• by Erik Sass  @eriksass1, February 22, 2006

The terrestrial radio industry's so-called HD Radio Alliance Tuesday unveiled plans for a $200 million ad campaign to promote the new terrestrial-based digital radio broadcasting technology to U.S. radio listeners. Ads will air on 250 stations in 28 markets where 12 major industry players in the alliance have already introduced HD radio service.

Peter Ferrara, president and CEO of the HD Digital Radio Alliance, pointed to broad support from "from receiver manufacturers, retailers and automakers," whose cooperation is crucial to the roll-out of the new product.

Of course, the success of the new medium also requires the cooperation of consumers, who have to be convinced to spend money on new digital radios, either as stand-alone sets or as optional features in new cars. Thus the new ads tout manufacturers and retailers who are selling the new sets--an interesting situation in which radio station owners are spending money to promote other industries. The Alliance has positioned this free advertising as an incentive for retailers and carmakers who agree to early adoption of HD radio technology.

One early winner of free ad money is Boston Acoustics, which the Alliance is recognizing for lowering the cost of its basic entry-level digital radio receiver to $299--the first in a series of hoped-for price reductions that will bring the radios in the buying range of ordinary consumers. Bob Struble, president and CEO of HD iBiquity, which is the sole proprietor of HD radio technology, has forecast HD radios costing less than $100 in the near future.

The major ad spending from the HD Radio Alliance seems to be part of a larger trend from industry associations of established media players seeking to get word out about new developments in technology or business models, as well as touting their advertising clout in the face of Internet competition.