A radio advertising agreement helps businesses who want to use radio as an advertising medium but do not have a relationship with any particular radio studio. In current advertising circles, radio advertising agreements have many variants with Internet radio and satellite radio companies making contracts as well as smaller, local radio stations. However, the agreement itself follows the same basic guidelines.
A radio advertising agreement is a contract between a radio studio or company and a business that wants to advertise on the radio station. The business typically fills out a pre-approved form specifying what type of commercial they will make and when they will advertise it. This allows both parties to come to a legal arrangement lets the radio studio sell air time more quickly.
Like TV commercials, radio commercials are sold based on time slots during certain programs--the more popular programs and times of day are in higher demand. The advertising agreement begins with a program, time slot and the length of time that the advertisement will continue. Then it moves on to an advertising rate, usually a payment per month with an upfront fee included. There may also be sections for pre-payment discounts and cancellation of the contract.
Businesses use radio advertising agreements to launch radio sections of their marketing campaigns, especially local businesses that can more easily afford radio advertising. Radio studios and companies, however, use radio advertising agreements to ensure everyone advertising on a station is legally contracted to pay for their time and is not a competitor of the radio station or any program that airs on the station.
The station often includes several conditions in the radio agreement that allows it to refuse advertising materials that it does not think are appropriate and prevents businesses from turning around and selling their radio advertising time for more money. Other stations may have conditions that prevent a business from suing if their ads are placed close to rival product commercials.
Benefits and Considerations
For businesses, radio advertising agreements allow them to make a specific deal with a station that broadcasts to a specialized area, allowing the business to customized advertising. Radio commercials are also easy to produce and can be created or changed very quickly. However, consumers may tune out radio advertisements or find them difficult to act on, which can lower the effectiveness of radio advertising agreements from a marketing standpoint.