Transforming a radio company into a multi-platform local media and marketing solutions provider requires more than just cobbling together random digital assets and trying to sell them. Radio’s top-performing digital companies have invested in building a full-service menu of sophisticated digital products that can compete with any digital marketing agency, while also providing extensive training to their sales forces. The results, in some cases, are stunning.
How does a company become a digital over-achiever, outperforming the industry average in the portion of its total revenue derived from digital? Inside Radio interviewed top execs at two companies that, according to Borrell Associates, meet this definition.
For these and other top digital performers, digital sales go far beyond merely selling streaming audio pre-rolls and website banner ads on their digital assets, to include a range of digital marketing services. “Our approach is to offer advertisers customized solutions across our owned and operated radio and digital properties as well as via the full suite of 2060 Digital products and services,” says Steve Goldstein, Senior Director, Digital Sales Strategy at Hubbard Broadcasting. 2060 Digital is the company’s digital services division that launched in January 2012 in Cincinnati, before being replicated in all of the company’s markets in November 2014. It allows Hubbard to provide complete marketing packages designed to meet an advertiser’s specific needs. “For example, if an advertiser needs everything from a website or landing page plus the marketing services to drive traffic and leads, we can do that,” Goldstein explains. And for those that already have existing digital assets, Hubbard can “build a customized plan that incorporates only the services needed to accomplish their marketing objectives.”
Similarly, Townsquare Media strives to offer businesses a comprehensive suite of digital products. By including digital offerings in all of its radio and live event sales pitches, more than 70% of broadcast clients buy more than just broadcast ads. “Although we have a wide breadth of advertising solutions across broadcast, digital and live events, they all intersect and operate in the same local market ecosystem, which allows us to focus on super-serving our local clients and helping their business grow,” says Bill Wilson, the former AOL exec who took over as sole CEO of the company earlier this year.
Key to that success is Townsquare Interactive (TSI), which provides digital marketing services to 16,200 small-to medium-sized businesses. The segment is on track to deliver more than $50 million of revenue in 2019, and $100 million within the next three to five years. In addition, Townsquare Ignite, the digital programmatic ad platform that launched five years ago, will approach $50 million in revenue and is the fastest growing division of the company.
These investments have allowed both broadcast groups to rapidly grow the portion of total company revenues derived from digital. At publicly traded Townsquare, that number exceeded 33% in first quarter 2019 – triple the 10.7% industry average, according to the Radio Advertising Bureau and Borrell Associates. Privately held Hubbard, which Borrell also ranks among the upper echelon of digital performers in radio, keeps its numbers closer to the vest. While Goldstein declined to provide specifics, he concedes “digital as a percent of revenue has grown sharply over the past few years.”
New World Of Possibilities
In addition to driving topline revenue growth, offering a full suite of high-demand digital services can help cultivate business with non-radio advertisers and, in some cases, up-sell them into higher margin broadcast inventory. “Digital has opened up a whole new world of possibilities, quite literally,” Goldstein insists. No longer confined just to the markets where it owns broadcast stations, Hubbard’s digital products allow it to reach any audience – anywhere. “We’ve seen quite a bit of success here in the U.S. as well as internationally,” Goldstein continues. Case in point: A Hubbard sales rep struck up a conversation with the person seated next to her on an airplane while heading off on vacation. It turns out the passenger is a business owner who the sales rep ultimately engaged in a digital marketing project in three non-Hubbard markets.
Townsquare, too, increasingly uses digital to drive new business prospecting and client cultivation. “Digital is the door opener,” Wilson believes. The company built proprietary technology that equips account execs with info on the specific strengths and weaknesses of the prospect’s current website and their digital advertising effectiveness. That gives them a legit business reason to call on a new client and to offer something of value in that crucial first meeting. “This has been a game changer for us over the past 24 months where, rather than leading with broadcast and asking if they also want to include our digital products, instead we start with a valid business reason rooted in digital to call on a new client and then do a very thorough client needs assessment with the client,” Wilson elaborates.
You Need Schoolin’
This total solution approach requires companies to provide extensive training to their sellers. Hubbard schools its sales staffs extensively on digital, radio and marketing in general. Goldstein declined to provide specifics of that training, calling it part of the company’s “secret sauce.” But it has led to an evolution in how AEs are perceived and what they deliver on their business card. “We don’t have radio sellers anymore,” Goldstein stresses. “Everybody sells everything… they’re now marketing professionals.”
Townquare has also redefined the AE’s role. A few years ago it started an in-depth training program, dubbed Townsquare University, to on-board all new sellers and offer courses on existing and new sales components for tenured sellers. Each week there is practice training on a dedicated discipline and the class doesn’t move on from that topic until everyone in the class has mastered it. “Having world class solutions for clients is meaningless without world class sales training for our account executives,” Wilson contends. In addition to a sales force of marketing consultants trained to sell digital, broadcast and live events, Townquare also employs digital sales experts for TSI and Townsquare Ignite. Of the 500 employees at TSI headquarters in Charlotte, NC, 130 are dedicated TSI sellers who often refer clients to others in the company for advertising and marketing solutions in other digital areas as well as broadcast and live events.
As Townsquare continues to transform what started as a portfolio of traditional radio stations into a multi-platform local media and marketing solutions company now focused on markets outside the top 50, business is booming. Wilson says the company has had more seven figure deals close in the past six months then in the past six years, inspiring a new mantra: #HowHighIsHigh.
Making The Transformation
Not every company in radio is achieving the level of digital success enjoyed by Hubbard and Townsquare. But some are moving aggressively to rope a larger share of available digital dollars. According to Borrell data from 2018, 6.4% of Beasley’s’ revenue is from digital. To improve its digital performance the company has made significant investments during the past 6-7 months in infrastructure, new hires, products and training, while working with Borrell in what CEO Caroline Beasley calls the company’s “ongoing transformation from a pure play radio company to a diversified audio-focused media and digital entity.
“We needed a cultural shift to make sure everyone is on the same page,” Beasley explains. Last year Beasley rolled out aggressive digital revenue goals to the company’s market managers. But before big dollars can flow, there has to be desirable digital content to monetize and that’s where the company has been focusing efforts. A corporate digital team has been recruited, led by Lori Burgess, who was named Chief Digital Content Officer in January. “First you have to make sure you have the right content in place and then drive people to the sites or stations and then you’re able to monetize them,” she reasons. And while Beasley hasn’t built a full-service digital agency like Townquare, Hubbard, Entercom and others, it is offering many of those digital marketing services to clients through partnerships with third party vendors. “We offer a good complement of services; some are third party services and some are O&O products that we’ve developed.”
More than just taking digital classes, Beasley’s training also requires every account exec to pass a digital exam. “We’re all optimistic about where we’re going,” Beasley says. “It’s a really exciting time.”
The Metric That Matters
Borrell began tracking the percent of revenue derived from digital at local media companies in 2005 and it’s now widely quoted today as a benchmark of how well—or poorly—a company is doing in terms of progress toward becoming more digital. In 2008, no local media company was getting more than 11% of its revenue from digital and the highest percent for a radio company was Emmis at 4%. But those numbers have grown considerably in the past decade. In 2018 seven local media companies attributed more than one third of revenues to digital.
While an important metric, CEO Gordon Borrell says it doesn’t take into account how well a company might be progressing toward a much more important goal: Becoming such a marketing powerhouse that both digital and core-product sales are growing. A more important digital metric, he contends, is share of addressable digital dollars, which is the sum of all digital advertising sold by all locally based media in the market. “Knowing that and staying focused on increasing that share will get you ahead a lot faster,” he says. – Paul Heine