WASHINGTON, D.C. — Addressable advertising has emerged as the No. 1 reason why brand managers and CMOs are putting their dollars into local digital media and eschewing tried-and-true media such as radio, regardless of studies showing strong ROI and sales growth.
But, what if an over-the-air signal could “geo-target” an audience, thus making advertisers a bit happier with their newfound ability to hone in on a tighter target of consumers? One company has the technology to accomplish this. It simply needs the FCC to make “one simple rule change” to put the wheels in motion.
The company seeking to introduce its “ZoneCasting” technology to radio is already in action in Washington. GeoBroadcast Solutions recently met with key Commission regulators, including Audio Division Chief Al Shuldiner and Senior Deputy Chief Jim Bradshaw, in addition to FCC Chairman Ajit Pai’s Media Advisor, Alison Nemeth Steger, and members of Congress and staff.
The meetings, held late last week, saw GeoBroadcast executives Chris Devine, Rick Bonick and Bill Hieatt travel from their Chicago offices to explain their proposal, which they argue could generate up to $750 million in additional revenue for local radio broadcasters.
Small businesses are the focal point of the ZoneCasting push. With ATSC 3.0 ushering in a platform for addressable advertising, radio is poised to become the lone mass medium that cannot satisfy this growing demand.
Enter GeoBroacast, which has developed a technology that allows radio stations to deliver locally-targeted news, weather, traffic, emergency alerts, and advertising information.
There’s just one hitch, and GeoBroadcast says it involves a “minor” FCC rule. It relates to what programming FM booster radio stations can transmit.
GeoBroadcast has asked the FCC to amend this rule to permit booster radio stations to originate some of their own programming.
For some, this represents a major rule change — one that would involve the introduction of a Notice of Proposed Rulemaking (NPRM), complete with a comment period and reply comment period. Such a request, given Washington, would take months to reach a vote.
That could be why GeoBroadcast wants to put their growth plan in motion now. As they see it, this “minor” change in the rules would empower radio broadcasters to insert localized content at specific times in specific areas of their community.
“One rule change is all that is necessary—no changes or waivers of the FCC’s rules on interference are required,” GeoBroadcast claims.
Hence, it is urging the Commission to issue an NPRM to update its rules and allow broadcasters, on a voluntary basis, “to enjoy some of the same advantages that TV broadcasters have gained from Commission approval of ATSC 3.0,” the next-gen TV broadcast signal that opens up addressable advertising for over-the-air television.
But, some wonder if it would indeed create a new level of interference — a kind of cacophony that sees one booster bumping up against another booster. Current interference rules involve one licensee and another licensee who claims their signal contour has been infringed upon. If one company owns an infringing signal, there is no breaking of the Commission’s rules.
In a mountainous area, where boosters wouldn’t abut one another in relatively close proximity, such concerns may be muted. But, in areas with flat terrain, what would happen?
Additionally, boosters have traditionally been accepted as “fill-in” signals offering stations the ability to cover areas that their main signal contour should reach but cannot due to terrain and other geographical obstructions.
A geographically-targeted mini-signal within a licensed signal contour may be a hard sell for some, especially if it introduces the use of boosters across a big market where 100kw signals cover multiple counties, such as Miami-Fort Lauderdale, Dallas-Fort Worth or Los Angeles.
A HYPERLOCAL ARGUMENT
GeoBroadcast says the benefits of a rule change on program origination from FM boosters are numerous.
It compares these benefits to the FCC’s 2017 order authorizing the voluntary deployment of ATSC 3.0. “Broadcasters would be able to offer advertisers the ability to reach a smaller segment of a station’s community of license,” GeoBroadcast explains. “This means that consumers would be subject to fewer advertisements not applicable to them, while small businesses would be able to reach their desired audience at a significantly reduced cost.”
In theory, it may sound appealing to CMOs, ever-eager to reduce their advertising budgets while maximizing their marketing efforts. But, would radio companies support a plan that could lower their rate sheet? Or, would this simply open up a greater pool of advertisers and reduce remnant inventory?
The latter is part of GeoBroadcast’s argument for a Commission NPRM allowing it to deploy ZoneCasting.
How would a broadcast company monetize its assets by “carving up” an FM station’s signal? RBR+TVBR used Cumulus Media’s Hot AC WRQX-FM “Mix 107.3” in Washington as a test case.
WRQX enjoys a Class B facility with 19.5kw that shoots a strong signal over the National Capital Region and much of Baltimore. Mix 107.3 also has a city-grade signal in the Maryland capital, Annapolis, and can be heard in the car up to Frederick, Md.
If Cumulus were to introduce booster signals to WRQX, several questions arise. First, why would WRQX need a booster, when its signal contour is so strong? Is the quest for greater advertising avenues equal to the need to “fill in” an area where its signal is licensed to serve but has trouble reaching? Would the introduction of several boosters require WRQX to reduce power from its Tenleytown tower just down the street from its 4400 Jenifer Street offices and studios? If not, how would interference with itself be accomplished?
Let’s ignore those questions and pretend that ZoneCasting has been successfully introduced to Mix 107.3. Suddenly, Cumulus can target Mix listeners in Montgomery County, Md.; the District of Columbia; and Northern Virginia — opening up three distinct advertising windows and theoretically widening the pool of advertisers.
Further, Cumulus now has the ability to start selling Mix to Baltimore market advertisers, as it could put geo-targeted advertising in Howard County and in Annapolis. A booster at Baltimore-Washington International Airport and even the Inner Harbor could be had.
What investment would Cumulus need to make, should it choose to launch ZoneCasting? That’s not clear. But, GeoBroadcast notes that listeners “will not need to make any upgrades or purchase any new equipment” to enjoy the benefits.
Still, what happens if one is driving from Gaithersburg to downtown Washington, as many do each morning? Would a presently strong signal be in danger of corruption from itself?
No, argues Bert Goldman, a consulting engineer to GeoBroadcast. Because the rule change allows a broadcast to voluntarily employ ZoneCasting, it will do so “only if they are convinced it will not raise technical issues and is good for their business and their community.”
Much of the details of GeoBroadcast’s proposal are contained in an ex parte presentation filed with the FCC on November 29. The 86-page presentation is supported by detailed studies from BIA Advisory Services and Edison Research.
How so? GeoBroadcast used BIA data that show radio missing out on a projected $75 billion in location-based advertising revenue that is being enjoyed by direct mail, location targeted mobile, and out-of-home outlets.
The deployment of ZoneCasting could incrementally generate up to $750 million dollars for local radio broadcasters, according to a conservative model developed by BIA.
Meanwhile, the Edison Research survey used shows that 77% of respondents would pay more attention to ads on the radio if they were for business or products in their local area. Some 72% would listen to radio more often if commercials were better targeted to their local areas.
“ZoneCasting is architected to deliver hyperlocal content, while ensuring a synchronized broadcast that presents a near-seamless experience for radio listeners moving through a market,” said Hieatt, GeoBroacast’s Chief Technology Officer. “The benefits for radio broadcasters, who face increasing competition from streaming and multimedia services for audience share, are enormous from a revenue-generation and audience engagement perspective. Advertisers benefit by reaching the population they desire at a significantly reduced price, and consumers receive public safety, news and other content that matters most to their lives.”
Again, the significantly reduced price may be the single biggest deterrent from getting the support of the radio industry’s biggest and most influential players on board.
HOW IT WORKS
GeoBroadcast’s visit to the Portals is part of a renewed effort to jump-start a plan in the works for nearly seven years. A Rulemaking Petition filed by GeoBroadcast in April 2012 first sought Commission approval to amend Section 74.1231(i) to permit, but not require, booster radio stations to originate some of their own programming in such a manner that localized content could be inserted at specific times and otherwise retransmit the primary station signal — rather than offering an entirely different programming skein and creating a whole-new radio station.
ZoneCasting systems use a network of synchronous FM booster or cellular transmitters to originate and insert programming separately from the primary FM station and transmitter. The technology uses lower-power and lower-height FM transmitters that operate on the same frequency and within the service contour as the primary transmitter. Since the booster transmitters utilize the same channel frequency as the primary station, broadcasters operating on adjacent channels are unaffected by the ZoneCasting broadcast.
“GeoBroadcast Solutions seeks only this one very defined rule change, as no other changes are required based on the careful architecture of ZoneCasting solutions,” said Hieatt. “We applaud the FCC for their continued diligence in reviewing the business benefits and technical details of ZoneCasting systems, and look forward to the commission’s response to our proposed rule change for the delivery of geo-targeted content.”
It all comes down to one rule change — one the FCC and Congressional leaders may heavily scrutinize.
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