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New Wave

AM/FM not doing it for you? Your customers are surfing the Web now--sooner or later, they'll be listening to Internet radio.

This story appears in the June 2001 issue of Entrepreneur. Subscribe »

The prospect of advertising on Internet radio stations may have seemed far-fetched last year; many marketers decided to spend their online dollars on banner ads instead. But given the disappointing click-through rates for mute banners, Internet radio ads have suddenly become more appealing.

Although Internet radio is still in its infancy, it's quickly gaining in popularity. In fact, the results from a recent survey by media research firm Arbitron indicate the medium will get a considerably larger chunk of overall Internet ad dollars in the next three years, given that the number of Americans who've listened to online radio grew from 6 to 20 percent between 1998 and 2000. By 2005, about 41 percent of the population is expected to tune in to Internet radio at least once per week, according to Forrester Research.

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