Fishers-based audio marketing technology company Vibenomics Inc. on Wednesday announced it has begun selling ad spots to national advertisers for audio commercials that will be played across many or all of its clients’ in-house controlled radio stations.
Vibenomics will do so under its newly formed Audio Out-of-Home Ad Marketplace, which will be headed by former Emmis Communications executive Paul Brenner.
Vibenomics officials said the new offering is expected to generate a good deal of revenue for Vibenomics and its clients.
After Vibenomics sets up an in-house radio station for a client, it negotiates how many ad spots a client will maintain for its own self-promotion, and how many will be made available in the Vibenomics Advertising Marketplace. Vibenomics gets the lion’s share of the money from the inventory it sells. All advertising sales are managed by Vibenomics, with a revenue share provided to the client locations where advertisements run.
This revenue-share program can offset the typical expenses incurred for in-house radio stations, and generates profits for some clients, Vibenomics officials said.
Brenner formerly served as president of Emmis-led NextRadio, which allowed cell phones using an app to tune into FM radio with various enhancements not available through a traditional radio. Emmis decided to dramatically scale back NextRadio in December. Brenner joined Vibenomics in June.
Since its founding in 2016, Vibenomics has programmed in-house radio stations for a growing number of customers, including the Indianapolis International Airport, Ricker’s convenience stores and Verizon retail stores.
Vibenomics has grown quickly, with “several hundred customers and 4,000 locations” where its platform pipes in music and announcements aimed at spurring sales, Brent Oakley, Vibenomics co-founder and CEO, told IBJ. He said the company, which has 35 full-time employees, is adding about 100 locations a month.
Vibenomics, which has far raised $3 million in seed funding, is not yet profitable. But Oakley said the national ad marketplace should be a game-changer that makes the company profitable by late 2021.
“Our projections tell us we’ll grow six times over the next six months,” he said.
Until now, Vibenomics has made money by charging its clients monthly for managing audio offerings that combine cloud technology with full-service audio programming and content production capabilities. It also has sold ads through each of its customers’ radio stations separately.
“We think the national advertising sales effort will have a very big impact,” Oakley said. “It will bring in more money than the software-as-a-service part of the business.”
Already, Vibenomics has signed deals with Monster Energy, Live Nation, General Mills, Body Armor, Pepsi, Purdue University and Red Bull to advertise across its network.
“The [out-of-home] market is expected to grow from $8 billion to $11.5 billion through 2022, and we are already taking market share from others by offering more efficiency and better results,” Scott McCorkle, Vibenomics executive chairman, said in written comments. “The Vibenomics Audio Out-of-Home Advertising Marketplace is proving very attractive to national advertisers. They want to reach the unique audience we have created and amplify the voice of their brands in an entirely new way—right at the point of sale—when it matters most.”
Brenner has been key in helping broker national deals and continues making contacts with national advertising agencies and retail brands, Oakley said.
Each of Vibenomics customers gets approval of what ads play over their stations to avoid conflicts of interest.
“We’re going to be promoting things that make sense in our customers’ stores,” Oakley said. “Our customers have a high volume of foot traffic and they’re desirable places to have [commercial] messages played. And often times, an advertiser can get a message out quicker over our network than they could through traditional media.
“Our customers are turning something that used to be an expense—in some cases a six-figure expense—into a profit center,” Oakley added. “Our customers are generating a substantial and serious revenue stream that simply didn’t exist before.”
For Vibenomics, the ad sales revenue potential for its clients “has taken a lot of friction out of the SaaS sales side,” Oakley said.
Most Vibenomics clients that opt in to the national advertising marketplace and sell at least 50% of its ad inventory will be “cash-flow positive within three months,” Oakley said.