Questions re Part 15 Advertising

A few of our part 15 stations have done ad placement on their stations or at least on their station's website.

Rich Powers at End 80 Radio, Ken Norris at Friday Harbor Tiny Radio, maybe Tim in Bovey... I think there are more.

I've been selling ads since I went on the air a year and a half ago.  If you know my station at all, you know I cover the entire towns of Bovey and Coleraine Minnesota, two very tiny towns up in Northern Minnesota. Each small town has a small downtown area with businesses.  If your business is in these two towns I run ads for them for free.  No strings attached, no BS.  They're free, and up to 60 seconds long.  So this includes businesses like an antique mall, coffee shop, a bar, a grocery store a gas station, a body shop, a mechanics shop, and a few others. As we've lived here for 18 years I know pretty much all the business people and encourage them to have spots on the air, and when ever possible I stop by their business with a handheld digital recorder, and have THEM record their ad, and I take it to the studio and mix it with music, etc. This makes their ads stand out more AND they wind up with people stoping in and saying "Hey, I heard you on the radio" which is good PR.  I also do local PSA's that run as commercials -- e.g. winter parking notices, free concerts, fundraisers, school events, etc. I consider the free ads and local announcements to be part of the programming, and it is this addition to the programming that I believe endears the community to the station, and actually makes it an actual service to the community.

If someone wants to be on the air and they are not in the actual over the air coverage area they can buy ads, and I charge 30 cents each.  Which means $30 gets a hundred ads.  I also sell ads to far off businesses via the internet -- I've been able to build some consistent advertisers through my connections in commercial broadcasting.  So I have a few businesses from over in Grand Rapids (the nearest "big" city, about 12,000 people) that buy ads, along with a lot of internet based businesses, etc.  I generally generate $1000 to $1400 a month.  I quickly covered my cost in start up equipment, pay rent for a storefront office on main street and cover all expenses, and am enabled to have the station, as a business help sponsor local events.  I'm actually considering bringing a live concert to town this year -- great PR and fun for the residents. 

Now, people will think at first that that is a heck of a lot of ads. I don't know exactly howmany spots I run per day, as my programming is setup in a rotation of a mix of songs, then a mix of spots/psa/announccements and station promos, then another mix of songs, etc.  I would guess about 6 breaks in an hour, each break with three or four items in it.  Th enumber of PSA's and station promo spots is reduced when the number of paid ads or local business ads goes up. Now, remember the old rule (many years ago) limited broadcasters (commercial) to 18 minutes of ads an hour, which is 36 spots, and even at 30 cents a spot that would have been $10.80 an hour. times 24 hours in a day that's almost $260 per day!  I probably do about 18 paid for spots in an hour, but I run them in the overnight hours for FREE as reception is so bad with interference at night (although I'm clear as a bell on the cable TV system).  But whip out your calculator and do a bit of math.  So if someone buys 4 spots a day they get one 6-9 AM, noon hour, 3-6 PM and one that floats in somewhere else during the day, then they get probably 3-4 more than drop in overnight that I don't count. 

I do have a sponsor for my FSN news that runs adjacent to the news several hours of the day time for which he pays $20 a month that covers the $15 a month fee for the news and leaves me an extra $5. 

I let outside people pay for the ads so I can provide the community service to the local people. 

Scary thing is -- I'm starting to give serious thought to starting a second station!

I don't remember if I addresses all your questions -- but feel free to ask.

Tim in Bovey

Thanks a lot, Tim.  That pretty much covers everything.  I was just wondering if you can confirm how long your ads were - are they all the same length, or a mixture (i.e., 15, 30 or 60 seconds)?  I can infer that they are each 30 seconds from your math example.

I was also wondering if you bill up front, or at the end of each month after the ads have run?  I would probably do the latter, once the actual number of ads that were run is confirmed from station logs.

I've been thinking of going with a similar model to yours.  My new station will be located in a small village area within a much larger community (Pitt Meadows).  There is a main street with businesses, and a fairly dense built-up area with townhouses, duplexes and single family homes.  A Canadian-legal Part 15 FM signal should be able to easily cover the entire area on a car radio, and I'm hoping that it will cover a majority of home-based radios as well (it really is a small community).  I might consider using AM if it doesn't (I just need to cover a couple of blocks in each direction to hit the townhouses and duplexes, another few blocks in just one direction for the single homes).

I was considering giving deep discounts to local businesses and for overnight spots, but free might be the better way to go.  I also like your sponsorship model for the FSN news.

My costs here in Canada will be different than yours.  Music licensing is a percentage of total revenue generated, with a minimum fee.  Currently, since I have no revenue, I pay the minimum.  But if the advertising dollars start rolling in, that cost will escalate.

Finally, did you do up a rate card for everyone, or just for paying businesses?

I simplify a lot.  My spots are the same price for anywhere between 30 and 60 seconds. A lot of the small agency stuff I run that I sell from outside the market are odd lenghts, :38 :45 etc. The local business ads are free, and are all also 30-60.  I try to do 30 seconds, but if they run a bit long, I simply don't care.  They generally get a bit long with the store owner recording them themselves, but that's OK, as having them on the air generates talk in town which is great PR and gets them comments which is more great PR. So, for local folks, they're free and I shoot for 30-60.  For the out of towners and "national" advertisers they're 30 cents a piece and can go up to 60 seconds as well.  Every now and then I do an online special where the national folks can get 40 spots for $10 which makes them .25 each. 

I don't do any billing.  If you buy ads, you pay at the time I start them. My internet and agency stuff comes with either the finished spot ready to air included with a Paypal payment (Oh, and the national and agency stuff I charge them $5 to produce the spot for them -- there is no charge for production if they send a ready to go audio file) and again, it's paid for with the order.  The people in the area (but outside of my coverage) also pay at the time they order. If they buy a hundred ads, they give me $30.  Sometimes it's cash, sometimes it's a check, heck I've even been known to take store credit 🙂  Billing is just one detail I don't want to mess with.  I get the schedule from them then as well, like 4 ads a day for ten days, etc. And of course in the overnights bonus spots run for free.  in a year and a half I've only had one client (a national one) who wanted a schedule of when his ads played -- which was no problem as my software lets my bring up a track name and print out a nifty grid showing what days it played and in which hours. 

I've never had rate cards. For the locals I have business cards printed up at Vista Print (cheap) that have station info, website, phone, email, etc and a line that says ads are FREE if you're in Bovey or Coleraine, contact me to get on the air. The 30 cent ads are offered on my website and through the agencies I'm working with. As for the folks over in the "big town" that buy ads -- I let them come to me.  I don't actively seek their business.  But it's interesting that I've developed a few regular advertisers from "over there" just from people who know what I'm doing, think it's neat, and can't pass up 30 cents a spot compared to $15.00 a spot at the commercial station I work for!

Hope that helps.

Tim in Bovey

It does.  Thanks a lot.  Good info.