iHeart’s Plan To Go After Google And Facebook Revenue


Perhaps the biggest reason many in the industry want the FCC to pop open its ownership caps is radio’s inability to compete for ad dollars with Google and Facebook. They argue that the current ownership rules are antiquated, the media landscape is vastly different, and the big digital players are unregulated. While iHeartMedia did not sign on to the NAB-backed plan for additional deregulation, they do have a plan to go after the advertising revenue now being taken by Google and Facebook.

There are 7 million small businesses looking for customers. Every successful General Manager, Sales Manager, and Account Executive knows that not every small local business in every market can become a radio advertiser. Sales Managers must determine the time an AE spends on an account with a $200 budget compared to a client with a budget of $5,000. In every market in America that decision has to be made many times. It becomes a question of time for the sellers and economics for the stations.

That’s where Google and Facebook came to the rescue. The two big digital monsters automated ad buying, made it easy for the small business owner, and did it without having to pay a salesperson.

iHeartMedia hopes a new product they’ve developed, that’s now in Beta, will bring many of those smaller businesses now using Google and Facebook, over to radio.

The product is called AdBuilder. It’s an automated self-serve advertising product. AdBuilder creates customized audio ads for advertisers based on information the advertiser shares about their business. According to CEO Bob Pittman, once the advertiser listens to their professionally written and recorded ad, approves it, and decides on a budget and start date, AdBuilder’s automated process creates a media plan that sends the ads to the right people at the right time.

Pittman says AdBuilder represents a long-term opportunity to capture the long-tail small business advertiser that has historically been unavailable because of the economics of using a live salesperson. “We expect the adoption period to be gradual, over the next three to five years, before it begins to reach critical mass.”

Pittman says this will allow iHeart to efficiently begin to address the 7 million small businesses that are uneconomic for salespeople to call on, “instead of just the 60,000 clients we reach today.”


  1. Typically, those in the industry lean in when iHeart speaks. I purposely waited a few days to respond. I admire iHeart’s desire to engage in the battle with Google and Facebook. Takes guts. It’s getting more difficult for radio, as a stand alone medium, to drive results. Therefore, shares are declining. The advertiser’s expectation is pretty much the same as it was 10 even 15 years ago and they are willing to pay for a reasonable return. If $200 gets results for a business advertising on Google or Facebook, fantastic, but I don’t think going after businesses with very limited budget gives radio a real chance to work. Should we still call on these businesses? Absolutely, but we must quickly determine if it is a good fit, and mutually beneficial. Automation is not the way, in my opinion. And, by the “word of mouth” on this thread, it’s buyer beware.

  2. Just in time for the holiday layoffs. All of the comments below are spot on, especially in regards to managing expectations that go along with a “$200 radio buy”. Or even a $5k radio buy in a city like LA for that matter. What no one is mentioning is the inventory. Facebook and Google have an almost endless supply of ad inventory to sell. There is no way radio can compete with that.

  3. Ed.
    I’m surprised you’re surprised.
    This little strategy is like the homeless guy sweeping up at the entrance to the bar – looking for discarded cigarette butts.
    Except, in this case, Bob is no homeless guy.
    Instead of scrounging for nickels, he could concentrate on improving the products and services of his core business.

  4. Another way for Iheart to eliminate jobs!!! Their digital products are crap. They are afraid to show how bad their music streaming is. Nobody buys their Iheart music ap and nobody gets results from podcasting. Watch out salespeople and managers. Your jobs are going to be disappearing.

    • Any CEO – including Bob Pittman – first has a fudiciary responsibility to return shareholder value to the investors. That is how our system works. And whether it’s iHeart and the radio business, or any business for that matter, no jobs are guaranteed. That’s why they are called employees. Again, that’s our system. Only government workers have job security.

  5. This is great if you’re an iHeart station. But, believe it or not, there are small markets where iHeart doesn’t operate. If this system (or something like it) does actually produce results for broadcasters and advertisers alike, it would be great if someone figured out a way to license it for others to use.

    • Seriously Ed? 2 of my friends and myself think the commentators on here are just being realistic.
      With all due respect, you have admitted that you are friends with Bob Pittman and we think that is clouding your thinking. On the other hand, props to you for being loyal to a friend, certainly.
      AdBuilder could be the first step towards iHeart laying off as many salespeople as they can, and then automating much of local sales (like transactional orders from ad agencies.)
      But the most egregious point has been made by others here… that small businesses will think that they are “trying radio”… then they will use AdBuilder with a bad underspend, and conclude that “radio does not work.”
      Being professional in this business or any business, includes not overpromising to a client, or taking their money just to take their money, which describes AdBuilder.
      Anyway other than that, we enjoy your work!

    • I agree with you, but the reality is that iHeart could announce a cure for cancer, and you’d get 20 negative replies. That’s just how it is.

      The fact is that iHeart, more than any other radio company, knows the power of the web. They are closer to Google and Facebook in terms of having the mass audience that advertisers seek. This is a no-brainer. And once its up and running, and there is data available for people to see, I can easily see Beasley and Cumulus signing on with iHeart as partners.

  6. Looks like a money grab to me, and money grabs never work for the client. When the client doesn’t get the results because the expectation is way beyond reason for a $200 investment, all they’ll remember is that another radio station promotion didn’t work. Here’s a thought: Maybe iHeart Radio should stay within it’s core business of radio advertising, and find ways to super-serve the customer with effective radio advertising instead of trying to be digital ad “me too” company. BTW – whenever Google strays outside it’s core business, they seem to fail miserably. Search the term “failed Google projects” and you’ll see what I mean.

  7. Unless a dealer is offering that Chevy for half price for a limited time – like, until close of business today – 200 dollars will still be a rip to the advertiser.
    Meanwhile, “AdBuilder creates customized audio ads for advertisers based on information the advertiser shares about their business.”
    As to the “professionally written and recorded ad”: I tremble when I speculate on what that copy would look like.

  8. What a TERRIBLE idea. I hope iHeart has a disclaimer in big bold letters telling every small business owner that they recommend purchasing a minimum number of commercials to be EFFECTIVE. Radio ISN’T Google. Radio isn’t Facebook. I think it’s a mistake to think this will work. I understand why they’re doing it. Sounds good on the surface, but I’m afraid iHeart is just going to alienate more business owners from doing radio . . . because after all . . . they TRIED radio, and it didn’t work.

  9. iHeartMedia should be concerned about their talk show hosts driving listeners to Facebook via live-streams. What are most talk radio shows? They are distributors of current events and opinion. What is Facebook content? It’s primarily current events and opinion. Facebook continues to search for additional revenue streams, and it will realize there is an opportunity with the talk radio audience; meanwhile, many hosts continue to condition their listeners to look to Facebook.

  10. While I understand the premise of this product, being automated, who will advise the client that the $200 they want to spend will not garner the expected results. One of the most important aspects of selling is managing the expectations of the client. We all want massive results for little money, but the reality is that it doesn’t work that way. Are we talking money only to produce the seven deadly words: I tried radio and it didn’t work!


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