Galaxy Communications

Radio stations have enjoyed a lengthy legacy of pairing their call letters with local concerts and national tours that roll through town. Today, however, stations have come to dig for—and mine—the off-air gold that comes with adding sponsorship and promotional opportunities to their own expanding portfolio of proprietary events. It’s redefining the breadth of “non-traditional revenue.”

Many broadcast groups now devote entire divisions to live events, while fashioning sophisticated campaigns that increase the bottom line with, at times, double-digit gains.

“Radio marketing has come a long way from hanging crooked banners on concert stages,” says Pam Levine, a consultant with Galaxy Events, an arm of Galaxy Communications, which owns 14 radio stations in Syracuse and Utica, NY. “Experiential marketing has become an important way for businesses to reach customers in our communities. There are situations where the advertiser will say, ‘We don’t want to do radio at this time,’ but we offer a menu of events which might be more in line with their goals. We’ve developed business relationships with event clients that we’ve been able to morph into radio advertisers over time, and vice-versa.”

Proving an event’s worth to those clients is also quantifiable—both through the tangible presence of station listeners and behind the numbers. According to The Brand Experience Effect study from Momentum Worldwide, 65% of consumers recommend a brand after attending a live experience associated with the product or service.

Veteran radio consultant Alan Burns recognizes a sea change as live events have become such an integral component of radio station operations. “Having on-air, digital and events makes an operator a marketing company instead of a transmission vehicle. It’s essential for stations, clusters and companies to develop both the events and digital sides, because that’s where the growth is,” he says. “Nothing drives traffic or people like radio, so having digital and events components takes great advantage of radio’s big megaphone. You’re open to more advertisers with more products.”

For Cumulus Media, alliances with the Grammy Awards, the ACMs and the American Music Awards now provide exclusive on-air, on-site and online activations for advertisers—uniting its radio audience and sponsors. “Our partnerships with pop culture’s biggest award shows enable our brands to connect with today’s top recording artists and their passionate, socially engaged fans,” says Tommy Page, Cumulus Media’s senior VP of Brand Partnerships. The radio group’s Westwood One Backstage provides proprietary access for advertisers “to activate backstage socially fueled moments that are once-in-a-lifetime experiences for fans, and are then shared across social media because they’re truly awesome—and driven by emotions. This absolutely brings brands and fans together.”

The 309-station Townsquare Media—which commandeers up to 550 live events a year—has become a force in the live space among broadcasters, with 32% of its 2015 revenue being generated by events, up 10.1% from 2014. “We approach the business slightly differently from many other radio companies that dabble in events,” says Dhruv Prasad, executive VP of live events. “It’s not an add-on; it’s integral to everything we do.”

Also, strategically speaking, Prasad stresses that the division’s focus with events is on consumers/listeners first, and then potential sponsors. “When we build new events and look to create a new tour, the first question we ask is: Can this business support itself from ticket sales, first and foremost?” In fact, he says, the “overwhelming bulk of our $159 million in 2015 from live events revenue is consumer dollars as opposed to advertising dollars.” The reasoning is sound: “If we can grow great brands and great experiences that have strong consumer attachment, then we can introduce advertising and sponsorships to that intellectual property as time goes on.”

Galaxy’s Levine sees the logic—and the results. “On a local level, nothing beats one-to-one marketing, and as the years have gone by, experiential or event marketing has gone from being a fringe tool for local clients to being a very important tool,” she says. “Working with our event team and having a positive experience can often be an entrée for local events clients to go on to become radio clients.”

And for the occasional naysayer advertiser who may not yet “get” the lasting impression that event sponsors make with consumers, Burns offers one potential solution: a drive-by. “Take one of those ‘nobody listens to radio anymore’ business owners and drag him to your event to show him the crowd, then ask where all these people heard about the event. You know the answer: from the power of your radio station.”