Product Placement and Radio

¶ … 1923, in a letter to the editor of the New York Times, Gernsback wrote, "If the future of radio rests upon a foundation of advertising, it would be better that broadcasting did not exist at all." As much as radio advertisements bothered listeners, and continue to do so, advertising has been integral to radio's success. In the early days of radio at the beginning of the 20th century, "most radio stations were owned by businessmen, who used their stations to promote their own businesses," ("Advertising and Broadcasting go Hand in Hand"). In the 1920s, AT&T developed the model known as "toll broadcasting," which set the standard for all radio since then ("Advertising and Broadcasting go Hand in Hand"). By 1930, almost all (90%) of the radio stations in the United States broadcasted using the "toll" model, where operational costs were defrayed by selling advertisements. This "changed the way broadcast was economically structured," according to Mcdonogh (2012). The stations themselves were no longer owned by single businesses to promote themselves, but by telecommunications companies that charge fees to advertisers to defray costs. Indeed, it can be said that radio is a medium of advertising, even more than it is a medium of listening to music.

Early radio ads were live. Of course, the advertisements are no longer live except for the more subtle product placements broadcasters might insert, such as live mentioning of local events or businesses. Even recorded advertisements on the radio can be particularly powerful in communicating their message, which is probably why people like Gernsback (1923) found it so hard to ignore them. Advertisements on the radio can be annoying, loud interruptions -- but they get the job done, or else their stations would not be in business. Radio ads can be effective because they are conversational. They can be skits, or they can be a car salesman shouting at the audience about how good their deals are. Regardless of the technique, radio advertisements cannot rely on the visual input that print or television advertisers have access to, and thus, radio ads need to be highly specific in what they are communicating. They cannot rely on the visual symbols that other types of ads rely on.

The way advertising on the radio works depends on the station, the business seeking a product placement, the program director, and other variables. An ad is usually targeted at the specific audience demographic. Pricing will vary, depending on several factors: "radio agencies or stations receive advertisements from their clients before bilaterally deciding on the structure and modalities of the advertisements, including the financial rates," ("Advertising and Broadcasting go Hand in Hand"). A radio advertisement is generally a lower cost investment than a television ad, but it can cost more than advertising online. It depends on the amount of exposure the advertiser wants.