Book Time With Internet Advertisers

Editor's Note: This is a bonus story from Cody Willard, whose commentary usually appears only on RealMoney. This column originally appeared on RealMoney on Thursday. We're offering it today to TheStreet.com readers. To read Willard's commentary regularly, please click here for information about a free trial to RealMoney.

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The age-old advertising models of television and radio finally are dead. Kaput, that is. Gonzo. As the models shift away from these old media to the new media, there's going to be a lot of money made and lost as the winners and losers separate.

The good news is the Internet is presenting new avenues for advertisers, as well as new avenues of stock gains. So let's see how we got here, and then discuss how to gather profits on the road ahead.

For decades, advertisers primarily have used commercials as the advertisement style of choice on these broadcast media. Along the way they developed sponsorship models and product-placement models, but those never caught much traction. Instead, the interstitial advertisement model -- more commonly known as "commercials" -- is the one that has been successful, embraced by industries and their advertisers. Hundreds of billions of dollars have been plowed into that model for the last half century or so.

Look around you now. Broadcast radio is dying, and the competition for those ears is heating up. You've got satellite radio from Sirius and XM Satellite. You've got Internet radio stations that can be listened to via your Real Audio, iTunes or Windows media player. You've got millions of songs being traded (illegally for the most part) over the P2P networks. And of course, there's the rise of iTunes and Napster as legal song outlets.

All these new outlets competing for the ears that so long were dominated wholly by the broadcast radio industry have huge implications for the advertising world. Other than Internet radio stations, the other new outlets broadcast few, if any, commercials. Sponsorship models might came back into play, as in, "Howard Stern on Sirius, brought to you by Playboy," or some such scenario. But the tens of billions of dollars spent on radio advertising are in a steady, secular decline, and that's not pretty for those companies that have depended on those models for revenue, nor for those companies that have depended on that outlet to deliver their message.