AOL/CBS Radio Pact a 'Merger of Equals'

At New York Radio Forum, Panelists Don't Address Deal, but Attendees Do

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NEW YORK (AdAge.com) -- Last week's late-breaking news that CBS Radio would power ad sales for AOL Radio's streaming audio network was perhaps the most significant web deal yet for terrestrial radio. Yet no one would have gotten that impression at today's New York Radio Forum, titled "Unleash Your Audio Strategy."
Radio Advertising Bureau president-CEO Jeff Haley
Radio Advertising Bureau president-CEO Jeff Haley

The major radio industry event, hosted by the Radio Advertising Bureau and the Advertising Club, fell just days after AOL and CBS unveiled their plan -- but three panels that all touched on radio's new platform-agnostic approach to content and ad sales failed to mention it.

'Missed opportunity'
One key radio sales executive who helped organize the event dubbed the lack of discussion around the deal's implications a "missed opportunity." Instead, a morning panel discussion focused largely on years-old topics like how radio fits into a marketer's overall media plan and the importance of finding the next creative breakthrough akin to Anheuser-Busch's "Real Men of Genius," which has been around since 1999. The executive said Rich Lobel, exec VP of CBS Radio's altitude group and the most appropriate CBS exec to address the deal, was unable to attend the event.

CBS was instead represented by Mike Aronow, VP-sales development for CBS Radio Digital Media Group, who spoke on behalf of CBS Riot (Radio Internet Outdoor and Television), an ad sales unit that focuses on four-pronged multiplatform deals for advertisers that launched last year. Mr. Aronow presented several case studies on recent Riot deals, including one with Dodge Ram that increased sales by 118% during the month of its multiplatform campaign, but did not address the recent expansion of the radio group.

Outside of the panels, however, the chatter was focused on radio's first major opportunity in streaming radio, combining AOL's 200 online stations with CBS' own online streams of more than 150 radio stations and custom channels. "We are past the age of single distributors," said Jeff Haley, president-CEO of the Radio Advertising Bureau. "AOL has always been an aggregator of content, and CBS is completely committed to multichannel programming. We're going to see great audio content delivered across multiple channels and more ways to touch the consumer."

The AOL/CBS deal, which is expected to be finalized in mid-May, was also dubbed a "merger of equals" by Eric Ronning, managing partner of Ronning Lipset Radio, an online radio rep firm that has handled AOL Radio's streaming ad inventory for the last four years and will continue to power the new CBS/AOL player.

"These are two divergent cultures and backgrounds. Each has an equal knowledge and both have something the other needs," he said. "Now they've come to the decision that here's this terrestrial radio that's responsible for touching this person, it's the source of local media. AOL is respecting that and saying, 'You understand local, we understand the online space. We have the technology needs to blend it, and you have the marketing value by taking this many people and bringing them to our network.'"

Players new focus
The AOL Radio player, currently operated by AOL and Yahoo, is expected to be operated under the CBS Radio group once the terms of the deal are finalized. The new player will come equipped with features to allow consumers to toggle between stations, access artist and album information and purchase individual songs, albums and concerts tickets as well as provide a variety of social-networking features.

Mr. Ronning said the player's focus on visual media as well as audio content will help make the streaming audio market more attractive to advertisers, who still ultimately seek visual components to a media buy, much the way they buy other targeted media. "It has the value and ability to do what cable TV does, which is present to an advertiser a variety of visual capabilities. Just like cable TV appeals to a local car dealer, those same people can understand the value of local radio."
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