RADIO STARTING TO TALK INTERACTIVE

STATIONS SEE PROMOTION VALUE AND NEW REVENUES IN OPENING ONLINE AREAS

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Radio is finally tuning in to interactivity.

After more than a year of watching other media take their first steps into new technology, the radio business is testing the waters.

As others have learned, figuring out how to incorporate advertisers remains a challenge. For now, most in the radio business are concentrating on promoting themselves to listeners by establishing an online presence, either on commercial services or the Internet.

"Radio is uniquely qualified to be a part of multimedia," said Ron Rodrigues, managing editor of trade paper Radio & Records. "It has more finitely targeted audiences. But a lot of [stations] don't know what to do with it other than soliciting feedback from listeners."

It's not that advertisers aren't interested, either. But like other media, radio has to sell itself on interactivity first.

"A number of clients here are very much interested in" advertising on online radio ventures, said Sam Michaelson, VP-senior associate buying director at Saatchi & Saatchi Advertising, New York. "So far, everything is in the idea stage. They have nothing to sell."

But a few stations are beginning to find ways to gain revenues from online offerings.

New York City rock station WHTZ-FM is working on a deal with Sony Corp. to set up Internet sites and online versions of the radio station's on-air shows.

"After sending a million people to other sites we finally decided to get a piece of this," said Steve Kingston, program director. WHTZ has had an e-mail address for a year and gets up to 3,000 messages a week.

The station plans to draw on its audience of 2.5 million a week for the Internet project, estimated to cost up to six figures, said Sam Milkman, assistant program director. Sony will provide Internet expertise and share in project costs.

In addition to Sony, Mr. Kingston said electronics retailer Nobody Beats the Wiz may take part in the deal that will include merchandising and other tie-ins.

Across the country, KMPS-AM/FM in Seattle is preparing to snag advertisers for its own Internet site. The country combo since September has offered its monthly KMPS Magazine on the Internet (http://fine.com/kmps), with an average 6,000 visits per month. Both the print and online versions of the magazine have concert information, new music reviews and station promotions; the Internet site also offered CDs for sale until the fulfillment house went out of business in November.

The station is gearing up to sell the online magazine to advertisers and now has 15 salespeople to peddle various media, including an interactive phone system, direct mail, the print and online magazines as well as traditional on-air spots.

"It starts to become this huge, synergistic creature," said Dean Sakai, integrated marketing specialist at KMPS.

Online ad prices will range from $1,230 for a three-month "page" up to $8,000 for four "pages" over a year. Mr. Sakai expects to sign on catalog companies, florists and other businesses.

KMPS' parent company, EZ Communications, has been working on a bigger and potentially more far-reaching deal.

EZ is experimenting with Microsoft Corp. on "radio on demand," a technology that merges radio with the personal computer. EZ and Microsoft demonstrated the system at the fall National Association of Broadcaster's Radio Show; in December, EZ created a wholly owned subsidiary to build businesses around the convergence of radio and the PC.

Down the coast in San Francisco, radio station duopoly KKSF-FM, playing new age music, and classical KDFC-FM in July started a weekly online newsletter, Inter- Notes (comments@kksf.tbo.com). The service, a version of the stations' quarterly 125,000-circulation MusicNotes, gets 13,000 inquiries a month without much publicity.

Promoting the service to listeners is a delicate task, said Tom Hophensburger, the stations' director of marketing.

"I don't want to overcommercialize it and drive people away from the [print] publication," he said.

Online advertising has so far been limited to value-added packages with current advertisers.

"There is a tremendous amount of potential" for advertiser participation, said Roger Coryell, the newsletters' coordinator and a station announcer. "But many more people need access to the World Wide Web."

Until that happens, industry heavyweight ABC Radio Network is betting on America Online.

ABC Radio in October opened an area on AOL, offering e-mail access to a quiz, an audio library and all the radio network's personalities, such as Paul Harvey.

The initiative is part of a larger effort by Capital Cities/ABC on AOL. Meanwhile, CBS Radio is trying to convince its sister TV network to include it in its Prodigy service.

For radio stations lacking the funds to go online individually, CompuServe offers the chance to participate in its version of talk radio, American Oldies Diner and Talkin' USA.

Talkin' USA opened last month with WOR Radio Network and others as partners.

Frankie Avalon helped launch American Oldies Diner on Dec. 7 by answering online questions. Oldies stations including WGRR-FM in Cincinnati and KHYL-FM in Sacramento, Calif., have signed on, and another 25 are in the process.

Some think radio advertisers will eventually appreciate the one-on-one targeting that interactivity provides.

"Advertisers are going to whoever has the relationship with the consumer in a targeted way, vs. the mass consumer," said Gary Fries, president-CEO of the Radio Advertising Bureau.

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