Turn the radio dial these days and hear show host Troy Duran talking up buying opportunities in stocks of little-known companies that mine gold, uranium and more obscure minerals like molybdenum. Or hear Bob and David Hanson on another program saying that now is the time to buy that vacation home or investment property.
But Duran is not an investment professional, and the Hansons aren't impartial experts. Their shows are paid advertisements.
Increasingly, this is the sound of talk radio.
As radio stations confront stagnant advertising revenue, many sell blocks of time to stockbrokers, doctors, lawyers, mortgage brokers and other entrepreneurs who produce their own gabfests intended to promote a product or service. It's a departure from the traditional format in which talk jocks are paid to draw listeners to the station, which sells time for commercial breaks.
Media observers say these shows are a sign of the times in a commercial-saturated world, akin to infomercials proliferating on television, and print advertising that pervades almost every public space. In recent years, radio insiders say they have seen an uptick in providers of financial services and mortgage brokers buying time, especially during the housing market boom.
The people behind the programs say they are an effective and inexpensive way to advertise; hosting your own radio show costs as little as a few hundred dollars an hour. They note that shows must carry disclaimers at the beginning and end, explaining who paid for the program. And some show hosts say the advice they give on the air serves an educational purpose.
But consumer advocates contend that listeners may not understand that the programs are an advertising pitch, or think that they are getting unbiased advice. The shows blur the lines between independent talk shows and ads, critics say, and disclaimers might not be heard by the casual listener tuning in for a short commute or break. While advocates call for more oversight, the federal government has rarely intervened.
Moreover, the shows can create potential pitfalls for radio stations giving up control of the airwaves.
In Baltimore, Ferris Baker Watts Inc. stockbroker Brian J. Kelly recently pulled the show he paid to put on Baltimore's WBIS at 1190 AM after regulators barred him from the securities profession this summer. Regulators concluded Kelly bilked a client who invested money with him after hearing his radio program. He has denied the allegations.
"You don't really know what you've tuned into. That's the problem with radio," said Linda Sherry, director of national priorities at Consumer Action, a nonprofit advocacy group.
Station owners disagree.
Claims about products or services are "signs easily recognized by consumers" that they are listening to a sponsored show and not editorial content from the station, said James Weitzman of Nations Radio LLC, which owns WBIS.
Among shows paying to be on the Baltimore-area airwaves are:
Financial advice programs, such as Smart Money with Gil Kuta, another Ferris broker who gives investment opinions and takes calls from listeners. His show airs on WCBM, the Baltimore station at 680 AM, and WMAL at 630 AM out of Washington.
You Auto Know with Dave Serio, an automotive repair shop owner who answers questions about car troubles and recommends area shops, on WCBM and Frederick's WFMD at 930 AM.
Shows about real estate and home loans, including The Mortgage Lender with John Katsafanas, who is on WCBM.
Health and diet shows such as the Res-Q Health Line about a line of vitamins and supplements, also on WCBM. The product maker N3 Oceanic Inc. has built a multimillion-dollar business, primarily by airing radio infomercials across the country.
Duran's show that touts stocks and the Hansons' show, The One Percent Mortgage Solution, about a low-payment loan option, both air on WBIS. The Hansons are also on WAGE at 1200 AM out of Loudoun County, Va.
Some stations, including WBAL at 1090 AM, the top-rated station for talk radio in Baltimore, avoid sponsored shows selling a product or service. WBAL typically pays its radio personalities and their shows are financed by selling commercial time. It only sells a few hard-to-fill time slots to certain kinds of shows, such as churches airing their Sunday programs.
"We're not doing that kind of stuff," said Edward C. Kiernan, WBAL's general manager. "We've had many people come to us with real estate and business shows, and we decided not to be in that business. You're basically turning the radio station over to someone else, and you kind of don't know what's going to happen."
Radio stations "sort of hold their nose and take the revenue," said Frank Saxe, senior editor of the trade journal Inside Radio. "For a radio guy, it's kind of like nails on the chalkboard."
Saxe said radio is attractive to advertisers because it's harder to differentiate the commercial from the regular programming and, therefore, listeners are less likely to turn the channel. "The reason there are so many of these shows on the radio is because it actually works," he said.
Direct-marketing sales via radio reached $71 billion in 2005, including infomercials and "lead generation," a soft-sell approach that hosts use to build a reputation and draw clients through the exposure. That's an increase of 9 percent from the year before, according to the latest data from the Electronic Retailing Association.
Baltimore's WVIE at 1370 AM stopped playing oldies music in the past year and expanded its lineup of sponsored programming, said Robert Pettit, general manager of the station and WCBM. The new talk-show format features consumer advocate and syndicated radio host Clark Howard, who acts as a counterbalance to the shows that are paid advertisements, Pettit said.
Much of the paid programming on radio mirrors formats used by traditional media, including call-in advice shows and talk shows with experts who may or may not be paid by the program. Sometimes, the shows plug the services of others who have paid to be mentioned.
The Hansons, a father and son who host the mortgage show, bring on previous clients who made investments in real estate using what they call a 1 percent mortgage, which actually carries a higher annual percentage rate according to a disclaimer in the show. The Hansons didn't return telephone calls for comment.
In the case of Duran's Opportunity Show, which also airs in other markets, the producers pay for radio time and charge companies for the exposure. They bring on experts like Victor Goncalves, who researches the mining sector for a financial newsletter. While Duran explains the show's arrangement with the companies, he doesn't make clear that Goncalves isn't a disinterested third party. He's also paid for work on the show.
Goncalves could not be reached for comment. But Duran and Ellis Martin, the executive producer, said they tell listeners to do their own research and that only viable companies are put on the air with Goncalves' research serving as a screening tool. They also said they would consider adding disclosures about Goncalves' role.
"Perhaps we need to make that more clear," Martin said.
Radio station managers said they check into businesses seeking to buy airtime, and monitor the claims being made. They say the advertising is similar to paid advertising sections in newspapers. (Linda Yurche, head of marketing at The Sun, said the newspaper takes advertisers "at face value," though it may refuse ads from advertisers who have been the subject of reader complaints.)
WCBM's Pettit said a station employee controls the broadcast, and that they vet professionals seeking to buy time.
When program host John Katsafanas pleaded guilty to two counts of tax evasion several years ago, Pettit said he suspended him from buying time to air the show for a year. Federal prosecutors alleged that Katsafanas failed to file tax returns from 1977 through 1991.
Because of the conviction, Katsafanas was barred in 2002 from working with the Federal Housing Authority's loan program but is still licensed as a loan officer in Maryland, able to write other kinds of loans.
Katsafanas and Pettit now say that because the conviction was related to taxes and not to lending activities, he can continue his radio show.
Pettit also stands by another sponsored show host, Gil Kuta. The stockbroker was suspended for a month by regulators a decade ago after clients complained of unauthorized trading at previous firms, and this summer Ferris paid $60,000 to settle a customer complaint that Kuta improperly generated high commissions. According to disclosure reports, Ferris denied any wrongdoing in the case but settled to avoid a protracted legal fight., especially given that a customer's signature appeared to have been forged.
Kuta said someone at the firm signed the name, though it wasn't him, and declined to comment further on the case. Pettit described Kuta as "a very reputable guy."
Ferris spokeswoman Robin Oegerle said the firm monitors all shows put on by its brokers. Another broker, Brian Kroneberger, is on WBAL but doesn't pay for the time, nor is he paid.
Sponsored programming has been an integral part of radio's history, along with the debate over radio's general obligation to serve the public interest versus its own business interests.
The Federal Communications Commission has moved away from weighing in on radio content, partly because of First Amendment issues, but also because it has taken a deregulatory stance toward the industry, said John Garziglia, a lawyer specializing in FCC issues at law firm Womble Carlyle in Washington.
Similarly, the Federal Trade Commission, which polices deceptive advertising, is more likely to build cases against the advertisers than the radio or TV station, or publisher, said Lesley Fair, an attorney with the agency. In the past two decades, she said, the agency has brought more than 100 cases against infomercial makers, including roughly 10 cases involving radio ads.
Fair said the agency not only pursues cases concerning false claims but also advertisements intended to trick consumers into thinking they are watching or hearing a news or entertainment show as opposed to a commercial.
"When companies buy time and appear to be an independent radio program peppered with tough questions when it's really scripted as an ad, that raises concerns from the FTC's point of view," Fair said.
"Underlying our law is a presumption that listeners listen to news programming with a slightly different set of ears than they would advertising."