The MusicBooth Scores $2.3 Million to Offer Banner Ad Alternative

Placing bets that banner ads are ineffective, if not post mortem, New Rochelle-based advertising service The MusicBooth has secured $2.3 million to offer users a familiar ad medium, pure audio. California-based Prime Ventures led the funding.

The idea behind Internet radio advertising is pretty basic — replicate the same type of experience that listeners have come to expect over the airwaves. That’s why former attorney Robert Wolfe, the founder and president of the MusicBooth, began forging partnerships with advertising companies in an effort to provide something more compelling than the typical banner ad.

“A part of what happened in the early 90’s was a perception that there was going to be a problem with banner ads. They definitely had a place, but most people thought they would fade,” he said.

In an interview with atNewYork, this morning, Wolfe said that some advertisers have shied away from doing business on the Web, and instead are seeking new ways to sell their wares and inform customers about product offerings. That desire for more compelling Internet ads is what’s driving the growth of streaming media efforts, with market leaders like DoubleClick, Engage, and ACTV offering such ad insertion services and competing with the MusicBooth.

“Advertising models existent in 1996 did not have the impact that advertisers were looking for,” said Wolfe. “There’s a tremendous need for a vehicle that gets the message to the right target audience with a methodology that is inoffensive (not annoying) to a listener. The radio model is the best way — it’s not jarring.”

Using anonymous information — such as a user’s location, gender, age, and marital status — the company allows advertisers to target an audio ad to a particular individual (or particular browser, at least). And unlike banner ads, targeted streaming audio messages don’t necessarily zap a user to another site.

Wolfe said his team of 14 works with broadcasters and Webcasters who put audio content on the Internet — either talk radio, music and/or streaming audio. When it’s time for a commercial break, the team inserts an ad message. An unnamed strategic partner in California provides the MusicBooth with the anonymous profile data the company deploys to its clients and roughly 80 million listeners — a number Wolf said continues to grow by two million a week.

The realization that banner ads were a flawed advertising medium didn’t happen overnight, and Wolf said he intends to keep a watchful eye on the effectiveness of personalized audio ads.

“We (have already started) measuring the success through a series of tests and while it is intuitively accepted by the industry that audio advertising works, because we’ve all experienced the impact through radio,” he said, “we will work with several different companies to do a formal test for the Internet that’s audited by outsiders.”

Wolfe declined to list the names of the companies it is working with to guarantee ad effectiveness.

So far, The MusicBooth has formed relationships with Interep, an independent sales and marketing company specializing in radio, the Internet and new media; UUNET, a MCI WorldCom company that offers Internet communications services; and Excite At Home’s, MatchLogic unit.

MusicBooth’s board of directors includes Burt Manning, chairman emeritus and former chairman and CEO of J. Walter Thompson Worldwide, and Chris Jackson, principal of Cramer Rosenthal McGlynn, LLC.

In the past, Prime Ventures has invested in companies including The Brain.com, GreatDomains.com, DedicationChannel Inc., Dolphin Search, Buzztone, AdAce, CelebSites,Inc., Infantelligence, and Wirestone.

Christine Gordon is a senior editor with atNewYork.com, an internet.com publication.

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