Report: Net Advertising To Overtake Radio

Online Ad Spending Surging

U.S. Internet advertising spending is poised to overtake radio advertising for the first time, providing a reminder that broadcasters need to be more aggressive in their embrace of online opportunities, reports FORBES. U.S. radio ad spending is expected to inch up 1.5% in 2007, to $20.4 billion, short of online ad expenditures of $21.7 billion, which will be up 22% from last year, EMARKETER Sr. Analyst BEN MACKLIN said in a report.

Over the next several years, radio station websites and online audio advertising "will be the principal drivers for radio advertising growth," MACKLIN said.

...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.

But he doesn't think that growth will add up to much. 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.

Terrestrial radio companies still retain massive audiences, but consumers are spending less time listening to radio than they do surfing the Web or watching TV.

In addition, only 17% of U.S. consumers consider radio the "most" essential medium, down from 26% five years ago, according to a study released earlier this year by ARBITRON and EDISON MEDIA RESEARCH.

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.

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