Why Radio Doesn’t Make Money on Digital

It’s simple – advertising that’s not relevant!


Pandora has figured out the formula… less commercials, better ads. The days of straight AQH are quickly fading away. Advertisers now care more about 1 person that is willing and able to buy than 100 people who could care less about their advertisement.


It is no wonder that Pandora is the leading advertiser in some local markets. They are using technology to their advantage and offering advertisers the opportunity to reach a very narrow, targeted audience. And advertisers’ dollars are following. As the mobile device knows so much about the user who owns it, you would think that many stations would inquire into the demographic/psycho graphic information behind these users; but this is not the case for the most part. Most stations simply view the digital component as another way to increase their AQH and basic demographic info such as 25-54, male, Caucasian, and with an income over 100k.


It’s no wonder that pure-plays are stealing audiences and ad dollars… but there is a solution for stations across the county…


Offer fewer commercials digitally, and use that time for more content. In terms of advertising, pick a system that provides you with the data behind the users of your digital products, and begin to use it to your advantage. You can now say, “this ad will run to people 25-54, male, Caucasian, an income over 100k, in this zip code, that has a family of four, and drives a Chevy.” An automobile dealer will gladly pay much more to reach this person. It is very targeted. And at the same time a separate commercial could target a woman’s demographic. This is the nature of digital targeted advertising that over-the-air spots can not do.


Understanding your audience is key in keeping them engaged. Comment below with some of your thoughts on the nature of targeted advertising.