As radio advertising revenues continue their slow decline, stations are turning up the volume on sponsorship.

Although radio stations have historically been active sponsors of a wide range of properties, their level of involvement may never have been higher than right now.

According to IEG’s latest property survey, 31 percent of properties have a sponsor in the radio category–the highest number in 11 years and up six points over last year.

Radio’s primary interest in partnering with properties remains the same as in recent years: the ability to generate non-traditional revenue through the sale of sponsorship rights.

Radio stations’ need to develop NTR vehicles is driven by growing demands from advertisers for integrated marketing programs that go beyond 30-second spots to offer opportunities to interact with consumers.

Non-traditional revenue represents one of the few bright spots in the radio industry. NTR rose 16 percent in the second quarter of ’07 over the year-previous period, according to the Radio Advertising Bureau. At the same time, revenue from local and national ad sales declined two percent.

Non-spot assets provide stations with a key benefit: The opportunity to tap into digital advertising, promotion and sponsorship budgets, all of which are growing at a faster rate than traditional advertising budgets.

Demonstrating the growing importance of off-air inventory, many in the radio business are moving away from the term non-traditional in favor of non-spot revenue as they position themselves as integrated solutions providers, said Elaine Clark, general manager with Revenue Development Systems, Inc., a non-spot revenue consultancy.

“In five or ten years non-spot assets will probably be as valuable, if not more valuable, than spot sales,” she said.

To access those assets through partnerships with properties, radio stations typically structure deals in one of three ways:

• The station secures the right to sell and retain sponsorship revenue from several categories
• The station secures the right above, and also receives a cut of ticket and/or concession sales
• The station secures the right to sell all sponsorship categories and shares revenue from those sales with the property

Most radio/property partnerships do not involve cash, with stations typically providing advertising time and promotional support in exchange for sponsorship sales rights.

Online Activation Takes Center Stage
In a new twist, radio stations are increasingly incorporating Web sites, text-message promotions, email blasts and other digital elements into their property partnerships and their offerings to sponsors.

“Traditional media is under siege, and digital media is all the buzz,” said Sheila Kirby, president of strategic sales development with Interep Innovations, Inc., the marketing division of Interep National Radio Sales, Inc. “Radio stations have been slow to embrace the digital age, but they are at the table now.”

For example, station owner Bonneville Radio Group St. Louis activated its sponsorship of this summer’s Country Megaticket concert series at Verizon Wireless Amphitheater St. Louis with a text-message promotion dangling tickets and artist meet-and-greets. Bonneville touted the series’ two local co-presenting sponsors–The Tan Co. and Ted’s Motorcycle World, Inc.–in follow-up emails after consumers opted into the promotion.

Bonneville also streamed concert footage on its Web site as part of a promotion that encouraged listeners to spot a DJ in the audience. The promo was sponsored by a local auto body company, said Kim Grant, partnership marketing and new media sales manager with Bonneville Radio Group St. Louis.

Similarly, Emmis Marketing Group Indianapolis leveraged a partnership between Emmis Communications Corp.’s WYXB-FM and Carmel, Ind.’s CarmelFest Fourth of July celebration with an interactive teen-centric marketing program for The Steak n Shake Co.

The quick-service restaurant chain served as presenting sponsor of an American Idol-themed talent contest that was promoted through on-air mentions and B105.7’s Web site. The station hosted the final competition at CarmelFest’s teen stage, which also was presented by Steak n Shake.

“Everything that we do is integrated,” said Jacki Petersson, general sales manager for sports, events and sponsorships with Emmis Marketing Group Indianapolis, which works with four Emmis-owned stations in the market. “We have commercials that we can use, but we have a lot of other tools at our disposal.”

Tips On Forging Successful Radio Partnerships
Below, IEG SR offers tips for properties on structuring beneficial relationships with radio stations:

Understand business structure and points of entry. After identifying stations that target the same audience as the property, rightsholders should examine the station’s ownership and decision-making structure.

In the era of consolidation, many stations are owned by large radio station holding companies such as the CBS Radio division of CBS Corp., Citadel Broadcasting Corp., Clear Channel Communications, Inc. and others.

These companies usually own multiple stations in major markets. These station “clusters” sponsor on behalf of both multiple stations and individual ones, and typically each major-market cluster has a marketing or business development position responsible for sponsorship.

In addition to those personnel, properties can approach marketing directors, business development directors and general managers at individual stations.

“At the end of the day, the general manager is the ultimate decision-maker,” Kirby noted.

Ask for promotional support beyond on-air inventory. When evaluating a potential radio partner, properties should try to secure not only on-air spots and mentions, but also messaging through the station’s Web site, email correspondence and other outreach efforts.

“When properties approach stations, they should ask about all their capabilities. If they don’t have a clue about what you’re talking about, you should walk away,” Clark said.

Be specific regarding which categories stations can sell. Properties should explicitly identify the sponsor categories they are responsible for selling, and which industries the radio partner is able to go after.

“If you are not specific in a written agreement, radio stations tend to go outside the box to make the sale. If you give them the truck plow category, you’ll have a truck coming with it,” said Greg Chiecko, sales director for the Eastern States Exposition, which produces the Big E fair.

Make it a partnership. Properties need to provide radio stations with the assets and tools they need to make the relationship a success, and vice versa.

For Dave Rhody, president of event producer RhodyCo Productions, that sometimes means holding sponsorship training sessions for radio sales staff that explain the scope of benefits as well as the differences between selling marketing platforms as opposed to spots.

“It often is challenging for radio station staff to really understand a promotional package in its complexity, and it is particularly difficult to sell it in a timeline structure that is relevant,” he said. “With radio, it’s ‘give me the money, and you’re on the air next week.’ ”