TargetSpot: Online Radio ‘Agency’

(Via John Battelle) TargetSpot is a relatively new “streaming media marketplace” (and “ad agency”) that offers self service ad-creation tools across a variety of formats: banners, video, audio, text. All ads currently will appear in the context of online radio programming. Targeting is available by demographic segment and at the zip-code level. CBS Radio is the first major customer.

Here’s the NY Times’ coverage:

TargetSpot is planning a service that will let advertisers of any size — from a local restaurant to a national chain — create commercials for their desired audience and buy ads that will be slipped into online radio programming. The service, which CBS Radio in part financed, will debut June 28.

Most radio stations, including the ones owned by CBS, stream their content onto the Internet, but some ads must be stripped out first for legal reasons (for instance, if there is no arrangement to pay for the rights of on-air talent, writers and producers). With fewer commercials on Internet radio than on traditional broadcast stations, TargetSpot sees an opportunity.

Users aren’t going to pay to subscribe to online radio, which must now offer big royalty payments to copyright owners and so is going to need ads to subsidize online audio/podcasts (especially independents). As the Times excerpt states, broadcasters also need ads around their programming.

Larger advertisers and agencies will adopt this approach as another way to reach audiences. But just as with conventional online advertising, local businesses aren’t going to do this without help. Yet TargetSpots is likely to become another source of “inventory” that SEMs and other third party aggregators can tap to deliver traffic/leads to local businesses.