Public radio stations face the same dilemma: increase revenue or cut expenses to survive. It is no surprise that increasing revenue is the more elusive challenge, especially on the underwriting front. All traditional media advertising revenue is in decline as ad dollars are splintered in many new digital directions.

The good news for public radio is that one of the new digital directions with significant dollars being spent – the selling of unsold streaming and podcast inventory – is already flowing new revenue in what could be termed “mailbox money.” Pre-recission, it was easier for public radio stations to ignore its unsold digital revenue. Now, the automated selling of unsold digital inventory through programmatic advertising is delivering five figure income to the early takers.

Case Study: WBGO New York

WBGO in New York is one such case study. Faced with tough financial decisions, President/CEO Steve Williams challenged his team to cautiously consider whether programmatic advertising revenue was a viable new revenue stream for New York’s public radio Jazz station. Ultimately, the answer was, “yes,” and the station is on track to sell over $40,000 in programmatic digital ads this year. That’s 100% new digital revenue – every day, week, and month of the year – and without selling expenses.

During last week’s second installment of Paragon’s webinar series, “The New Sound of Sustaining Public Radio,” WBGO shared their decision-making process, the technical tweaks required to maximize revenue, and how they managed audience expectations along the way. Two other panelists included Jeff Schick, CEO and CTO of Sprite Media and a consultant for WBGO, and John Morris, Chief Product Officer at SoundStack, a company providing hosting, monetization, and technology for broadcasters and podcasters.

You can watch the recording of “Inside WBGO’s Programmatic Revenue Launch” here.

Topics covered included:

  • Why WBGO decided to pursue programmatic advertising revenue
  • The pros and cons and decision-making process
  • Technical setup and implementation
  • Communicating with your audience
  • Launch experience
  • Audience feedback and WBGO response
  • Revenue results and trends
  • Adjustments made over time
  • Technical and sales recommendations for stations considering the leap

WBGO’s Programmatic Advertising Results

  • WBGO is on track to earn approximately $40,000 in revenue from programmatic advertising since its launch at the end of October.
  • This initial revenue exceeded their projections for the first year.
  • Revenue growth was a gradual ramp-up, starting with a small “trickle” and increasing incrementally to a peak of approximately $4,300 in one month, now stabilizing at $3,000 to $4,000 per month.
  • The station plans to expand programmatic ads to podcast pre-rolls and a new on-demand initiative.

WBGO’s Decision-Making Process

  • A primary motivator was the loss of $400,000 in funding from the Corporation for Public Broadcasting. WBGO needed to find a new revenue source.
  • As a non-commercial public media station, the decision to introduce ads was counterintuitive and required addressing skepticism from the audience, staff, and board.
  • After deciding to proceed, selecting the right partner was crucial. WBGO chose SoundStack, who has been instrumental in the process.

Initial Rollout and Managing Listener Feedback

  • The team prepared for listener backlash by simulating reactions and creating a comprehensive communication plan.
  • The new content was introduced over a weekend during a peak listening time without prior notice to gauge the response. A communication plan was activated upon the first listener response.
  • A personalized three-paragraph letter, signed by CEO Williams, was sent to every listener who provided feedback, explaining the what, why, and expected outcomes.
  • The team received fewer than twenty responses, much lower than anticipated. Most follow-up responses showed understanding after the explanation.

Programmatic Ad Implementation and Clock Structure

  • Core programming content was not impacted; the flow clock structure was recalibrated to accommodate programmatic ads.
  • An “add insert” marker in the automation system, signaled by metadata, cues the programmatic ads to play over the stream.
  • For over-the-air listeners, broadcast content (like promos, fundraising messages, or short-duration songs) must fill the ad space.
  • The station is also creating interstitial content from social media clips to add dynamic audio and promote social channels.

Technical Setup and Ad Quality Control

  • When the automation cues an ad, it connects to SoundStack’s ad server. If no ad is available, a promo plays.
  • SoundStack’s platform adjusts for ad breaks that are slightly longer or shorter than the target duration and uses technology that analyzes audio waveforms to ensure tight, seamless transitions.
  • A key feature was the ad filtering process, allowing the station to exclude undesirable categories (e.g., gambling, political) to align with the public radio aesthetic.
  • The platform also offers geo-located ads, serving relevant ads to listeners in different geographical areas.

Onboarding Process and Marketplace Dynamics

  • The process begins with a technical evaluation to determine the monetization strategy, followed by establishing business rules like category exclusions.
  • The SoundStack marketplace team then connects the station’s inventory to demand partners. The system is scalable and values the audience, not just market size.
  • The ratio of programmatic ads to local underwriting is generally equal in time (e.g., two minutes each).
  • Local sales can be managed and prioritized within SoundStack Monetize alongside programmatic channels.
  • The station is exploring direct sales and insertions for the stream, which could double the CPM compared to programmatic ads.

Post-Launch Support and Adjustments

  • SoundStack provided extensive post-launch support with a large team monitoring analytics, fill rates, and CPMs to make real-time adjustments.
  • The team actively listened to the stream to identify and fix issues, such as misaligned metadata markers causing audio bleed-over.
  • An incorrect internal adjustment to the ad insertion queue caused weekly revenue to drop from thousands to just $90. The issue was identified through listening checks and resolved by contacting SoundStack support.

Team Reaction to Programmatic Advertising

  • The reaction from the local underwriting team was mixed. Some viewed it as competition, which had to be managed.
  • The initiative was framed as an opportunity for the sales team to approach clients with previous copy concerns, using the strength of streaming numbers to counter perceptions of lower value compared to broadcast.
  • Proactive communication with the sales team is key to gaining their support.

Business Model and Pricing

  • SoundStack operates on a revenue share model, typically a 70/30 split (station/SoundStack), with no additional transaction, delivery, or storage fees.
  • They operate their own bare-metal infrastructure, allowing for lower operational costs.
  • There is no minimum market size or revenue requirement, as long as expectations are realistic for the audience size.

Recommendations for Implementing Programmatic Ads

  • Technical (Jeff Schick’s Recommendation): Prioritize the listener experience by ensuring ad inserts sound good and avoid repetitive ads.
  • Planning (Steve Williams’ Recommendation): Plan thoroughly, observe how others are doing it, and learn from their experiences before launching.
  • Adaptability (John Morris’ Recommendation): Be willing to make adjustments post-launch and use your network for help, recognizing every station is different.

The third installment of this webinar series will be held in August and will flip the script to cover the advertisers’ and buyers’ perspectives of public radio programmatic advertising.

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