There's Still No Agreement On Ad Insertion

9-17-13

Setting aside, for a moment, the fact that broadcasters have yet to find an industry-wide solution to seamlessly play music and commercials online, they are also far from an agreement on whether or not inserting ads into their streams is worth their time. Internet pure play companies will, of course, tell you its worth every minute of their time because they can target ads, and, because it's their bread and butter. It's their primary source of ad revenue, unlike radio which already has an abundance of over-the-air inventory.

Vendors that provide the technology will tell you radio is missing a real opportunity to make money when they choose not to insert ads. Yesterday, at the RAIN conference in Orlando, it was clear broadcasters are still hesitant to spend money and time on a technology that produces very little return.

Saga Communications has been very outspoken about walking away from ad-insertion. Executive Vice President Steve Goldstein said Saga spent a lot of time discussing it and found monetizing it wasn't easy. "It was difficult. One funeral home in Milwaukee was on during every break. Smokey The Bear commercials is not the way to go." Goldstein said it also became an issue in the traffic department so there were a number of issues that caused Saga to question the effort. "People were telling us they now have a computer at the office, not a radio. We wanted to give them the total radio listening experience."

Greater Media's Tom Bender said at the moment his company is using ad insertion but they are also using a lighter commercial load and filling with music "to create a better expereince for the online listener." That of course begs the question, why does the over-the-air listener have to tolerate heavier spot loads and the online listener doesn't?

Triton's Mike Agovino said that, other than Clear Channel, the rest of the broadcast industry has not monetized digital. "At RAIN #20 there shouldn't be such a panel. It's insanity to me. Your ability to know abot the end user is at your fingertips." He said pure play broadcasters are monetizing digital at a much better rate because they know more about their audience.

Natalie Swed Stone, who is the US Director for National Audio at OMD, questioned Agovino's statement that the panel was insanity. "I don't understand why you say we shouldn't have this panel. We're talking about how pure play continues to win." She went on to say that what used to be one budget for an 18-49 demo has morphed into a request to take that same budget and apply it to eight different segments -- that can now be targeted using online audio -- in that same 18-49 demo.

Saga's Steve Goldstein summed it up by saying broadcasters "are getting hurt because we are still in our own little box."

(9/18/2013 6:59:06 AM)
The panel that we should be having is "how come radio can't sell digital?"

Underneath all of these discussions about ad insertion is the fact that radio isn't doing a good job at selling their digital inventory. We all know what most broadcasters do- they give it away in order to get the broadcast deal. Then load up the psa's... Then complain about quality.

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What is Cloud Based Ad Insertion?

2-20-2013

While the radio industry continues to struggle with the how to make ad-insertion technology sound professional, companies like Abacast are continuing to innovate and evolve the technology as consumers shift habits to mobile. Abacast CEO Rob Green says Abacast?s cloud-based ad insertion allows radio to target devices such as iPhones without the need for additional client software.

With Abacast's new cloud-based ad insertion, listeners can receive individualized in-stream audio ads. Examples of targeting options include ?all smartphone listeners,? ?all listeners in the top 20 DMAs that are on iPhones,? ?all male listeners in the 25-34 age range in a group of zip codes,? ?all listeners listening on the TuneIn player."

Green says, ?Targeted cloud-based ad insertion technologies will be an imperative driver for broadcaster profitability in online radio as we continue to see consumers using many devices to consume content when and where they choose.?

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Ad Insertion Technology Disappoints Broadcasters

8-24-2012

(by Ed Ryan) A "significant representation" of the radio industry using ad-insertion for their online streams is seriously considering abandoning the technology and replacing it with their over-the-air signals. The announcement that Apple has a patent that may eventually be able to remove ads from a stream may push these groups to decide to make the switch sooner rather than later, but that's not the only reason. Streaming has become a very hot topic among many broadcasters and that is sure to continue at the Radio Show in Dallas next month. Here's what we know about what's being discussed now.

While broadcasters know they need to be everywhere consumers want them to be, losing gobs of money to be there is not something they signed up for. They say when ad-insertion technology is used it degrades the sound of their radio stations, turning off consumers. Streaming has become a very expensive cost of doing business and the reward for doing so has not yet paid off. For most, the fees paid to SoundExchange and the cost of bandwidth alone make streaming a losing proposition. When you tack on the cost of the technology paid out to make ad-insertion a part of a radio station stream, it adds to the financial headache.

All of those expenses add up before local salespeople or a rep firm even pitches a digital package. And, let's face it, in the grand scheme of things, the online listening numbers for an individual station don't even compare to over-the-air broadcasts. Radio's biggest listening numbers still remain in the car, in the home and through a traditional signal. And, as we've written before, until a reliable, easy-to-understand, and easy to pitch ratings system is invented for all of radio, online numbers, for most, are just a guessing game. Radio reps need to be able to easily present a combination of numbers to advertisers and that's what broadcasters are waiting for. "Here's what you get over-the-air. Here's what you get online. Here's the price."

A large number of broadcasters, meeting informally about once every month, has a list of concerns about ad-insertion technology that's pushing them closer and closer to flipping the switch to their over-the-air signal. The transitions are clunky and often the levels do not match when a stopset concludes and the music starts. When stopsets are not filled with paid ads they have to be filled with something. Smokey The Bear has been making a big comeback online. Nothing sounds worse than 7 minutes of Public Service Announcements in a row. And, the revenue is just not there yet. Despite being bullish on digital, and broadcasters touting big revenue percentage increases, that number is still small. At the local level, it's nearly impossible to know for sure if a digital dollar is a real digital dollar or if that dollar would have been spent over-the-air anyway.

Years ago, the issue of running a full stream of programming including commercials had to do with concerns over AFTRA talent fees (Read Broadcast Attorney John Garziglia's Blog on Streaming HERE). That concern seems nearly non-existent today and broadcasters believe they can work that out so their stations sound cleaner online.

(8/24/2012 6:37:41 AM)
Amen! I listen to WABC, New York frequently, and their ad insertion ruins the flow of the format. For a lifelong programmer and engineer, it makes me want to 'tear my ears off'. Its just clunky, and not the quality of one of the biggest stations in the country. And, when they fill with "WABC will be right" with fill-music, thats just awful. Let me hear the local ads. At least it would sound better.

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