Adam Candeub, DCNF
How did Big Tech companies like Google and Facebook become the behemoths they are today? The answer is unsatisfyingly simple: targeted advertising. Google and Facebook built their fortunes in part on the backs of local media — siphoning the ad dollars from local media, like radio stations in small-town America.
Big Tech platforms take your private data to target their ads in highly sophisticated ways. This includes geotargeting, where they serve ads based on demographics or geography. Silicon Valley’s advantage is not just due to its technology, but a more favorable regulatory environment. Google and Facebook face almost no regulation on advertisements while older telecom properties were heavily regulated by the Federal Communications Commission (FCC).
The Trump administration made important regulatory reforms to allow other communications mediums to compete. His FCC Chairman Ajit Pai implemented rule changes to allow broadcast television to geotarget ads. He also signed legislation helping ISPs compete with Silicon Valley on online advertising.
However, the FCC still has legacy regulations that bar broadcast radio stations from geotargeting — even though virtually all other mediums are allowed to. While online ads are directly tailored to each individual user, a radio station in a large market is serving the exact same ads from the city to the suburbs and the exurbs.
Between 2006 and 2020, radio industry ad revenue imploded, falling from $18 billion to less than $10 billion. Over that same period, Google’s revenue exploded by a whopping 1,622%, from $10 billion to over $180 billion. About $19 billion of this money comes from local ads.
In 2020, Chairman Pai initiated the process to level the playing field and allow radio stations to run geotargeted ads with unanimous bipartisan support. Importantly, the FCC proposal would make geotargeting entirely voluntary. No station would be forced to sell targeted ads, but they could do so if they choose.
Moreover, unlike the targeted advertising that ISPs and Tech Companies use, this technology does not involve any tracking of personal information or listening history. In sum, the Zonecasting is a largely apolitical issue, which would level the playing field to help the distressed radio broadcasting industry compete in advertising against other mediums by creating a fairer regulatory environment.
Some of the larger broadcasters oppose the reforms because they can already geotarget their satellite and digital streaming businesses, which they are focusing most of their new investment in.
While this is not a partisan issue, conservatives have famously thrived on talk radio once government regulations were removed. As the New York Times noted, “A dozen of the top 15 shows feature conservative or libertarian hosts,” but the medium is threatened by “a decline in ad revenue and competition from new mass media forms like podcasts.” Thus, allowing talk radio to better compete against other mediums on ad revenue will benefit conservatives.
It was therefore surprising that some conservatives are opposing the Trump FCC’s proposal by arguing that it would somehow harm conservative radio and benefit Big Tech. They suggest that “corporate America could start picking and choosing what sections of town they advertise in for the first time ever, thereby taking millions of dollars out of broadcasters’ hands,” and thus that money would end up in Big Tech’s coffers.
As former President Donald Trump’s telecom adviser who led the last-ditch effort to fight Big Tech censorship when these rules were first proposed, I can say these arguments invert reality. Advertisers are willing to pay for better targeted ads, and often it only makes sense to buy advertising if it can be more narrowly targeted.
For example, a local restaurant in a large metropolitan area may not want to pay for advertisements to people who live 100 miles away, but would advertise if it’s geotargeted to those who are listening closer by. Thus, BIA Advisory Services, the gold standard in radio industry data analytics, estimates that by 2026 geotargeting would increase radio ad revenue by about $500 million.
Additionally, the idea that woke corporations would boycott exclude areas to harm conservative talk radio makes no sense. If they wanted to harm conservative talk radio, they can (and unfortunately have) by simply boycotting the shows themselves.
The FCC’s proposal is a commonsense regulatory reform, which will help the radio industry fairly compete against TV and Big Tech, which in turn, will benefit conservative talk radio.
Adam Candeub is a law professor and director of the Intellectual Property, Information & Communications Law Program at Michigan State University. He served as deputy associate attorney general and acting administrator of the National Telecommunications and Information Agency under President Donald J. Trump.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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