In the most recent issue of Radio Ink Magazine, Townsquare CEO Bill Wilson is our cover story. Wilson has been part of Townsquare since its founding in 2010. He became co-CEO in 2017 and was named sole CEO this year.
Wilson is racking up one digital success after another. And in our interview we got into specifics about the Townsquare digital strategy. Here’s an excerpt from that interview.
Radio Ink: How have you have gotten the company so successful at digital?
Wilson: First step is building a great team. The assets and brands were always there. We had great talent on the air, and the best sales team in every one of our markets in terms of size and quality. We have great local leadership. We have a great strategy, but that means nothing if your teams are not executing. The execution is coming from all of our local market leaders, division leaders, and their teams. One of our core tenets is “Continue to train until you can’t get it wrong.” A lot of repetition. We are purposefully not operating in the top 50 markets because of the strong connection our on-air talent has to the community, as well as the lack of competition on the digital front in particular with our solutions.
When we have solutions like Townsquare Interactive, which is our marketing solutions company on the digital front, and Townsquare Ignite, which is our digital programmatic offering, combined with the strength of our own websites and social channels, we’re generating strong digital results. I haven’t seen any competition actually operate with in-house solutions in the markets we operate in to offer those digital solutions to clients. Rather, I have only seen local competitors in radio, TV, and print leveraging third-party solutions — which creates customer service challenges, as well as less powerful solutions since they are not part of one ecosystem for clients. A combination of our in-house solutions set, our assets, our training, and most importantly, our people is driving our success.
Radio Ink: You get digital nailed, then social media comes along. Was it a big transition?
Wilson: We were fortunate. It was a more natural evolution at that point. If we had not started aggressively with digital as we did in 2010, it might have been more disruptive. As social media exploded, we were able to take advantage of that and harness it. We get a tremendous amount of traffic from social media as well as from search engines. We have our on-air talent creating content across all those platforms. On a weekly basis as measured by Nielsen (about 70 percent of our stations are measured by them), we reach over 12 million radio listeners. Our owned-and operated local media websites, which are companions to our radio station brands, reach more consumers than our AM/FM broadcasts. Given that fact, you get the benefit of positive reinforcement for the on-air talent. We’re asking them to do all this additional work, but the great thing is they instantly saw the benefit of the communities interacting with them via digital. They were surprised that people in the community cared so much about what they had to say online. It’s a great proof point that we now have more people coming to our local radio station websites than listen to our AM/FM broadcast. At the same time, our latest rating period, the fall of ’18, we had half a million more people listening to our AM/ FM broadcasts than have listened over the past two years. In the face of Pandora, Spotify, and all of this media competition, we actually had more listeners to our broadcasts. That speaks to the power of the content our on-air talent is creating over the air and online.
Radio Ink: You have said your digital business will be a $200 million business. How big can that be over time, and will it surpass spot revenue?
Wilson: There is no doubt digital will surpass spot revenue. That is a “when,” not “if” question. Our last earnings call, which was for Q1, we shared that a third of our revenue was digital — about $120 million and growing over 20 percent year-overyear. We have Townsquare Interactive, our digital marketing solutions company — we create a Web presence for small and medium-sized businesses doing reputation management, directory listings, SEO, all of those important things for a business. We started Townsquare Interactive in 2012 organically, from the ground up, with an amazing team and world-class technology platform built in-house. We now have 16,200 subscribers who pay us, on a monthly basis, roughly $300. That is currently on an annualized run rate at the end of Q1 of $58 million. That business on its own will be $100 million in revenue within three to five years. We broke out the business as its own segment so that investors external to the company can see the profit profile of that business. I have always shared that it is about a 30 percent profit margin business, and we now show that in our external financials.
The third segment is called Townsquare Ignite, which is our in-house technology platform for digital programmatic advertising business. That is our fastest-growing business from a revenue standpoint as well as a profit standpoint. On its own, Townsquare Ignite will also be $100 million in revenue in three to five years. Those two businesses will be $200 million, but we also have our owned-and-operated websites, and platform all of the client solutions around that. Thus we will be well north of $200 million of digital revenue in three to five years. That will clearly surpass our spot revenue. Radio is growing in low single digits, while digital is growing double digits. It’s clear those lines will pass each other, not because radio is receding, but more importantly, because digital is exploding. Radio gets 7-8 cents of every dollar now in the U.S. Digital gets about 52 cents of every advertising marketing spend.
For Townsquare, we’re fortunate that we’re competing for 60 percent of the spend, where a traditional broadcaster for radio, without a digital platform, you’re competing for less than 10 percent. We feel confident we will continue to capture a large share of broadcast and digital while also eating into print and direct mail spends, and continue to have strong growth as a result.
Our interview with Wilson will not be posted online. It is for magazine subscribers only. To subscribe to Radio Ink in time to receive this issue which includes our interview with Bill Wilson and out 10-page special report on Podcasting, CLICK HERE for a print subscription and HERE for a digital subscription.