The “Secret Sauce” That Makes This Company Successful- Radio Ink
Galaxy Media, with 13 stations serving Central New York, has a sizeable footprint that keeps advertisers happy. CEO Ed Levine says a big part of the success of the nearly 30-year-old media company is venturing outside of its Syracuse and Utica footprint.
Radio Ink: How was Q4 for you?
Levine: Our fourth quarter was pretty much flat. It’s a little hard to measure because we closed our transaction with Townsquare, selling one of our Utica FMs to them in the beginning of the fourth quarter, so everything is sort of pro forma. What I’m looking at is the entire year that shows our overall group was up 7.8 percent. Our radio mirrored what the rest of the Syracuse market did, we were down 2.3 percent. What made 2018 successful for us was what I refer to as our “secret sauce” — our event division. In 2018, our event division, for the first time, accounted for more than 50 percent of the overall cash flow for the company. We also got very serious about digital in 2018. From a complete start, our digital revenue in Syracuse was five percent of our radio revenue. This year it’s going to be 10 percent of our radio revenue, and we anticipate at this point that it will be 20 percent by 2020. Q4 was also good for our Sports Marketing Division. We are the flagship for Syracuse University Athletics not only play-by-play but coaches shows as well. We are also the flagship for AHL teams in both markets and we are affiliated with both the Buffalo Bills and the New York Giants.
Radio Ink: With more than 50 percent of your 2018 cash flow generated by your Events Division, do you plan to grow your experiential model?
Levine: Yes. In the last 12 months we expanded our Events Division outside of our radio footprint. We tested our model in 2017 and really let it go in 2018 and did highly successful events in Buffalo, Rochester, Binghamton, Albany, Saratoga, and on Long Island. We own no radio in any of those markets, so we partner with at least one radio group in each of the markets we go into. The events ran the gamut of being somewhat profitable to extremely profitable. This weekend we are doing our first event in North Carolina and another event on Long Island. We are doing a wine and chocolate event in Greensboro and a high-end craft beer event in Uniondale.
Radio Ink: What are your top categories?
Levine: A couple will sound familiar. Auto was very strong, medical particularly dental — we had five or six dental practices that were very active with us in Q4. Hospitals were also active. Financial was near the top as we have a couple of local banks that are very active and we saw some significant Credit Union activity too.
Radio Ink: Any surprises in where the ad dollars are coming from?
Levine: The one that did catch my eye is funeral services. We have five different competing advertisers in that category. I think what happened is one of them came on as a “trendsetter,” they got results, and the others heard about it. It’s like legal services: you don’t go out every day and say I need a DUI lawyer, but when you need one, top-of-the-mind awareness comes into play. That’s how we present it to the funeral directors: you’re not going to need it until you need it. I believe nothing works better for top-of-the-mind awareness than radio. As the population ages you can consider funeral services a growth business. The spots are tasteful and they are getting results.
Radio Ink: How is Q1 2019 looking so far?
Levine: Our two markets combined, not including events, just radio, sports marketing, and digital, is up almost five percent in January. In February, I think we are going to hit budget by the end of this week and then add another four to five points by the end of the month. I have a very clear vision that through April we are in going to be in good shape. We have pretty aggressive combined goals for 2019. I think radio is going to be flat and I’m not counting on exponential growth in the radio market. We need to be aggressive in creating demand and not wait around for avails to pop up.
Radio Ink: Is consolidation good or bad for business?
Levine: I think we need a loosening of the rules. I think comparing the facts from 1996 to where we are now is irrelevant. Today, you have non-radio competitors that are taking money out of our local markets on a daily basis. Radio needs to be allowed to get bigger to compete.
Radio Ink: Are you facing much competition from Google, Facebook, and other digital services?
Levine: Absolutely. We commissioned a study in Syracuse that used 2015 data, so that was a long time ago in the digital world. But it showed then that Facebook and Google were taking more revenue out of the Syracuse market than all radio stations combined. It also showed that by 2020 the revenue drain will be almost two-to-one. One of my pet peeves is that we have radio competitors that will ask for 100 percent of the share of the radio buy to keep other groups off. That thinking is so shortsighted. You want 100 percent of seven percent? Stop thinking about the radio guy across the street. It’s a circular firing squad aimed at seven percent. The real money out there is the revenue that the Googles and the Facebooks of the world are getting. Digital is not the end all to be all, it needs to be combined with legacy media to be potent and powerful.
Radio Ink: What is you biggest challenge?
Levine: Finding quality marketers and salespeople. Getting younger staff people involved in the business is very important. We’ve been blessed at Galaxy. We have three folks this year who will be retiring and to me that is an incredible compliment to our company that they have stayed with us a long time. I’m excited by the fact that I’m going to be bringing in some new folks with new ideas and perspectives. Getting the younger generation involved in legacy media, radio to be specific, is the biggest challenge.
Reach out to Ed Levine by phone at 315.472.9111 or e-mail firstname.lastname@example.org