Free online radio stations can generate an income in several ways, including through traditional advertising on its website, on-air promotions and advertising, paid product sponsorships and affiliate marketing. Some radio stations also receive money for promoting particular artists and songs.
The specific methods that free online radio stations use to generate an income vary depending on the station's content and format, but one of the most common methods is online visual advertising. Many independent Internet radio stations broadcast through their own websites, which provides them with valuable online real estate to monetize. By placing ads on the site, the station earns money for every visitor who sees it and additional money for every click on the advertisement.
Similarly, many online radio stations place affiliate marketing links on their sites, which may appear as text or images. Affiliate marketing is a process in which a company pays a percentage of each sale to an outside source for promoting the product and generating the transaction.
Some online radio stations also use traditional broadcast advertising tactics, such as airing audio commercials between songs. Many online radio stations also receive sponsorships from companies, from which they receive direct payments for the recurring promotion of the company and its products. If the radio station employs disk jockeys or on-air personalities, it may also require it to mention the product and company while on the air.