During my 2 and a half years of working with independent radio operators nothing has gotten my attention more than the fact that they use the "ostrich approach." If this article does not convince you that you need to add digital to your arsenal, then we don't want to work with you! Townsquare now generates 1 out of every 4 dollars from digital because they are focused and every seller is involved!
Article re-printed from InsideRadio
On its fourth quarter earnings call, Townsquare Media revealed that it now derives 28% of its revenue from sales of digital ads and services. New information culled from its latest investor presentation sheds a light on how the small and medium market operator is able to outperform the industry average, which is less than 10% of revenue coming from digital sales.
The company’s fastest growing digital product is Townsquare Ignite, its digital programmatic technology platform. Built in 2014, it offers digital advertising not just on its own websites, but from third parties across the web. It does this by integrating with 1,000 ad exchanges with access to 250 billion audience impressions a day. Last year Townsquare Ignite had 1,800 active campaigns running per month, up 60% from 2017. More than just banner ads, Ignite offers a slew of different ways for advertisers to precisely target audiences, including advanced audience segments, contextual advertising, re-targeting, video, social, geolocation and other methods.
While Ignite is its fastest growing digital offering, Townsquare Interactive (TSI) is the largest revenue contributor to the company’s digital business. This is the unit that provides digital marketing solutions to small and medium sized business for a monthly subscription fee. As of December 2018, it had 15,350 customers, an increase of 2,950 from December 2017. They use it for search engine optimization, social media management, analytics, insights and other marketing services. Last year TSI fostered $55 million in revenue.
The company has built individual apps for all of its stations, which are integrated with Apple CarPlay and Android Auto and respond to voice activation. It also has developed its own data management platform that aggregates all of the info it has collected on its users, which can be segmented to target ad campaigns for advertisers.
Townsquare’s over-riding strategy involves moving customers and audience across complementary media and marketing platforms: 321 local radio and 330 local websites in 67 markets; digital ad technology and marketing solutions; and live events. Despite selling North American Midway Entertainment (NAME) last year for less than one third the price it paid for the concessions provider, Townsquare is still very much in the live events business. It stages 200 events a year, including four major multi-day music festivals, attracting one million attendees.
While Townsquare has no presence in the top 50 markets, it has turned what could be seen as a negative into a positive. Markets like Amarillo, TX; Grand Rapids, MI; and Yakima, WA offer a “more attractive competitive landscape,” where audiences are “starved for high-quality media and entertainment experiences,” the company says in the presentation, where there is limited competition from ad tech and digital marketing companies. Part of Townsquare’s pitch is that it reaches millions of people in the “heartland.”
As is typical of investor presentations, there’s no shortage of bragging rights: The company boasts of having the No. 1 or No. 2 radio position in 65 of 67 markets. And Townsquare is coming off a strong financial performance in 2018 where pro forma revenue grew 4% and pro forma earnings before interest, taxes, depreciation and amortization (EBITDA, a metric for cash flow) rose 6%. – Paul Heine