Interviews with Digital Media Thought Leaders
Radio Commercials That Generate Internet Ad Revenues
Podcast Video | Posted by Phil Leigh on May 7, 2008
If you would like to learn how radio stations can use the Internet to generate incremental revenue from conventional broadcast advertisements, this interview is for you.
Subject: Our guest today is Scott Savage who is a principal in a new venture named Octopus. The venture provides a way for traditional radio to generate incremental ad revenues from conventional broadcast advertisements. Here’s an example of how it works:
An auto dealership sponsors a week of regular radio commercials. The script invites listeners to “go to” the radio station website and enter a key word, or phrase, in a box typically displayed in the upper right-hand corner. In this example the key phrase is “win a car”. Once visitors enters the phrase, they are “taken-to” a micro-website hosted by Octopus that has the look-and-feel of the auto dealer’s website. At the micro-site they may enter their email address to qualify for the win-a-car contest thereby becoming a highly qualified lead.
Once the micro-site visitor enters their email address the radio station charges a fee to the sponsor. The radio station typically pays 15% of such fees to Octopus. There are no fees to Octopus unless there are incremental revenues to the radio station. This excludes a modest $200 set-up charge.
The radio station avoids any costs of constructing the applicable websites, monitoring the registrants, or even adding new salespersons.
Phil’s Take: There is no question that radio stations are going to have to figure out ways to generate incremental revenues from the Internet. The maturity of radio has come into sharper focus now that the overall economy is under pressure.
It is wishful thinking to suppose that the recent declines in radio ad sales will “come back” once the economy improves. The economic decline has motivated advertisers more than ever to find ways to make their ad dollars more effective. Whether Octopus is the answer remains to be seen, but it certainly looks like it is worth a try.
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Categories: Podcast Video
Tags: Blogs, digital-media, Internet-Advertising, Phil-Leigh, radio, Radio-Advertising, Scott-Savage, Search-Engine-Optimization
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I’m interested in hearing your opinions on having commercials on internet radio and what you think should be a price for that kind of media buy (as a 30 second spot).
Thanks!
Jackie
I’m interested in hearing your opinions on having commercials broadcast on internet radio and what you think the price for a 30 second media buy would be based on it’s national exposure.
Thanks,
Jackie
I can’t provide a specific figure, but can share some relevant information.
First, I understand that pre-rolls for video at prominent websites like The New York Times and The Wall Street Journal have been reported to get CPM rates that are comparable, and perhaps higher, than the CPM rates for ads on popular TV shows like Lost and Desperate Housewives.
Second, the Internet Radio stations are fighting for audience now and are minimizing disruptive ads. That means they focus on display ads, music download sales, or other sorts of tie-ins. For example, a talk radio show that has developed a regular following might consider getting a specific sponsor for each show. A product that the host will personally endorse might influence his, her audience, enough to buy the product or service.
Despite my first point, there are some internet radio stations that seem to be taking ads like you propose. One example is WS Radio dot com. They also have a lot of pop-up ads.
– Phil