A Push to Standardize Radio Ad Insertions

In a deal that aims to solve some of the problems facing terrestrial radio stations using Webcasts, iM Networks Inc. in Mountain View, Calif. has signed an alliance agreement with Alexandria, Va.-based Lightningcast Inc. for ad-insertion technology integration and advertising sales representation.

iM works with both radio stations and consumer electronics companies, with the goal of creating audio components that can play Internet radio stations. It has also developed the iM IT ad-insertion solution. Lightningcast’s technology automates streaming video and audio ad insertions.

The companies said the joint effort will allow terrestrial radio and Internet-only stations to use a single unified and standardized method of setting up their ad-insertion systems and for reporting tracking data to ad agencies. Financial terms of the agreement were not disclosed.

The issue of monetizing the streaming sites of terrestrial radio stations has been a major hot-button issue as of late, since Clear Channel Communications’ Internet unit decided to pull the plug — at least temporarily — on the Webcasts of its radio stations’ programming. The reason? Advertisers had agreed with the actors’ union, AFTRA, that actors whose voices appear in audio spots get 300 percent of their normal fee if radio stations play their ads on the Internet as well as on the radio. That’s a big problem for radio stations, which currently aren’t making very much extra money, if any, from the Webcasts.

Although Clear Channel has, for now, silenced its stations, there are two potential solutions. One is for stations to make enough money from the Webcasts to cover the costs. The other is to strip out and replace the advertisements that include AFTRA actors. The iM Networks and Lightningcast technology is designed to do both.

“Every new stream costs money, both in bandwidth and fees from agencies like RIAA and AFTRA,” said Scott Smith, chief executive officer if iM. “iM IT monetizes each new listener at a profit so all parties can get paid. If terrestrial stations want to stripe over AFTRA loaded spots in their online broadcast, we can help them do it.”

As the two companies envision it, the key ad serving infrastructure components will be standardized, creating a de facto standard for ad insertion. Because both companies have approached ad insertion as a server-based service, the collaboration provides a scaleable, targeted ad insertion solution, which allows radio stations to insert advertising flags with minimal additional software, the firms said.

“iM Networks and Lightningcast are standardizing our front ends so that ads can be served into both networks seamlessly, and so both companies are able to offer advertisers access to virtually any lifestyle demographic they wish to reach,” said Smith.

Lightningcast’s technology enables advertisers to target individuals and specific audience groups based on network affiliate, music preference, geographic location, age and gender.

Additionally, iM Networks will partner with Lightningcast for the services of its sales team.