BY KURT HANSON
It's now starting to happen in various markets across the country that radio station clusters are actually making money from their Internet initiatives. And some of them are even doing it with their simulcast streams!

One example of such a success story is the seven-station Clear Channel cluster in Orlando, FL -- WTKS, XL 106.7, Real Rock 101.1, Magic 107, Cool 100 FM, 740 The Team, and 540 WFLA -- where they're using the power of their local sales forces to sell Internet spot schedules to local advertisers, according to the cluster's Internet Marketing Manager Jeff Bosworth (pictured below).

The approach that is working, Bosworth says, is to (1) conduct a thorough "needs analysis" with the prospective advertiser, (2) design a custom-written in-stream spot with a coordinated banner, a custom-built "bridge page" that the banner links to, and a very specific call-to-action within the spot, (3) set realistic client expectations, and (4) present a comprehensive report at the end of the campaign to document its success and suggest improvements for future campaigns.

Advertisers aren't buying Internet,
they're buying RADIO
"Streaming for me is just the best thing since sliced bread," Bosworth told RAIN. "Streaming is radio, is what it is. It's not 'Internet,' it's 'radio!'

"Listeners are listening to the radio," he reiterates, "they're just listening over a different mechanism. And as a result we have a whole new set of inventory to sell." Clear Channel uses Hiwire to replace the broadcast station's spots with the Internet-only spots for about 200 of its stations.

Bosworth says that salespeople can sell Internet-only spot schedules either as an add-on to broadcast schedules or, alternatively, to a potential advertiser who has too small a budget for the cluster's broadcast stations: "For those accounts that don't necessarily have $5-$10-$15,000 to spend on a [broadcast] campaign, they're able to bundle this in...or sell this to a new advertiser that doesn't have the largest budget in the world. To get a customer and to substantiate a return, it's very, very simple.

"But, again, we don't run any broadcast spots over the Internet. Instead, we create Internet streaming-only spots, and we develop a call to action, to click. We always run a coordinated banner. We put the same call to action in that spot, and the goal here is to drive the customer to click. That is the goal. If we can get them to click, then we can substantiate the return, because we drive them to something that we've created together -- the bridge page. So they know where it's coming from!

"Each one is different because of the objective of what the client wants. We try to develop a campaign that's going to produce a return for them. It's unlikely that we'd link to a client's website directly -- we build a lot of bridge pages, we write a lot of copy, we write a lot of calls to action which we develop with the clients -- to create the perception that our listeners will get some sort of a deal.

Example: Images Car Care
"Let's take Images Car Care, for example. He'll send you a coupon for a free car wash, but he's really got two goals -- to get your e-mail address and to get you to his car wash. Once he gets you there, he'll try to upsell you.

"This particular package, he gets rotators on the radio stations, running 6A to 6A, which drive people to our websites. That helps us get our traffic up on our sites, but it actually benefits everybody -- our listeners get something free, our website traffic goes up, and our advertiser gets a return. He's been on for almost a year and he does 125 to 250 coupons a week.

"It's a 'win-win' all the way around!

"And our AEs have been very, very aggressive about finding clients. If they're out on a call and the prospect doesn't have that huge budget, this is like a trump card. Of course, their main focus is to sell the stations — we're in the radio business — but they've got this in their back pocket."

"Bridge pages" help salespeople
substantiate a campaign's success
Bosworth notes, "I love this streaming business, because I can go back to the customer every time and substantiate their business as soon as the campaign is coming to an end. I fill out a form to substantiate it and to make suggestions on how to make it better.

"The problem with website advertisers is that a lot of the time they have a website, but there's nothing there that they can prove they got a return because somebody stopped by their website. There's no call to action on their website.

"So that concerns me -- if I drive a customer to their site and there's no way for the customer to substantiate that Clear Channel sent them a number of customers to do business with them; then I'm not going to have a recurring customer."

Of course, there's a solution: If the "bridge page" (see Lipstick Depot example above) has traffic that could only have come from the on-stream spot schedule, it's easy for the salesperson to document how effective the campaign was.

Currently 15 to 18 recurring clients
at up to $.04 to $.05 per impression
"We've got a about 15 to 18 recurring clients on right now," Bosworth says, "and we're always looking for more. I've got a lipstick lady on Magic and Cool and a horseback-riding company on another one with a different demo. Campaigns run a for month, but the campaigns are based on impressions, so they run out when they run out. And selling at $.04 to $.05 per impression is what I'm trying to concentrate on.

"But I'm not trying to sell this as an Internet product -- I'm trying to sell this as a RADIO product. A P-1 listener is listening to the radio and our advertisers are buying radio. It just happens that a piece of it is the Internet -- the banner and the bridge page, so people can see more information.

Bosworth notes that 1/3 to 1/2 of the spots are local, with the rest sold by Hiwire or Clear Channel Radio Interactive sales. He says that on some stations' streams, some advertisers may be on every single break because they want the frequency.

"We had one client who bought 75,000 impressions per month on a quarterly deal, for three months, but we only served 42,000 in the first month, so we just moved a lot of that over to the next month and threw another station in there.

Bosworth, who was a station client for several years (he owned an ISP (Internet Service Provider)) before he joined Clear Channel about a year ago, concludes, "I think it's wonderful because it's radio -- it's just over a different piece of machinery."

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... Much of the concern over revenues in our industry has been about the slow development of a significant market for national Internet radio spot sales. However, local radio spots have always sold for significantly higher CPMs and CPPs than national and network radio spots. Plus which, local advertisers, as opposed to, say, national media buyers, really care about advertising effectiveness -- i.e., making the cash register ring -- and are in a position to watch and judge that effectiveness. Clearly, broadcast stations have a leg up here over Internet-only webcasters. Broadcasters have got listeners who want to listen to their programming on their computers (e.g., in office buildings with bad reception). They've got salespeople with relationships with advertisers. And by comparison to broadcast schedules, adding some Internet elements to a buy is a relatively affordable upsell! Finally, broadcasters who don't stream (Infinity, etc.) should note that if CCU sells only one spot per hour at their target pricing, they have probably already covered most, if not all, of their streaming and royalty costs! -- KH ...

This is #3 in a series of recent RAIN articles on broadcasters' success. (See interviews with CCRI's John Martin and Clear Channel/Cleveland's Jim Varga here and here.) If you've got a success story you'd like to share, e-mail us here or use the feedback form below.

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From today's Wall Street Journal: "Internet-radio companies are ramping up a fight to avoid music royalties they will owe record labels beginning Oct. 20, but so far it isn't clear if they will be able to head off the federally mandated payments.

"Online radio companies lobbied Thursday on Capitol Hill to urge Congress to delay or adjust the royalties, which they argue are too high for a new medium and could force smaller Webcasters to shut down. They also are going to court to appeal the rates, which were set in June by the Librarian of Congress...

"The music firms have been negotiating with Webcasters to work out a compromise, potentially including a special royalty structure that would allow smaller firms to pay fees based on a percentage of their revenue, rather than a per-song charge. So far, according to people with knowledge of the matter, the continuing talks haven't produced a deal...

"Some Internet radio firms and broadcasters have shut down their Webcasts, at least in part because of the upcoming royalty payment. 'It was purely an economic decision,' said Clarke Brown, chief executive of the radio operations of Jefferson-Pilot Corp. The company had been streaming 15 of its 17 stations online, but shut them down because of the royalty.

"A bill introduced in July in the House of Representatives would change the rate-setting process and ease the payments of smaller Webcasters, but there isn't yet a companion bill in the Senate. The House bill doesn't yet have a hearing scheduled, though its supporters are working to set one up..."

Read this story in today's Wall Street Journal, or if you subscribe, read it online here.

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... As shown in today's lead story in RAIN, commercial broadcasters are in a position to make money with Internet radio either right now or very soon. Small independent webcasters and non-commercial stations, however, are in a much different position. They're the operators who are providing the exciting diversity of Internet radio -- giving exposure to dozens of music formats and thousands of artists who can't get exposure on AM and FM radio any more. And they're about to get wiped out if Congress doesn't fix the mistake it made in the CARP legislation -- and if the record industry doesn't offer a voluntary compromise solution to save them! -- KH ...