011 TargetSpot, Inc. (n=1009) — Research by Parks Associates BROADCAST RADIO Figure 6 & INTERNET RADIO Listeners (n=812) BROADCAST RADIO Listeners ONLY (n=1009) 55% 1-7 hours 0% 18% 8-14 hours 50% 67% 16% 28% 17% 15+ hours 18% 16% 100% Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot,RADIO Inc. — Research by Parks Associates BROADCAST RADIO & INTERNET 55% Listeners (n=812) 28% 17% Broadcast Radio ad recall and response rates significantly increase when combined with Internet Radio use (Figure 7). 0% 50% The data reveal a 3.5x difference in ad response between Broadcast Radio only listeners100% and those who listen to both Broadcast and Internet Radio. are more likely to take action on a Broadcast Radio ad if they also listen to Figure 7 Consumers Source: TargetSpot Internet Radio Advertising Impact Study Internet Radio. © 2011 TargetSpot, Inc. — Research by Parks Associates 100% BROADCAST RADIO Listeners ONLY BROADCAST RADIO & INTERNET RADIO Listeners Internet Radio Use increases Ad Recall and Ad Response of Broadcast Radio Advertising 75% Figure 7 50% 100% 1.2x BROADCAST RADIO Listeners ONLY 1.2x 1.2x BROADCAST RADIO & INTERNET RADIO Listeners 3.5x 25% 75% 50% 0% Recall 1+ Ad 25% Recall 1+ Product/ Service Category (Aided) 1.2x 1.2x 1.2x Recall 1+ Recall 1+ Recall 1+ Responded Product/ Brands Brands to Ad Service (Aided) (Unaided) 3.5x Category (Unaided) 0% Source: TargetSpot Internet Radio Advertising Impact Study Recall Inc. Recall © 2011 TargetSpot, — Research Associates 1+ by Parks Recall 1+ Recall 1+ 1+ Ad Figure 8 ADCAST RADIO ad 16% Product/ Service Category (Aided) Product/ Service Category (Unaided) Brands (Aided) Recall 1+ Brands (Unaided) Responded to Ad 14% Source: TargetSpot Internet Radio Advertising Impact Study 3.8x 3.5x © 2011 TargetSpot, Inc.RADIO — Research © 2011 TargetSpot, Inc. — Research by Parks Associates BROADCAST & INTERNET Listenersby Parks Associates | All rights reserved. 12% Figure10% 8 16% 7 75% White Paper | Internet Radio Advertising Impact Study 50% 1.2x 1.2x 1.2x 3.5x 25% The positive impact of Internet Radio listenership on Broadcast Radio’s ad response is significant as well as broad and 0% offline actions—well beyond the click (Figure 8). Users who also listen to Internet Radio were includes both online and Recall 1+ Recall 1+ to Recall 1+ Recall 1+ from Responded more than 3x more likely thanRecall Broadcast Radio-only listeners take specific action an ad, e.g., search for more 1+ Ad Product/ information or go to an advertiser’s website. Service Category (Aided) Product/ Service Category (Unaided) Brands (Aided) Brands (Unaided) to Ad Internet Radio Use Increases Broadcast Radio Ad Responses, Source: TargetSpot Internet Radio Advertising Impact Study Across the Board: Online and Offline © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 8 % responding to BROADCAST RADIO ad 16% 14% 3.5x BROADCAST & INTERNET RADIO Listeners 12% 3.8x 10% 8% 6% BROADCAST RADIO Listeners ONLY 4% 4x 2% 0% Sent email/ text Purchased Called for Purchased product/ information product/ service service at online retail Became a Searched Visited “fan” on for more advertiser's a social information website networking online websites Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 9 restaurants automotive 2x insurance food products 2.2x retail stores 2.2x financial services entertainment/media telecommunications travel-airlines, hotels, etc. consumer electronics % of those who listen to both BROADCAST RADIO and INTERNET RADIO who recall the SAME product/service category advertised on both media % of BROADCAST RADIO only listeners who recall an advertised © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 3x product/service category 2.3x 8 % responding to BR 8% 6% White Paper | Internet Radio Advertising Impact Study BROADCAST RADIO Listeners ONLY 4% 4x 2% 0% Sent Purchased text service Called for Purchased Became a Searched Visited email/advertising product/ oninformation product/ on forRadio more is advertiser's The deep synergy of cross-media both Internet Radio and“fan” Broadcast evident in increased ad recall of key product/service categoriesonline (Figure 9). service at retail a social information website networking online websites Source: TargetSpot Internet Radio Advertising Impact Study Internet Radio Impact: AdbyRecall of Broadcast Radio Increases up to 3x © 2011 TargetSpot, Inc. — Research Parks Associates Figure 9 restaurants automotive 2x insurance food products 2.2x retail stores 2.2x financial services entertainment/media 2.3x telecommunications 3x travel-airlines, hotels, etc. % of those who listen to both BROADCAST RADIO and INTERNET RADIO who recall the SAME product/service category advertised on both media % of BROADCAST RADIO only listeners who recall an advertised product/service category consumer electronics 0% 30% 60% % that recall ad category on BROADCAST RADIO Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Figure 10 % responding to BROADCAST RADIO ad 50% 40% BROADCAST & INTERNET RADIO Listeners 30% 20% BROADCAST RADIO Listeners ONLY 24% 18% 10% © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 0% <1 hour 1-5 hours 6-10 hours 11-15 hours 15+ hours 9 listen to both BROADCAST RADIO retail stores and INTERNET RADIO who recall White Paper | Internet Radio Advertising Impact Studythe SAME 2.2x product/service financial services category advertised on both media entertainment/media % of BROADCAST 2.3x RADIO only telecommunications listeners who recall The addition of Internet Radio listening impacts Broadcast ad response rates more an than any incremental advertised 3x product/service time spent listeningtravel-airlines, to Broadcasthotels, Radioetc. alone. category 2.2x increase in This profound synergistic impact is evident even among users listening to Internet Radio for less than one hour per consumer electronics week. The addition of Internet Radio boosts ad response rates by a greater percentage than increasing Broadcast Radio listening time by 15x or more (Figure 10). 0% 30% 60% % that recall ad category on BROADCAST RADIO Adding Internet Radio Listening Impacts Broadcast Radio Ad Response Source: TargetSpot Internet Radio Advertising Impact Study more Inc. than Increasing Broadcast Radio Listening © 2011 TargetSpot, — Research by Parks Associates Figure 10 % responding to BROADCAST RADIO ad 50% 40% BROADCAST & INTERNET RADIO Listeners 30% 20% BROADCAST RADIO Listeners ONLY 24% 18% 10% 0% <1 hour 1-5 hours 6-10 hours 11-15 hours 15+ hours Weekly Time Spent Using Internet Source: TargetSpot Internet Radio Advertising Impact Study © 2011 TargetSpot, Inc. — Research by Parks Associates Internet Radio listenership has reached ~39% of U.S. broadband households © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 10 White Paper | Internet Radio Advertising Impact Study CONCLUSION INTERNET RADIO: AN ESSENTIAL ADDITIVE COMPONENT FOR ONLINE AND BROADCAST MEDIA BUYS The findings highlight the synergistic, additive value of including Internet Radio into the Broadcast Radio and digital advertising planning and buying process. Internet Radio users, a highly engaged demographic overall1, are also highly engaged in digital media and Broadcast Radio. Including Internet Radio with either digital media or Broadcast Radio ad buys will dramatically increase campaign ad recall. Moreover, it will increase ad response rates to the campaign, across a broad array of actions, online and offline, well beyond the click. The incremental benefit of adding Internet Radio to an Online or Broadcast Radio campaign is shown to have a much greater impact on the campaign Ad Response than an increased usage of these media. TargetSpot’s research findings offer quantifiable rationale for supplementing existing and future advertising campaigns with Internet Radio. The data demonstrate the value of Internet Radio as a complementary component of Online and Broadcast Radio advertising, offering a compelling case for brands to utilize Internet Radio to engage consumers with maximum impact. SOURCES TARGETSPOT INTERNET RADIO ADVERTISING IMPACT STUDY, 2011 TargetSpot’s Internet Radio Advertising Impact Study is an online survey of broadband households in the United States (U.S.). The study fielded between January 11- 26, 2011. The sample population included 2,127 U.S. broadband households (ages 18+) who listen to Broadcast Radio and Internet Radio and use the Internet once a month to daily. 1 Source: TargetSpot Digital Audio Usage Trends: A Highly Engaged Listenership © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 11 White Paper | Internet Radio Advertising Impact Study RESEARCH METHODOLOGY Using an online survey, TargetSpot tested four independent user groups to quantify and compare ad exposure, awareness, and response. The groups include: • Internet users (no Internet Radio) • Internet users that listen to Internet Radio • Broadcast Radio listeners (no Internet Radio) • Broadcast Radio and Internet Radio listeners The survey measured the following variables: Dependent Variables • Ad awareness by product/service category—Unaided & Aided* • Brand awareness—Unaided & Aided* • Ad response by product/service category • Brand purchase by product/service category Independent Variables Demographics & Psychographics • Gender • Age • Income • Ethnicity • Marital Status • Household composition • Place of residence • Time spent with advertising medium • Attitudes towards advertising * Ad monitoring sources Nielsen AdRelevance, U.S. (for Online advertising) and Media Monitors (for Broadcast Radio advertising) were used to verify active brands tested in the study. © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 12 White Paper | Internet Radio Advertising Impact Study ABOUT TARGETSPOT TargetSpot is the largest digital audio advertising network. TargetSpot connects top national brands, regional, and local advertisers to highly engaged internet and mobile audiences. Advertisers work with TargetSpot’s team or use its selfservice platform to create rich media campaigns delivering high-impact audio, display and pre-roll video advertising across thousands of online properties. TargetSpot advertisers can target consumers by demographics, listening preferences, and geography down to zip code level; while benefitting from real time reporting and analytics. TargetSpot has 80 distribution partners, including CBS RADIO, AOL Radio, Entercom, Live 365, Yahoo! Music, and MySpace Music. TargetSpot is based in New York City. For more information, please visit www.targetspot.com. ABOUT PARKS ASSOCIATES Parks Associates is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, primary studies, consumer research, custom research, workshops, executive conferences, and annual service subscriptions. The company’s expertise includes new media, digital entertainment and gaming, home networks, Internet and television services, digital health, mobile applications and services, consumer electronics, energy management, and home control systems and security. Each year, Parks Associates hosts executive conferences CONNECTIONS™, with support from the Consumer Electronics Association (CEA)®; CONNECTIONS™ Europe; and Smart Energy Summit. parksassociates.com | connectionsconference.com | connectionseurope.com | connectionsindustryinsights.com © 2011 TargetSpot, Inc. — Research by Parks Associates | All rights reserved. 13
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