Radio Stations Raise Rates as Dot-Com Advertisers Pile On.

The bonanza of ad spending that's boosting media fortunes nationwide has been especially kind to L.A. radio.

Revenues for Southern California radio stations are up 260 percent in 1999 vs. last year, industry sources estimate - and a large portion of that increase is coming from Internet-related ads.

The higher revenues aren't just the result of having a large group of new advertisers in the mix. Most stations have raised their prices steeply to meet the intense demand for airtime.

"This past fall, radio spots were selling for $5,000 apiece, compared to $1,000 earlier this year," said Roy Laughlin, general manager of KIIS-FM 102.7.

Despite the higher rates, KIIS-FM sold out all its airtime in October, Laughlin said. The station is on track to generate $50 million in revenue this year, 10 percent of which is coming from Internet companies, including local players such as eToys.com, Click2Asia.com and NetZero.com.

So far, there has been little resistance from dot-coin companies to the higher prices. For the most part, the advertisers appear satisfied with the results of their radio campaigns.

FindWhar.com, a search engine based in New York with offices in Santa Monica and Florida, was a sponsor of KIIS-FM's birthday promotion, participating in the $2 million giveaway. Since the fall event, FindWhar.com, s site traffic has been ramping up at a rate of 100 percent a week, said Find-What Chairman Courtney Jones.

It's the immediacy of radio advertising that is especially attractive to dot-coin companies. Ads can be targeted to a narrow demographic, and can be produced less expensively than TV ads - and more quickly. Time is crucial in the digital world, with many dot-corn companies striving to go public before the Nasdaq boom subsides.

"They're doing it for the IPOs," said Dina Silverman, sales manager at KFWB-AM 980, "so getting their name out there quickly and completely is foremost for them."

Further, radio is an ideal medium because people tend to listen just before going online. Commuters listen to the radio in the morning, then sign on once they get to work; they listen on the way home in the evening just before sitting down to surf the Net.

"We are really pleased with the results," said Susan Daniher, vice president of marketing at DYD Express, which has been promoting itself on KROQ-FM 106.7. "We're up 300 percent in orders over this time last year, and we will hit $65 million in revenue."

That surge in business is coming at considerable expense. In the fourth quarter alone, DVD Express is spending about $10 million on marketing.

But how long can the frenzied pace go on?. "They're not spending at a rate that's sustainable," said David Stewart, chair of USC's marketing department. "It's a desperate attempt to build brand in the short term, knowing there isn't long-term hope. The problem, of course, is that it's hard to build a brand in three to four months. It's not just about advertising, but about the entire Web experience."