Advertisers will shift from Mass to Niche and “Individual”
From MediaPost's Diane Mermigas:
An involuntary open broadband infrastructure will universally support new addressable ad business models and metrics. Broad adoption will shift advertisers from buying TV programs and mass demographics to paying premiums for niche audiences and individual consumers, according to Parks Associates analyst Heather Way.
Premiums…niche audiences…individual consumers.
Although Diane is talking about TV, radio is subject to the same technological transformation which empowers both consumers and advertisers.
Today – here, now – we have the opportunity to provide advertisers with connections to individual consumers and niche audiences which better fit their needs than the "faceless mass" they are accustomed to buying.
That is a premium model which will deliver premium results and premium dollars.
That is available thanks to online radio and the degree to which broadcasters (and others in the space) commit to uncovering rich consumer data on an individual basis.
I must tell you, broadcasters in particular have been slow to this party. And they risk being left behind by the revolution which is coming.
The reason is that short term incentives trump long term ones. The idea that I can create streams which match my station exactly – ads included, with no targeting whatsoever – means that I am surrendering the notion of targeting for the notion of (presumably – and questionably) bulking up my Arbitron ratings so as to maximize my traditional buys.
Mark my words: There will be an ocean of online radio competitors of various shapes and sizes who are not beholden to Arbitron and place no obstacle between themselves and the future of advertising.
They will rush to target. They will rush to provide rich connections between their consumers who want to buy stuff and their advertisers who want to sell it.
They will rush to participate in an ecosystem where the individual is the unit of measure, not the distribution channel. Where "how much you know about your individual consumers" is vastly more important than the head count – or ear count – of that audience.
Recently a Mexican licensee (who is free to consider their streams and their stations one for Arbitron purposes) asked me what all broadcasters would do if they could simply tack their streams on to their over the air stations in Arbitron (something which is still not possible for the most part). I said they would absolutely, positively do it. Not because it's the smart thing to do, but because it's easy and it suits the ultra-short term agenda that drives the radio business.
I'm hoping that you will all prove me wrong.