Radio spot

In the US, commercial radio stations make much of their revenue selling airtime to advertisers, who put on the air radio advertisements. Of total media expenditures, radio accounts for 6.9%. Radio advertisements or "spots" are available when a business or service provides valuable consideration, usually cash, in exchange for the station airing their spot or mentioning them on air. The United States Federal Communications Commission (FCC), established under the Communications Act of 1934, regulates commercial broadcasting, and the laws regarding radio advertisements remain relatively unchanged from the original Radio Act of 1927, enacted to deal with increasing problems of signal interference as more and more stations sprung up around the country.

The first radio broadcasts aired in the early 1900s. However, it wasn't until 1919 that radio stations began to broadcast continuously, similar to the modern practice. In the United States, on November 2, 1920, KDKA Pittsburgh became the first radio station to receive a commercial license from the government. KDKA engineer Frank Conrad may have been the first to broadcast a radio advertisement on his own experimental station in 1919 when he thanked a Pittsburgh music store on the air for supplying him with phonograph records, although that was for trade, not cash.

Most early radio stations were put on the air by the manufacturers of radio equipment, such as Westinghouse and General Electric or by department stores which sold radios, such as Gimbel's, Bamberger's and Wanamaker's. After all, if they wanted customers to buy radio sets, there had to be stations for them to listen to. At first, they weren't concerned with the stations making a profit, if sets were being sold. But as more stations began operating, station owners were increasingly faced with the issue of how to maintain their stations financially, because operating a radio station was a significant expense.

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