Total US advertising revenue attributed to online radio web sites is forecast to increase by 56% each year over the next five years, to reach $320 million by 2009, according to a new report by Borrell Associates.
It is projected that $30 million will be spent on banner adverts and $4.5 million on streaming audio advertisements across online radio web sites in 2004. A combined figure of almost $35 million, this equates to 0.3% of the $10.5 billion spent on internet advertising in 2004.
Albeit a small percentage, Gordon Borrell, president and chief executive of Borrell Associates, claims consistent growth in audience over the next five years is bound to “significantly” erode traditional broadcasters’ advertising revenue.
Borrell warns, however, that online radio web sites should not expect any sudden surges in advertising revenue in the imminent future: “I don’t think there are amazing opportunities in online radio web sites staring advertisers in the face right now. Traditionally, the audience gets there first. Almost all of the advertising we’re seeing now is national advertising. Local advertisers will hold off till the audience hits a critical mass of around 60 million, which we don’t see happening until 2009.”
The US online radio audience has grown to 20 million regular listeners in 2004, more than 10% of the estimated US internet population of 189 million.
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