In the United States, radio commercial revenues are generated by selling time to be utilized for running radio advertising. This occurs when a company or an individual purchases airtime from a radio station to have it advertised on their airwaves. When these ads are run, listeners are often instructed to listen to the advertisement and then buy a product or service related to what is being promoted. Most likely, people will not purchase anything more than the ad they initially hear because they are interested in what is being promoted. After listening, if they decide that this commercial is worth listening to, they will likely make a purchase.
Commercials Are Very Similar To Television Advertisements
But there are two main differences. In television, an individual chooses what program they want to view based solely upon what they want to see. With radio, a station can choose to run any type of advertisement that they feel will be appealing to a specific demographic. The only factors that really stop a station from running a specific advertisement are regulations that pertain to their air space and the audience that they wish to reach.
Most people listen to the radio during their leisure time, so radio commercials are often targeted towards a specific audience. For example, some people may only listen to Howard Stern, talk show hosts, and sportscasters. If an advertiser wants to create commercials for these listeners, they would need to target advertisements towards people who fall under their demographic. Since many listeners are not exposed to all types of programming, they would not be prime candidates for a particular radio station to run radio ads. As a result, most advertisers target markets that they know will be interested in their advertisements dy-namic.
When A Radio Station Runs Radio Advertising
They do not always advertise directly to the public. Instead, many times, they will work with other stations or even be affiliated with them. A great example of this is Jock radio advertising. Jock is a channel that airs mostly sports talk programming geared towards male listeners. Because of this affiliation, when Jock radio shows do commercials, they are often featured on multiple stations, which means that a listener could hear it on a few different stations, rather than just one.
Another way that radio advertising is done is by using a company that is known as a "casting house." These companies are large enough that they can afford to purchase space on numerous broadcasting stations, and they will then be the ones that will air your radio advertisements, whether you are directly advertising or have an affiliation with a casting house. Many smaller companies will only advertise themselves on local stations, but these types of companies are usually very familiar with their local markets.
After A Company Buys Radio Station Airtime
They will go on the air with their own advertisements or they will acquire the right to use someone else's adverts. In either case, they will need to acquire broadcasting licenses from their local radio station to ensure that they are abiding by all regulations set out by the FCC (Federal Communication Commission). As mentioned earlier, there are two different types of radio stations: conventional radio stations and satellite radio stations. Generally speaking, there are fewer television stations that broadcast on AM and FM frequencies that are received by satellite radio subscribers. This is because the FCC doesn't regulate broadcast content, so it is up to the station to choose which content it wishes to feature on their airwaves, or not.
Once a Radio Station Is Established
It can either be sold off to a new company or it can be sold to another broadcasting station. If it is being sold off, it is usually done at a discounted price in exchange for the right to use the radio station's airwaves. In some cases, the existing company will create a new identity for itself and will then buy the old broadcasting station for a fraction of its original cost. The station will then be closed down and all of the advertisers and employees that worked there will be moved to another station owned by the same company. Satellite broadcasting stations are not as common as conventional radio stations because of this issue. Even though there is less competition for advertising dollars, there is still quite a bit of potential for growth due to the fact that people want to stay in touch with local programming.
Creation of Radio Stations Has Proven To Be a Successful
Venture for companies as they have proven to be very effective means of promoting their product, service, or message. However, there have been a few cases of radio stations becoming a money-losing venture, mostly due to the high rates they charge their customers. Radio advertising agencies have recognized this and have worked hard to keep radio stations profitable in order to keep their clients. Radio Commercials is one area where advertising agencies have made great strides in recent years.