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How Geo-Zoned Radio Advertising Poses a Threat to OOH Revenues

Would Radio Zone Casting Change the Balance of Ad Dollars?

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On The Air

Geo-Zoned Advertising for Local Radio Stations Could Drive Millions in Revenue Growth.

One of the basics in selling OOH, Billboards 101, if you will, is understanding the strengths and weakness with the competition.  No Virginia, the other OOH companies are not the competition. Its other media such as radio, TV, print and online. In our OOH 101 classes, we learn early on one of the advantages of OOH is geo-targeting.
No wasted coverage for billboards as in broadcast, particularly in larger diverse markets. Radio really takes it in stomach on this point. It’s the equivalent to a debilitating body shot in boxing. Radio is petitioning the FCC to take away the body blows by obtaining approval of Geo-Zoned broadcasting and the resultant objective, geo-zoned advertising. 

A map of the NYC market depicting potential geo zoned broadcasting

According to the BIA Advisory Services,  an authority for data-centered research, analysis, consulting and valuations for the local media industry, radio could see a remarkable difference in revenues if the FCC allowed them to offer zoned broadcast service.  The BIA estimates the ability for local radio stations in key markets to offer zoned advertising could lead to between $180 million and $750 million in incremental annual revenue for these stations by attracting new advertisers.

6 Advantages of zoned broadcast coverage according to BIA.

Zoned broadcast coverage areas for local radio stations would help create:

  • Coverage areas for geographic zones inside markets crossing state or city center boundaries.
  • Zoned radio broadcasting provide access for smaller advertisers currently priced out of radio.
  • New revenue opportunities for local radio broadcasters desperately seeking growth.
  • New programming and service models for audiences.
  • Spanish and other language programming
  • Additional geo-targeted services (e.g., for public safety, alerts and warnings, PSAs, weather, traffic.)

“Radio stations in their local markets, are challenged to serve diverse geographic communities of interest inside their main coverage zone with those signals crossing state lines, major city centers, suburban communities and other socioeconomic centers.” Other media like #OOH, can provide geo-targeted or
geo-fenced zoned services.  Removing the barrier by the FCC would allow radio stations to better serve audiences and advertisers. One of the competitive advantages OOH has enjoyed for many years would be gone.

Removing the barrier by the FCC would allow radio stations to better serve audiences and advertisers. One of the competitive advantages OOH has enjoyed for many years would be removed.

Is this an area where the Outdoor Advertising Association of America, OAAA, might help the OOH Industry by submitting comments to the FCC objecting to the Radio petition? $180 to $750 Million is a lot of dollars.  No doubt some of it would be taken away from OOH. Protecting the OOH Industry’s revenues in events like this, should be as important a lobbying effort as direct legislative threats.  

See the full study ⇒here.

 

 

 

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