Radio geotargeting has become a top subject again, with the Federal Communications Commission officially adopting it for FM. The FCC made the announcement April 2, 2024. Prior to this, there was much division in the industry about the pros and cons of radio geotargeting.
Radio stations realize the value of geotargeting in their digital media products. Now, radio can deliver specific content to certain geographic areas. Some note it could benefit radio spot sales. Others, like the National Association of Broadcasters, have been adamant that it could negatively impact ad rates and revenue.
Here’s a quick explainer of what radio geotargeting is and how this new rule impacts the industry.
What Is Radio Geotargeting?
Radio geotargeting is the ability to identify the user’s location (e.g., city, state, ZIP code or IP address) and then deliver content based on that information.
Geotargeting for radio is possible with ZoneCasting, which occurs when radio stations activate boosters at specific locations to separate their signal and transmit programming and ads to those areas.
The new rule states that radio broadcasters can target content for limited portions of time. The time frame would be three minutes every hour. Commercial, noncommercial and LPFM stations may participate.
Right now, stations can use existing boosters. However, they tend to be low-power, secondary stations. ZoneCasting would likely improve the capabilities. Previous ZoneCasting testers have noted it’s expensive to implement, with annual costs of at least $51,000 and $59,000 for the infrastructure. It would be cost-prohibitive for many stations, even with the potential for more revenue.
With stations’ ability to geotarget, the resulting content would be more hyper-local. It makes sense for news and weather, but what about advertising?
Radio Geotargeting: Good for Advertising?
In most cases, the more targeted the advertising, the more relevant. In reference to geos, a radio market can cover more than one neighborhood, city, county or state. It would allow advertisers to approach radio as they do digital.
Advertisers appreciate radio’s reach but would also find geotargeting of on-air signals attractive. Nearly 90% of businesses use location-based advertising tactics, and they could interpret this as a benefit.
To understand the expected positive impact, BIA Advisory Services and Advertiser Perceptions published research on ZoneCasting and geotargeting.
The report found high adoption of geotargeting by advertisers, but fewer knew of ZoneCasting. Once informed of what it is and its capabilities, two-thirds were interested in using it, and one-half would likely spend more on broadcast radio if this were an option.
Opposition and Support for Geotargeting and ZoneCasting
The FCC is pro-geotargeting. Their take is that it helps small and independent FM broadcasters that want to tailor content. The FCC stated that these organizations have been the “driving force” behind this change and that this option could generate more revenue.
The NAB has the opposite belief. The objections primarily concern fears that radio geotargeting would impact minority stations’ market share, as advertisers may focus only on geotargeted ads.
The NAB’s opposition statement is that it “will cause unavoidable, unresolvable interference that will harm listeners in large geographic areas.”
The FCC hasn’t dismissed the NAB’s apprehensions; it sought to address them with footnotes. Those comments address the NAB’s concerns about GeoBroadcast Solutions (GBS), which offers ZoneCasting. The FCC remarked that it does not endorse GBS.
Stations across the country may be for or against geotargeting, depending on how they view the change. Will it deliver opportunity in terms of ad sales, or will it hurt their position in the market? For example, what if bigger markets geotarget smaller ones and lure advertisers away? It could be detrimental to those stations.
Additionally, it’s likely cost-prohibitive for many stations in various markets.
Radio Geotargeting: What’s Next?
The FCC has not created final processing, licensing and service rules. Stations can use existing boosters and would need to convert them. Those licensees would need to obtain construction permits, a booster license and a request for experimental authorization to originate programming.
As the FCC moves forward and publishes rules, we’ll keep you informed. We’ll also track the reality of geotargeting, whether positive or negative.
