A Bright Spot: Clear Channel's Online Division Takes Off

It's true that radio groups have failed--for the most part--to build substantial revenues from online operations, but there are some major exceptions to that sweeping statement: foremost, Clear Channel Radio's online division is making strides in increasing its audience and the time spent interacting with its Web sites.

The big radio group remains as cagey as ever about financial details, but several outside observers with extensive knowledge of the online radio marketplace said Clear Channel's Web revenues are probably on track to reach $70-$80 million by the end of the year.

While declining to discuss revenue figures, Evan Harrison--the president of Clear Channel Radio's online division--did confirm that the online operations have posted about 20% year-over-year growth thus far in 2008, adding that August was their biggest revenue month in history. That bucks the trend for the radio industry in general, which suffered a sudden turnaround in "off-air" revenues--including online--in the third quarter of 2008, according to the Radio Advertising Bureau.

Clear Channel has a couple of obvious advantages, including the sheer scale of its Web presence, which includes over 900 station Web sites. However, it has also aggressively pursued a multimedia strategy that includes a variety of online video content, streaming audio, and on-demand options as well. Harrison said its on-demand offerings have generated about 500 million on-demand plays this year alone--all monetized through ad support, like the rest of its Internet content.

The broadcaster has also in effect created a new Web-based daypart allowing advertisers to target workers who visit Clear Channel station Web sites during the workday. Programming and advertising during this work daypart are coordinated with drive-time content and advertising, which gives advertisers the option of reaching the listener with messages repeatedly, via different channels, over the course of the day. In this vein, Harrison said Clear Channel's new national Web site, Iheartradio.com, is now the most popular free media application on the new iPhone, and the seventh-most-popular app overall.

Harrison added that third-party research from the Radio Advertising Effectiveness Lab showed a big bump in ad recall when consumers were reached via broadcast radio airplay and online radio in combination: according to RAEL, ad recall more than doubled from 7% to 16% when the two media were used in tandem. The appeal of the double play, in fact, is such that Clear Channel's online business is now generating leads for the broadcast side, in addition to vice versa.

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