Leading Local Insights
Leading Local Insights
Local Radio in Focus: Geofencing, Politics, and Revenue Growth
In our latest podcast episode, BIA's Nicole Ovadia and Rick Ducey delve into key topics from our recent RAB webinar on local radio opportunities. They explore the impact of geofencing on advertising strategies, the ongoing influence of radio in political campaigns and small market opportunities as compare to large markets.
Rick provides insights on how geofencing enables stations to deliver targeted ads, citing relevant examples such as Chuck E. Cheese's localized efforts in San Francisco. Nicole and Rick then analyze radio's enduring role as a trusted medium in political advertising and identify the business verticals driving revenue growth in smaller markets.
This episode offers valuable perspectives for those interested in the future of local radio. Discover how adopting the latest technologies can position stations for success in a changing media landscape. As BIA continues to collaborate with RAB and local radio sellers, we look forward to exploring more opportunities for growth and innovation.
Hello and welcome to BIA Advisory Services' Leading Local Insights podcast, where we talk about all things related to local advertising and spending. In this episode, meant to be a companion to the webinar BIA recently did with the RAB, we will dive into some topics more deeply. My name is Nicole Ovadia and I'm the head of forecasting here at BIA, and I'm joined today by my colleague and friend, rick Ducey. Managing director. Rick, say hi to all your fans.
Speaker 2:Nicole, it is always great to be with you anytime, anywhere, and I'm really looking forward to our discussion here.
Speaker 1:Ah, I think he actually meant that. Anyway, so, as I noted, recently we did a webinar with the RAB for their members, which was our first time in front of that audience in quite a while. Rick and I really enjoyed talking about all things audio and we encourage you to check it out. It's available for RAB members, but if you aren't currently an RAB member, don't worry, reach out to us and we'll definitely help you out to get you more information. You can always reach us at info at biacom. But let's take some time and talk a little bit more about some of the questions that came up During that session.
Speaker 1:We had a ton of very interesting questions, which did not surprise me at all, because, honestly, the future of audio it's very interesting, there's a lot to dive into, there's a lot of opportunity and there's also a lot of headwinds causing some issues. So one of the topics that we were talking about that had a lot of interest was geofencing and targeting for radio over the air. Rick, you talked about how important this is for the future of radio to be competitive. Quite honestly, could you talk a little bit more about how you see this rolling out? How do you see adoption happening? Because, honestly, if I'm a seller at an individual station, I'm really excited about the future of geofencing, but when am I actually going to be able to offer this to my clients?
Speaker 2:Right exactly? The answer is until last spring you couldn't, because of an FCC rule that forbid FM radio stations from using boosters to originate content. For various reasons, part of that was driven by the technology. Fm booster technology wasn't that good, but BIA for disclosure has been working with a company that has brought a patented innovation to the FM broadcaster community that allows boosters to originate content using synchronized single frequency networks, a technology that maybe people on the TV side are more familiar with. But essentially you can have an FM station with a main transmitter and boosters configured to serve areas either to improve signal, which you would want, or you can even have boosters in business areas that you want to originate content in. So, for example, dallas-fort Worth, you may want to have a Fort Worth geotargeted zone or geofence zone, and a Dallas zone. San Francisco you may want to do East Bay as a separate zone, and there's been some work doing this. I'm sorry, were you going to say something, nicole?
Speaker 1:No, just very interesting, of course. I mean that makes a lot of sense. All this time, dallas, fort Worth like yeah, allow me to separate Dallas and Fort Worth. They're different types of clients, so please continue.
Speaker 2:Yeah, and there's interest in this, and so GeoBroadcast worked with Dentsu, their radio agency, who had the client chucking a box and they were very interested in trying this. So they did this in a San Francisco market and they ran East Bay creative ads and they ran creative targeting the San Francisco South Bay area, and so they were able to geotarget using radio. Now at BIA, nicole, your forecast team looks at ad revenue spent targeting local audiences across 16 media. Every one of those 16 media, except over-the-air radio, can geotarget and does geotarget. Local TV stations are coming into that game, but they've always been allowed to and been encouraged to. Now local radio stations have the ability to do that by originating content on these FM boosters for a few minutes an hour, and so for radio stations you're talking about sellers it's different because you're used to selling the whole signal, the whole market.
Speaker 2:On the digital side of local radio stations, which you also separately forecast, of course, nicole, that's a growth area selling digitally, and basically 100% or very close to 100% of that digital advertising that local radio stations sell is geo-targeted. So when you talk to the broadcast radio sellers they'll say you know, I'm not really sure what to do. How do I put together a value proposition. It's like well, go talk to your digital sellers. They do this all day, every day. So there's a lot of workflow and institutional knowledge and customer relationships built up around geo-targeting at radio stations already. And you go to the digital sellers at radio stations and say, hey, what if you could have some element of geo-targeting on our big broadcast signal? Would that be interesting? The ones I've talked to go crazy and say, of course, then we can have a multi-platform campaign where we can have over-the-air audio, digital audio, we can do display, search, social, we can put together a full package. It'd be very competitive and compelling in the marketplace.
Speaker 1:So that's so interesting, Rick. I love what you're saying. So, from that seller perspective, if I'm sitting at my desk and I'm likegeting and so when it does come that I, you know, am able to sell that to my clients over the air, I will be already advanced and educated on this space. I think that's super smart super smart strategy.
Speaker 2:It's your question about when it's starting to roll out. So the first set of broadcast groups in 10 or so markets are rolling out this technology and starting to get organized this fall and then it will come to market. And the other thing that's really interesting when we talk about technology and innovation in technology, a lot of times there's an adoption curve. People have to actually buy the technology, figure out how to use it, use it and in the media business you have to wait till that scales up before it becomes interesting enough to be a target for advertisers. Well, on the receiver side, radio audiences do nothing. They use their exact same radio receivers. They use their exact same radio listening behaviors, although they may actually increase use of radio. If you get geo-targeted traffic ads, geo-targeted weather, geo-targeted PSAs, geo-targeted ads, you know you may be encouraged to listen more to radio.
Speaker 2:Bia did a study and Advertiser Perceptions did studies of local, regional and national advertisers and we said to them okay, here's a proposition. What if local radio stations could do over-the-air geotargeting? Would that be interesting? And those studies showed that yeah, I mean all kinds of advertisers are interesting in this geotargeting with local radio stations. Those that currently buy radio said they'd buy more the majority and those that don't buy radio said, oh well, now I'd use radio. So you know, at least there's a measure of interest. We'll see how the dollars flow. But the Jack in the Box CMO doing that project in the San Francisco market was thrilled and said now we can do geo-targeting like we've always wanted to do on radio. And then my friends at the agencies are like any element of targeting, you can give us a radio you know we could desperately use, because we want to improve the value of radio as we bring it to our clients and execute their campaigns.
Speaker 1:I love the idea of just that geo-targeting, and even in the content side. You know, as a New Yorker, if I'm driving and I hear the traffic report, like I don't care what's happening on the LIE, all I care about is the BQE. But you know, given where I am and whatnot, the fact that that could be adjustable and that even the relevant traffic down to a geo-targeted area is truly compelling and I do think that would lead to more listenership and more engagement, which, of course, would lead to more advertising and more sales.
Speaker 2:Exactly. And the way this works. Say a station has a booster serving Long Island and a booster serving Manhattan, maybe New Jersey, maybe down south towards Philadelphia. You come to a break, say the 10.30 am break, and you can run four different spots. So in that same 30 seconds you run four spots and you're going to be serving different sizes of audiences, of course. And so instead of 100% of the market rate, say, you charge 30% of the market rate for each of those four geo zones. So that's why I'm only paying 30% of the market rate. Well, I can now afford radio. I can never afford that station in New York, but at 30% I can afford it. And then, if there's four zones, the station is making now 120 percent of the revenue off that 30 second slot where they're running for geo targeted spots. So maybe it's 150 percent. You know, it depends how well their sales and marketing and advertiser satisfaction goes.
Speaker 1:So interesting. And, speaking of targeting, I want to change topics a little bit and talk about political. So that's one another thing that came up on our RAB webinar was talking about political, and of course we are in 2024. We are in a political season, but radio is always undershared. I mean, it has always been undershared in terms of political spending, relative to the number of ears and the audience that it attracts.
Speaker 1:And so the other thing that we hear about local radio, especially over and over again, is that it is a very trusted medium, especially news source, as a news source, and so as we go into this political season of uncertainty, it's always baffling to see radio getting undershared. So we have a couple of reasons why that might be the case. One of it is in the past politicians love to see themselves, they love to hear themselves as well. I mean, they talk on those talk shows as well, but there's just nothing quite like seeing yourself on TV or on a video medium for a lot of these political. But I do think another reason why radio doesn't do as well among political advertising is the lack of ability to geotarget for over the air, as you just mentioned. So, rick, could you talk a little bit about the change or the growth in CTV OTT where it comes to political and how audio companies might be able to take advantage of that as we're going into this political season.
Speaker 2:Right, well, I'm sure you love being in Brooklyn, connecticut, new Jersey, maybe even Pennsylvania. Political ads you just can't get enough.
Speaker 1:Oh yeah, so relevant, oh yeah.
Speaker 2:So that's. You know that there's a lot of waste there from a campaign perspective for radio, from a campaign perspective for radio, and with connected TV they can have video. Now I suppose some people active in the radio industry may point out to political candidates that they probably do have faces for radio. But we'll put that one aside for the moment. The value of CTV on political campaigns and this is reflected in really escalated spending in CTV is you can buy ad inventory directed to the big TV screen, just like it comes from local TV stations, but it's coming streaming over CTV platforms and you can target it by zip code. You can target it by state.
Speaker 2:So if you're a statewide candidate, I don't really want to pay for viewers in Connecticut, new Jersey.
Speaker 2:If I'm a New York candidate, and in fact if I'm running for a borough, I don't even really want everybody in the metropolitan to see the ad. I would like to concentrate my spend, reduce waste, just to go to where my voters and my electorate base is, and CTV allows you to do that is and CTV allows you to do that. So you get the benefits of big screen TV campaign spots, that engagement, the visual connection the candidates get to see themselves and you're able to geo-target it very precisely with CTV. The other thing with CTV, since it is internet-based and you have the ability given privacy constraints and clean rooms and everything to find out what happens. Did you drive that person to a website? Did you increase foot traffic somewhere? Did you get people to download more information on the candidate? So you have a lot of performance tools and levers you can use with CTV that aren't available with other media, and that's why these political campaigns and industry campaigns are saying wow, let us wake that up in our media mix.
Speaker 1:So interesting and absolutely just keeping our eyes on this through the rest of this 2024 election cycle is fascinating, and I can't wait to see how 2026 and 2028 and beyond continue to evolve in this way. I think it's a massive opportunity for audio to really get their hands on some of those political dollars that haven't been really available to them in the past, so we'll have to keep an eye on that. One of the other questions that came up during the RAB webinar, which I thought was just such an amazing question I love the RAB members. They're so smart the question that came up we were talking about verticals, categories you might refer to them as, and what we're excited about going into 2025 and beyond, and we showed some examples that were large market examples, and so one of the questions that came up was what verticals are expected to be up or down in small markets as opposed to large markets, and I thought that was an interesting way of looking at the data. So one of the things that we at BIA can do for you is to get your local market intel so actionable insights, you know, based on your local market. So we're definitely here to help you with that. And, in terms of general trends, small markets versus larger markets.
Speaker 1:What I would say going into 2025 is that home services is one of those categories that does really well in mid to smaller markets, even better than in the larger markets. So that includes HVAC, lawn and garden home improvement. So a lot of those you know you might think suburban or urban kind of more on the suburban and urban markets would be using those services, and so those home services is usually a pretty solid staple or a solid base for smaller and mid-market. So that's definitely something to keep an eye on. They will continue to be those staples and will be reliable moving into next year.
Speaker 1:Another opportunity, I think for smaller and mid-market is local retail, so especially clothing stores and, rick, you were just talking about video. So I really think there's an opportunity there for local retail to start embracing some video advertising through CTV and OTT and audio advertising of course, but driving people to those local stores. So, as you were just saying, rick, maybe it's a little too expensive for somebody to buy the whole market, but as we get into some of these geofencing ways over the air and also digitally, it opens up these think about the mom and pop shops that it was impossible for them to think about advertising in the past. But that tail is really really long and you at the local level, in the local markets, have insights and access and relationships like nobody else, and so getting them to start to advertise, I think that's well within your reach and that is a massive opportunity for audio in general.
Speaker 2:I'll add one more thing about CTV and even audio too. Advertising for these smaller businesses Long tail. There's four or five million businesses in the US that advertise. Not all can afford radio or TV but they can afford CTV and they're starting to learn that it's a little bit complicated to buy. But what's happening is some of these big publishers, people who are selling CTV inventory locally to advertisers, are building self-serve tools. So it has been complicated, it's just been sort of a managed service. But now the technology and education has become such that well, if I can buy search, if I can buy social as a business owner or marketer, let me take a look at CTV. And so they're able to start to self-provision themselves with CTV with some self-service tools. That's going to really drive up the demand for CTV inventory and, as popular as there is, there's always more inventory that could be sold.
Speaker 2:So these smaller businesses can afford the media CTV. It's increasingly become accessible to them in terms of being able to understand how to use it successfully, just like device search and social, for example. Now then, if you go to video, it's like, oh okay, now I've got the budget I have to produce that video asset. It's like I don't know how to do a TV ad or even a radio ad maybe. Well, now, with generative AI coming in there, the publishers are saying, okay, buy the media and also we will bundle in creative, send us a couple of pictures, give us a couple of words and then we will use generative ai to produce an audio spot or a video spot for for you, and those are coming out looking clean and pretty compelling.
Speaker 1:So that's the content part of this, and the ability to leverage ai is also another huge tailwind to drive more scale and the kinds of things we're talking about here, nicole yeah, I totally agree with you that, um, these local advertisers or potential advertisers, they need help, they need their hands to be held a little bit and I do think that these local radio stations have those relationships coming or already there to help you to deliver to those clients that might be apprehensive about advertising in media they've never used before. You can help them to get there and showing them the value and the return on their investment will keep them repeating and coming back, absolutely Okay. Thank you, rick, for all of your amazing insights and conversation. This has been a wonderful podcast. I love.
Speaker 1:Doing the webinar with you yesterday and then even taking this time to have some more deeper conversation has been amazing. So, first and foremost, thank you so much for your thoughts and I look forward to more conversations with you as we're thinking about how audio will continue to evolve. So, rick, can I put you on the spot right now and make you promise that, as audio continues to evolve with new and exciting tools like geofencing and geotargeting, will you be there to help us, to educate us and to let us know that this is coming, so that we can be ahead of the game a couple of years out? And you know you promised to share that crystal ball with us right, of course.
Speaker 2:I mean it's audio. I mean the way you're saying it is right and audio is becoming much more capable. I mean you've got over-the-air radio, you've got podcasting, you've got audio streaming, and the multi-platform play into audiences is a trifecta. I think it's going to make audio advertising platforms collectively radio streaming and podcast increasingly more valuable. And we're already starting to see markers. Even people like on a scale of a Mark Pritchard saying man, we need to be heavily weighted, more heavily weighted in audio and in local. So it's starting to happen. And, yeah, we're going to be right there with your forecast team looking at this and making some adjustments. You know we hope for audio.
Speaker 1:Yeah, and my favorite part about all of this and all of this new technology and all of these new tools is that it helps audio to deliver for their clients better than ever before, more efficiently, with less waste, with everything. And so, at the end of the day, I think we're all here to help our clients to achieve their goals. And so, you know, technology is cool and all, but this is actually compelling technology that will help our clients to achieve their goals, which will help everybody. I mean, it just feels like a win-win situation all around, and we look forward to keeping our finger on the pulse and working with the RAB and RAB members more going forward.
Speaker 1:So, again, I just want to remind you that we recently did that webinar with the RAB, and so if you are an RAB member, I encourage you to go check out the full webinar, and if you're not, we would love to help you. If you're interested in getting involved with the RAB or with us, just reach out and we'd be more than happy to help you more information and just to talk about ways in which we can work together. So please don't hesitate. The email is info at BIA dot com and, as Rick promised, we're going to continue to do our forecasts and look into our crystal ball and think about the future of audio. So we look forward to more conversations with you and until then, have a great day, have a great week and have a great rest of the year. Thanks,