The airwaves of KFI-AM (640) are saturated with calls to do something dial toll-free numbers, visit Web sites, shop at some store’s going-going-gone sale.

The approach, known as direct response advertising, now accounts for nearly half the advertising on KFI, up from 15 percent in 2001. And it’s a big reason why the station, owned by Clear Channel Communications Inc., has climbed nearly to the top of the Los Angeles market in revenues and to No. 4 nationwide.

The talk radio station, ranked third in this spring’s Arbitron ratings, generated $60.1 million in 2004, just behind market leader KROQ-FM (106.7) with $60.3 million. “Talk radio lends itself to direct response because it’s founded on loyalty to the station,” said Greg Ashlock, Clear Channel’s regional vice president.

KFI is one of the foremost practitioners of direct response advertising, not only locally but nationwide. It’s an approach that is gaining traction throughout the industry.

Advertisers like it because the effectiveness of their spots can be easily measured by listener response, while stations see it as a way to stem the Internet’s siphoning of ad dollars.

L.A.-area car dealerships, a growing direct response segment, spent 5 percent less on advertising in 2004 compared with 2003 overall, but their spending on radio increased 12 percent. “Advertisers are getting converted,” said Mary Beth Garber, president of the Southern California Broadcasters Association.

Word of mouth


While KROQ has seen modest or flat revenue growth, KFI surged to reach the No. 4 position nationwide in 2004, up from No. 8 in 2003 and No. 34 in 2000, according to BIA Financial Network, an industry research firm.

And while KIIS-FM (102.7) and KROQ top KFI in listenership, KIIS actually dropped in overall revenues from 2003 to 2004. KROQ had incremental growth, according to BIA.

KFI’s ascent to No. 4 was especially striking in a year in which revenue growth was only 2.7 percent. “2004 was a disappointing year for radio,” said Mark Fratrik, BIA’s vice president. “Radio has been around for a lot of years. Now you have iPods, Internet radio, satellite radio, the impact of cable with niche programming.”

Ashlock says that direct response is well-suited to the station’s format. In some cases, KFI uses its on-air personalities to pitch products, often by calling on listeners to dial a phone number a classic direct response approach. “We’ve probably done the best job of maximizing revenue with the ratings we have,” Ashlock said.

Among the advertisers embracing a direct response approach is American Vision Windows, a Simi Valley company specializing in window replacements. The spots feature owner Bill Herren describing the company’s heritage, followed by a toll-free number for listeners to call for discounts or free installation.

American Vision initially advertised only on KFI but found direct response so effective that it now is running ads on several stations. “Direct response is a call to action,” said Al Alfieri, American Vision’s director of sales and marketing. “With the longevity we’ve been on these stations, people hear us and identify with us.”

Dave Newmark, president of Newmark Advertising, an Encino-based subsidiary of Newmark Communications Inc., which specializes in radio advertising, agrees that direct response is ideally suited to the talk radio format, which demands more attentive listeners than music stations.

KFI is classified as a “foreground” station meaning that its spoken-word content is front and center in listeners’ minds as opposed to a “background” station where music is competing for a listener’s attention.

“The quality of listening is higher and therefore the quality of the response is going to be higher,” Newmark said. “That is not reflected in the rating numbers but it is reflected in the advertising revenues.”

More than ratings


Many advertisers consider more than just ratings. For example, it’s believed that talk radio listeners who spend an hour or two listening to their favorite program or host are more likely to patronize an advertiser than a more fickle listener zapping through various music formats.

George Nadel Rivin, partner in charge of broadcast services at accounting firm Miller Kaplan Arase & Co. in North Hollywood, said certain categories lend themselves to the talk format, including home improvement, professional services and financial services. “A big reason talk stations did well this past year was that the particular categories that were strongest are the ones in which talk radio did really well,” Nadel Rivin said.

While direct response appears to be up nationally, not all radio stations or even talk stations embrace the approach. One problem is that it’s predicated on crafting an individual ad for an individual station, and in major markets where large companies own multiple outlets, broadcasters often don’t want to expend the extra effort.

“Radio would rather tackle the local furniture store that splits up his 10 percent to radio among eight stations in a market like Los Angeles,” said Sean Luce, head national instructor at Luce Performance Group, a Texas-based advertising sales consultancy.

Another question about the format is Clear Channel’s “Less is More” ad strategy, in which minutes of advertising time are reduced in the hopes of boosting listenership. Long term, the strategy is geared to raising rates, but short-term it could result in trimming advertising loads and revenue.

Clear Channel does not release individual advertising data for its stations (while the BIA figures are compiled annually from a variety of data and market studies) so it’s unclear what the short-term effect has been.