Absolute Radio InStream Works for AdsWizz, VW and Microsoft

September 6, 2012

Let's face it, online audio streaming has become an absolute necessity to stay competitive for every professional radio broadcaster on the market these days. It's no secret that radio broadcasters aren't thrilled about seeing their terrestrial audience shift to the Web due to the expensive royalty costs associated with streaming online.

The National Association of Broadcasters has done a brilliant job of ensuring that radio broadcasters need not empty their pockets for royalty costs over the air. However, online performance royalty costs continue to be an extreme pain point in the online radio streaming arena, to the point where many radio broadcasters are bleeding dollars verses raking it in.

In 2012, stations are paying a rate of $0.0021 per listener who hears at least 30 seconds of a song via their online sources - this rate will actually go up to $0.0023 by 2015. Although this number may sound quite small, the reality is that if say a station has 1,000 listeners online around the clock and they play 12 songs per hour, their total monthly royalty fee will be around $18,748.80. The higher the listenership the greater the fee.

As with the Internet in general, ad dollars are of course considered to be the answer to offset royalty costs. However, the streaming radio industry continues to remain both jaded and skeptical as to whether advertising will truly offset these costs. If one chats with 10 radio broadcasters across the U.S. and Canada, the majority will still tell you they are not striking gold yet through online advertising.

One-Size-Fits-All Ads Don't Wow Online Radio Consumers

A significant stumbling block in online radio advertising is the fact that the broadcast experience is a "shared" one between listeners. Besides players such as Pandora or Spotify who excel at one-to-one broadcast, most radio broadcasting is served up to consumers in a one-to-many fashion. As a result, typically the ads streamed to these consumers are not customized enough to appeal to the individual's interests. However, one company that seems to have solved this issue quite well is AdsWizz, a San Francisco-based digital advertising solutions provider.

The folks at AdsWizz believe that the only way broadcasters and advertisers will truly monetize their streams is if they learn the exact demographic profile of their listeners and then leverage that information to make sure each end-user only receives the ads that truly appeal to their likes and needs. In addition, in this media-obsessed era, advertisers and broadcasters need to deliver different formats including audio, video and display that keep consumers constantly engaged.

As a result of this thinking, AdsWizz has created the Digital Advertising Monetization Platform. The breakout ingredient in this platform is their clever, revenue-generating technology tool, "Targeted Ad Insertion," a system that enables CDNs (content delivery networks), ad networks and online audio publishers to unleash the power of one-to-one marketing by allowing them to insert ads directly into each individual end-user stream and ensure the ad specifically speaks to the individual end-user interests. In addition, to keep consumers constantly engaged AdsWizz offers ads in combined audio, video and display formats.

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"We truly understand the pain points traditional radio broadcasters experience due to the constant uphill battle of losing revenue dollars to performance royalties," said Alexis van de Wyer, president of AdsWizz. "To promise broadcasters digital advertising will completely fix this problem would be an unfair statement to make. However, with that said we can certainly say companies like AdsWizz are definitely alleviating a lot of that pain by creating real revenue streams through smart technologies such as targeted ad insertion. In fact, Absolute Radio is a great example of a broadcaster that has implemented the technology this year and is already beginning to reap the benefits as a result."

VW, Microsoft and Absolute Radio InStream Ads Service

In December 2011, Absolute Radio - one of the UK's three independent national radio stations that is adored by loyal listeners across the globe - tapped into AdsWizz to provide the technology to power its radio station's InStream Ads Service.

Lead applications specialist at Absolute Radio Ben Matthew explained: "We have spent a long time trying to find the right technology to implement our innovative ideas around targeted advertising and we found that the flexibility that Adswizz's technology offered us was unparalleled in the market. We have been able to successful adapt their platform to suit our specific needs and create an online radio experience that isn't just appealing to advertisers but sounds superb to our listeners."

Absolute Radio's InStream Ads Service offers improved ad targeting to a logged-in listenership through full view gender, demographic and active location-based data. This groundbreaking service enhances the radio experience by merging opt-in privacy data with live online streaming and puts Absolute Radio at the forefront of digital innovation in the sector with the station setting out to redefine radio.

Absolute Radio is capturing the age, gender and active location of the station's users and had revealed at the start of the program that 80 percent of its InStream logged-in audiences at the time were within the station's core demographic of 25-54, with 65 percent of users being male. Users are being incentivized to share data by being offered a series of benefits including HQ audio streams, more music and more relevant commercial messages.

Absolute Radio In Stream - using newly available technology - offers listeners via IP the opportunity to receive a better quality, contextual, visualized radio experience that's more relevant to them, while advertisers gain an intimate level of access to their core audience. It combines the engaging entertainment of broadcast radio with the one-to-one commercial benefits of streaming music services such as Spotify and Pandora.

Immediately after the launch, Absolute Radio claimed more than 176,000 people had signed up to its Absolute Radio account and, in return for providing Absolute Radio with their details, they have and continue to receive targeted advertising and special benefits. Absolute Radio releases monthly information to provide greater accountability for commercial partners. Monthly figures for the network are available from the One Golden Square blog.

From heavy-weight advertisers to industry award givers, the industry as a whole is taking note of Absolute Radio and AdsWizz's InStream Advertising breakthrough. Based on initial success, Volkswagen and Microsoft's cloud-based software Office 365 were the first advertisers to sign up and use Absolute Radio's targeted InStream advertising. The Microsoft Office 365 ad was made by Weborama, with media planning and buying by Universal McCann. The VW ad was made by Tribal DDB, with media planning and buying by MediaCom.

StreamOn, a leading radio streaming provider in the U.S. and Canadian markets, understands first-hand the pain points of their broadcasting customers as they themselves are third-generation radio broadcasters. Speaking to these guys after five minutes, it is clear they are trailblazers who are working around the clock to create products that will truly enable their broadcast customers to monetize streams. Roger Charest, CEO of StreamOn, said, "Can advertising completely offset the extremely expensive performance royalty costs associated with online streaming? Nope! However the industry as a whole, needs to quickly come up with practical and smart ways to monetize broadcasters' streams otherwise in the next couple of years many of these very much loved stations will disappear."

Bottom line - will advertising offset royalty pain points? Only time will tell and in the meantime guys like Absolute Radio, StreamOn and AdsWizz seem to be making for damn sure they do whatever they can to create real revenue streams for broadcasters online.

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