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Monitoring Seen as Key in RCS Sale

WHITE PLAINS, N.Y. Media tracking, spot verification and enhanced ad insertion capabilities appear to be among the reasons broadcast group owner Clear Channel purchased software and products supplier Radio Computing Services, observers say.

WHITE PLAINS, N.Y. Media tracking, spot verification and enhanced ad insertion capabilities appear to be among the reasons broadcast group owner Clear Channel purchased software and products supplier Radio Computing Services, observers say.

The sale closed in January; no purchase price was disclosed.

The acquisition, which followed closely the separate Google/dMarc deal, appears to give Clear Channel market traction to diversify its product line of advertising vehicles in the fast-moving environment of marketing technology.

The moves could allow Clear Channel eventually to mirror Google’s process of selling airtime via the Internet and automating the ad insertion business, observers predict.

The companies did not address specific reasons for the purchase in announcing the sale and declined comment on how Clear Channel’s business plan benefits from having RCS in its portfolio.

Current management stays

“Clear Channel will continue the current business and support RCS in maintaining their high standards and high level of expertise in meeting the needs of radio, television, the Internet and other media,” said Jerry Kersting, chief financial officer of Clear Channel Radio.

Current RCS management is expected to remain in place, Kersting said, with company founder Andrew Economos serving as a consultant to Clear Channel.

RCS was founded in 1979 and has a product line that includes the Selector music scheduling system, Master Control digital automation system and Media Monitors, a wholly owned subsidiary that uses an electronic fingerprinting technology for spot verification. RCS has approximately 7,000 worldwide customers.

RCS launched Media Monitors and its AirCheck software as a broadcast monitoring and verification service for radio, advertising agencies and private media investment companies. The company delivers continual broadcast data via the web of nearly 1,000 radio stations in North America. It also sells newspaper ad tracking information.

This is not the first time Clear Channel has purchased a company in its broadcast supply chain. It owns Prophet Systems, which makes a digital audio management platform, and has its own in-house music scheduling software called MusicGen, leading some radio suppliers to speculate that Clear Channel pursued RCS to obtain Media Monitors and its ability to identify on-air spots and songs and provide same-day online reports to clients.

“I think it’s the monitoring part of RCS that interests Clear Channel the most,” said Ron Paley, senior business developer for OMT Technologies, a supplier not party to the deal.

“This could even allow them to move further away from Arbitron, with a new ratings process of some sort. RCS has been doing some very interesting things logging audio in many major markets.”

OMT Technologies sells the iMediaTouch digital audio content management system.

Paley said he also envisions Clear Channel wanting to use its 1,200 radio stations to deliver advertising for clients “on a national level and with substantial impact” through ad insertion and other technologies.

“It’s the new technology that is really driving these deals. Broadcasters and other companies like Microsoft and Yahoo! are digging for ways to more efficiently deliver advertising messages over the air and over the Internet,” Paley said.

‘Step forward’

The acquisition “validates the media monitoring industry,” said Steve Lubin, CEO of Mediaguide, a competitor of Media Monitors in spot verification.

“This a step forward for our industry. (Clear Channel) has been in the music side of monitoring with Premiere Mediabase for quite some time. It looks like Media Monitors should be a good accompanying product,” Lubin said.

Mediaguide uses a fingerprint technology similar to Media Monitors to track music and advertisements and monitors more than 2,500 stations in approximately 150 Arbitron-rated markets.

Fingerprinting is a passive technology that creates identifiers from pieces of recorded audio that can be compared to audio collected from unmanned monitoring posts across the country. That information is collected and provided to customers to determine when and where a song or advertisement played, Lubin said.

Clear Channel has “diversified on many occasions and this is just another chance to broaden its services,” another observer said. Clear Channel owns Premiere Radio Networks and has a stake in XM Satellite Radio. It purchased Prophet Systems Innovations in 1998.

RCS is headquartered in White Plains, N.Y., and has 450 employees at 23 offices. The company will announce a “handful of new products and services” prior to NAB2006 in Las Vegas this April, an RCS spokesman said.