Interep and Katz Announce Plans for Joint Venture.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 10, 2000

Agree to Develop Radio Industry's First Internet-based Data Exchange

Technology

Katz to Participate in Interep's RadioExchange as First

Step

System will Improve Radio Buying Efficiencies While Preserving

Personal Communication

Today, Interep (Nasdaq:IREP) and Katz Radio Group announced their plans to enter into a joint venture with the goal of providing a radio industry-wide Internet-based system for the electronic transfer of radio advertising orders.

As a first step in the process, Katz has agreed to participate in the launch of Interep's RadioExchange(TM) technology - enabling Internet-based communication between agencies and national rep firms, and between the national rep and their client radio stations. This technology allows the seamless flow of data, such as avails, orders and invoices, between all parties involved in the radio sales process.

According to Ralph Guild, CEO and Chairman of Interep, "Advertising agencies have expressed their desire to simplify the back office work involved in the radio sales process for many years. After extensive conversations with various levels of agency executives to discover their specific requirements, we were able to develop an Internet-based exchange that answers these needs. The development of such a technology will be instrumental to the continuing growth of radio."

Stu Olds, President of Katz Radio Group, said "Agencies have made it clear that they want an end-to-end solution that allows all industry groups to participate - agencies, stations and reps. By working together, we will expedite the potential benefits of such a system for all parties involved."

Guild and Olds emphasized that agencies' primary requirement in creating an electronic interface was that national reps employ a single, industry-wide operating system. To comply with that goal, Charles Parra, Interep's Chief Information Officer, designed and oversaw the development of RadioExchangeTM with the cooperation of Donovan Data Systems, Strata and Smartplus to assure compatibility with the industry's key software systems. Said Guild, "We agree with the advertising community that we must set the electronic standard for our industry."

Added Olds, "While we could have continued to develop our own internal systems to meet this need, we decided that our participation with Interep in RadioExchange(TM) would better serve the industry's interests and allow us to develop an end-to-end system much more quickly."

Guild and Olds are currently recruiting for a person to operate RadioExchange(TM). When the joint venture is complete, it will hire its own president and operate as an independent entity. Both firms emphasize that the joint venture applies only to their involvement with RadioExchange(TM), and that the two remain focused on working competitively on behalf of their represented clients.

An Internet-based metamediary such as RadioExchange(TM), referred to as a channel facilitator, will help all parties involved in the media buying and selling process reduce both processing costs and errors to a degree never before possible. The face-to-face interaction between radio representatives and agency buyers and planners remains at the center of the RadioExchange(TM) sales process.

According to Don Wahlig, Interep's Director of Marketing for eBusiness Services, "As is the rule in the new network economy, the value of RadioExchange(TM) within the advertising community will increase exponentially as its user base expands. For this reason, we strove to develop a flexible technology that will interface equally well with existing software systems. Because industry-wide support remains vital to our on-going efforts, we have done and will continue to do extensive focus group testing as we roll-out the program."

As with all channel facilitative technology, RadioExchange(TM) cannot, and does not attempt to replace the full range of services offered by a national rep to both agencies and its client stations. Rather it provides a value-added solution to improve areas of inefficiency. Supporting this use of the technology, a recent Interep survey of media executives found that the vast majority welcomed the use of electronic communication in the buying and selling process as a means of increasing efficiency and accuracy. However, the majority also emphasized that they saw electronic communication as a way to increase human interaction and spur creative strategizing between reps and media buyers and planners - not a way to reduce personal contact.

Currently, it is estimated that radio national sales representatives spend 52% of their time on in-office activities such as implementing orders, resolving discrepancies and other activities not directly related to selling. According to Guild and Olds, RadioExchange(TM) "will allow sellers more time to do more of what they do best - that is strategizing on behalf of client radio stations and enhancing agency relationships. Agencies and stations will share in these time-saving benefits. In this way, technology will not replace, but rather enhance the existing infrastructure."

Mary Barnas, Senior Vice President / Director of Spot Broadcast at Carat USA, Inc., one of the agencies participating in the roll out trial of RadioExchange(TM), commented, "As an industry, one of our major goals should be to eliminate duplication in work efforts, such as re-keying of orders and reconciling invoices that have burdened the buying process for so long. Any system that would save time and manpower, and make spot radio easier to buy would be welcomed. I applaud all advances in this type of technology, such as RadioExchange(TM)."

Gerry Boehme, President of Katz Interactive Marketing, Katz Media Group, said that, "Industry experts estimate that 7% to 8% of national radio billing is lost each year due to discrepancies, of which roughly half is the result of inputting errors. Based on this calculation, the radio stations may lose millions of dollars annually due to re-keying errors. This does not even include the millions of dollars in billing discrepancies that result in delays of payment to stations, and lost revenue in the form of time and manpower."

Interep (Nasdaq:IREP) is the largest independent sales and marketing company specializing in radio, the Internet and new media, with offices in 15 cities and annual billings in excess of $1.4 billion dollars. Interep is the parent company of ABC Radio Sales, Allied Radio Partners, Caballero Spanish Media, Cumulus Radio Sales, D&R Radio, Infinity Radio Sales, McGavren Guild Radio and MG/Susquehanna, as well as Interep Interactive and Interep New Media. In addition, Interep is parent to Interep Networks and its new business development team, the Interep Marketing Group. Support services include Research, Promotion Marketing and Sports Marketing divisions. For more information, visit the company's website at www.interep.com.

Katz Radio Group is a division of Katz Media Group, Inc., the only full-service media representation firm in the United States serving multiple types of electronic media, with leading market shares in the representation of radio and television stations, cable television systems and networks of broadcast related Internet Web sites. With annual billings in excess of $1.6 billion, the company is exclusively retained by more than 2,300 radio stations. Katz Radio Group is the parent company for Christal Radio, Clear Channel Radio Sales, Eastman Radio, Katz Hispanic Media, Katz Radio, Sentry Radio, as well as Katz Interactive Marketing and Katz Dimensions. For more information, visit the company's web site at www.katz-media.com.