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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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