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04.04.2008
Radio Stations Reach Out to Make Money Online
Mindful that their central expertise is broadcasting, U.S. radio stations are actively seeking help from Web- and wireless-savvy consultants, software makers and content providers to help them earn more money online.

This represents a change from radio’s initial forays into the Web/wireless space, when new media were either seen as less important than over-the-air broadcasting, or threats to the very existence of radio.

“Stations as a whole are definitely more sophisticated in their understanding of the Web and mobile solutions,” said Seth Golub, vice president of business development for BeatTheTraffic.com. It provides white-label vehicle traffic reporting solutions for broadcasters, with Web- and mobile-based reporting interfaces for listeners.

“Leading broadcasters are embracing these channels as a new opportunity, rather than seeing them as a threat.”

In doing so, radio broadcasters are admitting just how much they don’t know, and turning to outsiders for help.

“They often lack expertise in online marketing, and tying online advertising into combined offerings,” said Steve Sommer, SVP of marketing at WideOrbit; a provider of advertising management software.

“Some of the most compelling arguments are for advertisers to do a combined campaign — broadcast to reach a large audience, and then online advertising at the radio station site to get further information, click through and even conduct a transaction.”

Combined offerings are just one of the Cool New Advertising Tools available to radio broadcasters. Another is the ever-growing variety of Web-based activities such as streaming audio/video, blogging and social networking sites such as Facebook; all of which can be tied into a radio station’s on-air presence and identity.

Podcasting is yet another powerful tool for radio stations online. The reason: Podcasts “are heavily requested items on the Web sites across the board, and represent a significant portion of the Web traffic to every site that actively promotes them and keeps them current,” said Claudio Canive, CEO of Platformic.

His company sells a creation-to-delivery Web platform to broadcasters, developed by the original architect of the Clear Channel Web platform.

For radio stations, podcasts are an audience booster, “as many people prefer to download the podcasts and listen to them when convenient,” said Sommer. In return, listening to podcasts gives these people added incentive to tune into the station live whenever broadcast tuning is more convenient than toting an iPod, such as when preparing breakfast at home or driving to work.

Perhaps the most powerful new approach for radio is the seamless integration of a station’s on-air and online presences, creating a multimedia identity that not only trumps other stations, but other Web sites as well.

“Stations compete with the online portals and search engines for their visitors,” said Seth Golub. “‘Me too’ solutions won’t work; stations need more personal, more compelling and higher-value tools to attract their listeners. Integrating online solutions with on-air broadcasting can be a real advantage.”

Smart radio stations are all using these tools, guided by online-knowledgeable suppliers who understand the Web and wireless the way broadcasters understand AM and FM. Yet roadblocks remain even for savvy of station managers, impeding their ability to develop online revenues fully.

In particular, “A successful online revenue program needs participation/buy in by programming and promotions coupled with a sales staff who understands the online space,” said Platformic’s Canive.

“Most radio clusters hit a roadblock in any one of these departments. They may have a really Web-friendly morning show with a sales manager who has no idea how to monetize it, or they may have a very Web-smart GSM but the show hosts just don’t get the web, and since they are the top show in the terrestrial market no one will push them to get more involved.

“The harder-to-manage roadblocks are a lack of enthusiasm on the part of programming promotions and talent that can be partially addressed by making things really easy for people to use,” he added.

“But if the root enthusiasm or general lack of interest in the online brand doesn’t exist, [this problem] can only be solved by adjusting personnel.”

Is all of this effort justified? From an economic standpoint, the answer is a most definite yes, said WideOrbit’s Steve Sommer.

“Radio stations track the trends in audience and advertising on the broadcast side. They typically still get 95%+ of their revenue from the broadcast side, and know they need to increase their online revenues.”

And increase it they will, thanks to the combination of tools, expertise and radio management willingness to do things differently. For those stations that embrace the online marketplace, Sommer expects that the revenue share they derive from this space will grow “from the current 1 to 5 percent to perhaps 25 percent in the years to come.”


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