• by Joe Mandese  @mp_joemandese, February 15, 2012

In a move that will make it easier for agencies to plan, buy, and perhaps most importantly, process new and emerging digital radio advertising platforms, Madison Avenue now has a standard format for coding HD and streaming radio stations it its media-buying systems. The breakthrough, which is being announced this morning by Donovan Data Systems, resolves a key impediment for the rapidly-growing digital radio segment, which forced many agencies to develop their own ad-hoc approaches, or bypass the medium altogether.

While the digital radio situation may not seem as significant as the digital broadcast TV transition that occurred a couple of years ago, in some ways it is much worse, according to Donovan Chief Media Strategist Harvey Kent, because the TV transition was mandated by the Federal Communications Commission and the industry had time to plan and adopt new protocols and procedures for dealing with digital TV stations before they emerged, whereas digital radio options have simply emerged as part of grassroots technological developments and rapid consumer adoption.

In fact, he says, it’s often difficult to even label and categorize some of the new digital radio options, including one of the biggest, Pandora, which still isn’t covered by the new data-processing solution, because it is neither an HD radio station nor a streaming service.

Nonetheless, he says the new digital radio station formatting “schema” will at least get hundreds and potentially thousands of new digital stations and streaming services into the same data-processing, planning, buying, “posting,” and bill paying systems that all the other major media use, including Donovan’s, rival Mediabank, which has agreed to merge with Donovan into a new company called MediaOcean pending regulatory approval, Strata, and Katz.

Those latter two agreements are significant for the radio industry, he says, because Comcast-owned Strata is the major software and systems provider used by agencies and stations to process media-buying “proposals,” and station sales rep Katz is a major provider of the actual invoices that execute those buys.

The big breakthrough, Kent says, was essentially to standardized the “call letters” of digital radio stations and streaming services to that they could be easily inputted and trafficked throughout the myriad of planning, buying and processing systems used by agencies to buy radio and other media.

Importantly, Kent says the schema will also enable agencies to immediately access audience estimates for the digital radio outlets from Arbitron and various streaming radio audience measurement firms that now compete with the radio ratings giant, which itself is claiming some new improvements in the measurement of the medium (see related story in today’s MediaDailyNews).

Kent says it may be difficult to project what the economic impact of the breakthrough is for radio ad spending, because digital is a growing factor for the industry, but he said it removes a major obstacle, and it also reduces the “workflow” associated with agencies planning and buying digital radio.

“I think it will have a major impact,” he speculates, because, “before, unless an HD station was put on a ‘must-buy’ list, it probably didn’t get on the plan.”