Why ZIP Codes Matter More Than TV Markets Now

For decades, local media's value proposition was simple: own the audience in a market and advertisers would follow. But in an era of location data, programmatic buying, and outcome-based measurement, advertisers increasingly care less about DMAs and more about reaching consumers at the ZIP+4 level.

On the latest episode of In the Vicinity, Tim Hanlon sits down with Madison & Wall Managing Director Luke Stillman to discuss why location data has become a scale advantage, how privacy regulations are unintentionally strengthening the walled gardens, and why local broadcasters may need to stop thinking of themselves as the center of the media plan and start positioning themselves as part of a broader, more measurable ecosystem.

Listen to the full In the Vicinity podcast above or get it on Apple Podcasts and Spotify.

Tim Hanlon: Welcome. You are In the Vicinity. My name is Tim Hanlon, your humble and continual host, also the founder and CEO of the Vertere Group here in Chicago. Welcome to the proceedings. Happy to have you along for our weekly sojourn into all things local media this week, joined by the managing director of hugely influential analytics and financial advisory firm Madison & Wall.

His name is Luke Stillman, and together with Brian Wieser, the folks at Madison & Wall are the arbiters of what's truly going on in the ad-supported media space. Their data is the gold standard, if you will, maybe perhaps platinum standard and is trusted and relied upon by many folks in the advertising and media circles.

I've known Brian for many years in and around the ad agency holding company space and all things strategic. And Luke has a wonderful new article that came out last week on the Madison & Wall Substack, which you can check out and perhaps subscribe to. There's a free and a paid layer there.

Just go to substack.com and search up Madison & Wall. You can also find out more about the firm at their website at madisonandwall.com. The article is called Location Data Is Becoming a Scale Advantage, and I had to have Luke on to talk about it, which we will do in a moment's time because it really does get to the granular issue that bedevils much of traditional classic local media and the business behind it.

And that is this increasing reliance or expectation and frankly good enough understanding of location-based and a granular data that almost just passes by the traditional DMA-based or locality-based forms of media to the point where it's really about where people literally are, where their geography is, their zip plus four, and their locations and that kind of stuff.

Getting that local message specifically to them regardless of what media they're watching or listening to, let alone a local television newscast or radio station and the like. It's a really interesting conversation and observation, and we get into the crux of a lot of different issues. Frankly perhaps the core issue that is most challenging to that in the local media space, in particular local television.

We're gonna get into all of the reasons why, what's happening right now, and perhaps where local media, in particular local TV stations can move on from this particular point in time. I think you'll enjoy this conversation and hopefully it'll be an incentive for you to check out more of the wares offered by Madison & Wall.

Here's my conversation with Luke. Please, as always, enjoy.

First, how about some background on you and Madison & Wall and what Madison & Wall does. I know Brian obviously is a legendary analyst in the ad space for a long time. We're former colleagues for a brief time at IPG. What's your background, and how'd you come into this space that is strangely not more overpopulated?

Luke Stillman: So I have a very similar background to Brian. I'm a former Wall Streeter, so everyone at Madison & Wall is a financial analyst first and foremost. And then I was in the agency world at IPG Media Brands for 13 years in their Magna Intel unit until Brian and I finally found an opportunity to work together. So we've known one another for a long time and now we're building something special, I think, at Madison & Wall.

So we're a data and advisory firm focused on the ad industry, and our North Star is tracking where the money's going. So more than what brands are saying or sellers of advertising are saying, we think where people are spending money really reveals their true priorities and what's going on in the industry.

Tim Hanlon: And I know a lot of the founding of this emanates from what used to be a thing in agency holding company space. I too retreated from that world. The agency's now known as part of mostly Publicis Groupe, and for a brief cup of coffee. Maybe we overlapped, I don't know, at IPG where there were these industry analysts that actually followed this, and that was a function of certainly media buying agencies to kinda give clients and prospective clients and frankly the buyers themselves within these agency groups and the marketers that they try to, convince that they were knowing what they were doing about where the world was going in terms of ad spend and that kind of stuff.

Luke Stillman: Yeah, and I think what's interesting is it's absolutely useful for benchmarking performance, for knowing what the world'll look like next year, for figuring out addressable market sizing. But at Madison & Wall, because we're separate from an agency group and we're independent, we have nowhere where we can't just follow the dollars to reveal what's happening.

So we, we talk about agencies, we talk about sellers of advertising, we talk about individual brands. Whatever we think really reveals what's going on in the industry, we always write about it. 

Tim Hanlon: I was fascinated by a piece that you wrote as we recorded this last week on June 5. And that's why I wanted to have you on especially because this podcast focuses on local media and the specifics around, the buying, the selling, the advertising, and frankly just the w- what is local media in terms of content and distribution.

All of it is being, like media generally itself, completely upended by various forces, both seen and not certainly understood fully yet. And you had a particular sort of point of view on location data as being almost a new and maybe not s- obvious sort of scale advantage. How about a little background as to how you came to this piece and stuff?

And did you come at this from trying to get under the hood of the more classic local media environments, or was this more something you were seeing from the digital side of things? 

Luke Stillman: Yeah. I think every quarter we're listening to hundreds and hundreds of earnings calls, slicing the market, and understanding how everybody's pacing.

And so in the first quarter, we saw a number of local players with fine growth, but relatively stable growth. Nexstar grew by half a percent, Gray 2%, Sinclair down a little bit. In context of a market that's growing by 15-plus percent for the last two quarters. So the ad industry is essentially the strongest it's ever been right now, and so we like to figure out, okay where is that money coming from?

Where is it moving to? What are some of those underlying dynamics? And so in the local space for broadcasters, for local radio there is this backdrop of scale-related challenges. So cord-cutting, linear TV erosion, the infrastructure itself of local TV potentially shrinking. For decades, if you're a local car dealership or a hospital system or a regional restaurant chain, you would go to your local broadcast partner first for ad spending.

And now, as that traditional TV base erodes every year, the local players are losing their footprint, and more and more they're moving to geo-targeted digital national platforms. And so I think we came at this from both sides really. Why, what are the challenges for local media, and who are the new competitors that they're increasingly dealing with?

Tim Hanlon: One of the subheads of this p- article is that location-based advertising has likely been pulling dollars out of local media, right? So that's a headline that maybe most people in, shall we call them classic local media environments, probably inherently knew, but frankly were not keen on seeing in print or would be quick to acknowledge.

Yet that seems to be the narrative that's driving why broadcasters, for example, are trying to push for grand- grander scale and M&A and regulatory relief, right? To create larger Nexstars and Sinclairs of the world because of this very precise dynamic of, call it programmatic targeting, giving out what the, I don't know, the boundaries of local media sales have been.

Can you give us a little bit of sourcing on that? Because I think that's probably the thing that's probably coming out of those financial reports mostly, is that where is that outsized growth that you're seeing in all these other places? 

Luke Stillman: Absolutely. The reality is, as a seller of local media advertising, your competitors are not just the Charters and the Nexstars and the Tegnas of the world, but increasingly it's Google, it's Meta, it's Amazon, it's big streaming platforms.

And there are so many areas where there are economies of scale in the advertising ecosystem. It's really hard for sellers of local media to offer that kind of national scale and precise targeting that a lot of these big walled gardens just have intrinsically in their platform. So if you're- Someone like Charter, you, we see them constantly launching new ad tech products to try to offer the same kind of services.

Spectrum Reach Architect for self-service campaigns, or Audience Reach Optimizer, or AI solutions to help generate video ad creative more easily. They have all these systems just to try and level the playing field. But of course, the biggest digital platforms have so many more resources, so much more data, that it's a competitively challenging environment to try and operate in these days.

Tim Hanlon: It seems ironic, right? Because these are bastions of local audiences that have been historically gate kept by a relatively scarce amount of properties, media properties that are serving them, right? But a- as you acutely and astutely note the data sourcers, right?

It's almost giving out where the inventory, regardless of where it's coming from, local included, is almost being more prized for its ability to data to understand specifically who and where and when somebody is consuming. And then the ability to serve a message m- most directly.

That's, that really is a... That's a game changer for a local media proposition that has been about, trust us for the content and the news and information and sports that you trust and know and and want and we'll deliver that to you in that sort of that box that we've normally done.

But now you're really seeing a complete hiving out of that from n- national players that are just basically zip plus fouring their way into all these different media environments. 

Luke Stillman: Absolutely. And if you really zoom in, if you sit down with local business owners, mom and pop shops, local franchises, Main Street businesses, the conversation isn't about audience scale or GRPs or digital impressions.

They care about, when I bought this ad, did my foot traffic go up? Did people come in to the business? And so if you're a walled garden, you can increasingly tie- All that consumer activity to a map view or a navigational data point or a digital transaction better and more easily than it is for a local TV broadcaster or a radio station to do the same thing.

And, for every advertiser, big advertisers, small advertisers, being able to have credible connection between how much you're spending on your advertising and how much you're driving in business outcomes is really the name of the game. And increasingly it's so much easier for big digital platforms to offer the same kind of measurement and attribution that people are used to, spending on walled gardens, spending on digital, shopping online.

So that's really the backdrop, and then on top of that, we've now piled on some additional data headwinds that was what the piece I wrote was about. 

Tim Hanlon: Yeah, so before we get more further into that, why do you think local media has been so slow to evolve their product set to be more incorporative, if that's a word, of location-based data and other, shall we say, micro forms of data that are south of a DMA, right?

Or more, more specific than a designated marketing area to enhance and/or super serve their local finiteness with their media versus just clinging back to, oh you want the New York Metro area buy our TV station. 

Luke Stillman: I think there's several different challenges from multiple angles there.

So number one is I think they've absolutely been trying to do that. So it's not that- stellars of local advertising haven't recognized the challenges. I think it's really complicated to spin up some of those systems. We were mentioning some of the charter offerings. Those are expensive investments and challenging platforms to integrate between one another.

I think the other thing to think about is because local TV and radio has been very similar for a long time, and then in the past five or 10 years has faced this huge additional competitive dynamic that, enter- any advertiser on TV knows that the systems are really hard to change, and brittle to integrate with newer offerings.

All the measurement platforms and everything is- has been built up over decades. And agency processes who are deploying those budgets have their systems that work and are really hard to change year after year. That's why in national TV the upfront has existed forever.

That's why in local TV it's such a relationship-based business with very similar campaigns and processes deployed year after year. So I think all those local media companies would absolutely love to just snap their fingers and integrate more of those super granular data signals into their process. But it's a huge investment at a time when most of their top lines are flat or negative.

Tim Hanlon: The crux of your piece, and by the way, you can go to madisonandwall.com and get a sense of what the firm is about and stuff. This is a paywalled article as we record this, but maybe we'll try to figure out a way to kinda shake out a little bit more of it for a broader consumption.

But the crux of your piece though does turn on this idea of location-based data, right? And I guess my point there is that local media it's not... Local media has the opportunity to ingest loc- location-based data from a number of sources just as much as any walled garden in the digital realm can, right?

So as you astutely put direct con- customer or consumer relationships is really the win here, right? And that location-based data is a huge part of that going forward. I, I guess I'm just flummoxed by why local media can't play the location-based data game just as well as these other entities, and arguably maybe with a better a comparative distinction in that they already understand localism, at least historically 

Luke Stillman: I think there's two angles to this that are important to keep in mind.

Number one is any sort of third-party data sharing comes with platform integration issues, comes with transaction fees potentially, and all of those things add friction for advertisers when they say, "Oh this is an additional expense I'm incurring," and it's a really visible expense to layer on that location data.

Over here in my Meta campaign, for example, everything's bundled into one price, and I'm not really sure what portion is data and what's inventory. So that's typically what we've found more attractive for advertisers. And then the second thing is I think a lot of local media companies were integrating that location-based data, but then what we've noticed is over the past couple years, and increasingly this year, regulatory decisions have reduced a lot of the data availability in the ecosystem.

So even for the local media companies who said, "We need this data, it's the foundation of our ability to compete with these big digital platforms," it's gonna be less available, harder to access, and more expensive going forward. 

Tim Hanlon: And I don't wanna give away the punch of the piece, but essentially, advantage walled gardens, right?

Because they are regulated differently than traditional media and broadcasters tend to have been over the decades, right? 

Luke Stillman: Absolutely, advantage walled gardens. So over the past couple years, regulators have started cracking down on location-based data sharing in the name of consumer protection. So we've seen repeatedly in the advertising industry, regulation that is designed to protect consumers also has the side effect of reinforcing the power of walled gardens.

So regulators, the FTC hit mobile platform, mobile location platforms, like InMarket and Outlogic a couple years ago. They cracked down on some car manufacturers selling location data last year. And then just last month, they wrapped up their big lawsuit against data broker Kochava. And the message from regulators is loud and clear.

It's passive, implied, fine print consent is no longer good enough, that if you wanna share your location data, you have to tell consumers using a weather app or a gaming app, "Hey, we're using your data, not just to run the app you're using. We're gonna sell it to a third party." And of course, most consumers don't give that consent, and the existing data landscape relied on that indirect sort of hidden consent from consumers.

So on paper, those regulations were designed to protect consumers from having their data exploited, but in practice, the biggest platforms already have a ton of data that they don't need that kind of shared third-party location data. They have their own in walled garden location data that's good enough.

And also, the cost of complying with regulation is typically high enough that only the biggest tech companies can afford to do it. So we've seen it repeatedly with GDPR, with Apple's app tracking transparency. All these changes in the name of consumer privacy also had the side effect of just entrenching the biggest platforms more and more.

Tim Hanlon: All right, so here's the windup then. I- is the- classically defined local media doomed? And is there any way where it somehow can fight back for relevance or r- access to this clearly very lucrative data that's very important to the walled gardens? How can local media traditionally defined, if you will, fight back or compete?

I guess I would ver- venture to say that I'm not sure that Nexstar buying TEGNA to scale up with more ownership of stations around the country is necessarily the answer to that problem. What do you think? 

Luke Stillman: We agree that just scaling up, it- you're never gonna scale up as far as some of these big digital platforms.

If every traditional local media company combined into one, they still wouldn't offer the same kind of scale that some of the digital platforms do. So we think the path forward is more about, not how do we just directly compete with the big scaled walled gardens, but how do we position our offering as complementary to those?

Maybe instead of spending 100% of your budget on a big walled garden, you should take the last 10% and instead deploy it on a channel that's gonna supercharge that walled garden spend. Layer on additional touchpoints, higher funnel exposure for consumers. The other thing that we also think makes sense is for a lot of local media companies to partner with commerce platforms, for example, to be able to offer some of that same credibility of measurement and say, "Hey, we can dig all the way down to what your consumers are buying."

And we can tell you where they were, they went into your store, plus what they're buying online, and in that way combine the offering. I think if they continue to try and compete on a standalone basis, then it will just be a slow decline and erosion year after year. 

Tim Hanlon: I do think, though, I wanna sort of tag onto that. So I do think, though, there is an element of, for lack of a better word, hubris that maybe is attached to the incumbents of local media, right? And in particular, I think broadcast television local television, which is probably the last kind to hold out, if you will, from, digitization, so to speak and more specificity of inventory capabilities and that kinda stuff.

We were still in a world where local TV stations are looking at CTV inventory as an add-on to a linear buy that you initiate first, and then through partnerships we will find similarly targeted CTV inventory across the, what's available out there that may or may not be our own inventory, right?

And that's, but I would argue that's like a quaint notion because I think part of what you're describing maybe as a solution set here may be the need to- expect more the reverse of that, maybe where local broadcast television inventory and what it's capable of is almost maybe part of a bigger whole of choice versus it being the front door as it historically has been.

Am I wrong or right or sideways on that? 

Luke Stillman: No I absolutely agree with that. I think the one thing we've really heard from advertisers and that we've seen in the way they deploy budgets and make decisions is that convenience is a huge part of what shapes their budget. We see that in so many ways across the ad ecosystem.

We see it in spending going through these automated AI-powered platforms like Google's Performance Max and Meta's Advantage+. Something that will just take all the toggles out of their hands and handle the campaign for them. So I think being able to integrate some of those local advertising inventory opportunities into a broader offering clearly moves the needle with marketers, especially the size of marketers that are typically executing local media campaigns.

Tim Hanlon: Yeah. Softening those walls, though, I think is gonna be a hard effort to operationalize because I think there's so much distrust and so much fear that once you loosen the gates a little bit it's just gonna be a deluge. But, I, I'll end with this one, and I- I'm sure you've got an opinion too.

I remember this conversation, two years ago maybe, three years ago, where people were worried or concerned or certainly questioning how the television thing was gonna go in the face of CTV and digital targeting and that kind of stuff. And th- there were two camps. It was like television may be the last bastion and probably will be largely unscathed and be able to hold its own in terms of upfronts and scale and national and all that kind of stuff.

Or, is everything gonna be CTV targetable regardless of where the video is coming from, broadcast included? I don't know. It feels like the latter is f- really taking hold, and I'm not sure everybody in the TV business either understands that or wants to believe that. And there is opportunity amongst that if people can just maybe acknowledge that's where it's going.

Luke Stillman: 100%. We don't wanna be doom and gloom for local media. We would say, again, we talked at the top about some of the first quarter results, which were flat. We forecast where the market's going, and we think there'll be just as much local TV money spent in 2030 as there was last year in 2025.

So it's not a disappearing space. It's stable in the context of a market that's growing 15%. So it's relatively losing out, but it's not like there isn't still billions and billions of dollars of local TV money out there. But yeah I do think that with increasing digital competition, with performance TV platforms like the Mountains and the Vibes of the world also starting to lean into the local space, that we think the best idea is absolutely to invest in new products, new tech platforms, new partnerships, and for any seller of local media, they're never gonna be in a stronger position than they are right now if we look into the future.

So now is certainly the time to lean in.

Tim Hanlon: All right, we will leave the conversation there for the time being. Thank you again to Luke for making time for us, and of course to Brian Weiser, his colleague in crime there at Madison & Wall for getting us set up and put together for this chat. And let's make a note to have either or both of them back at some point in the near future.

Lots of good stuff to be found from the folks at Madison & Wall, and you can find out more about them and what they do, and perhaps how to subscribe and get some of this goodness to you for i- in the either free or paid environments. You can check out the website at madisonandwall.com. A little background there and where to find out more info, and you can also check them out on Substack, substack.com.

Just search up Madison & Wall, and you can get either the free layer or the subscription layer. And the free layer includes a Saturday summary, which you can subscribe to, basically a quick summation of all the great research and analysis that came out during the prior week. And there's also a podcast that after a bit we'll even be on someday wink.

Nod. No, no quid pro quo. That's fine. They don't have to have us if they don't want us, but we'd be honored of course, someday, some way. Thank you to our friends at TVREV of course, including the delightfully talented Melissa Hourigan for all the work that she does behind the scenes, technical and otherwise.

She knows what we're talking about. Jason Damata of course, who also puts a fine bow on all of this stuff, Jessika Walsten, and all the other folks there at TVREV. Tvrev.com, check them out. And thank you of course to the sponsorship support of our friends at Madhive, including of course Stephanie Nerby, and the CEO there of course, our occasional guest conversationalist, Jim Wilson.

Lastly but not least, our friend Jerry Payne in metropolitan Atlanta for all of his knob twiddling this week and putting all these pieces together to make us sound nice and smooth and listenable. Thank you as always, and thank you always for listening, as always for listening, and we'll see you next week.