Events grow radio revenue in new ways.

Story by Inside Radio

In an otherwise choppy year, one radio revenue stream is delivering consistent growth. Non-traditional industry revenue is up 7.2% so far in 2012, according to Wells Fargo.   So stations are on a constant quest for the next big NTR event.  Even Halloween is treating one cluster to new NTR event revenue.  But it first took a sizable investment.

Also known as off-air revenue, NTR’s contribution is growing — it accounted for 9.2% of total radio revenue in the first half, according to the Radio Advertising Bureau.  That’s more than double the percentage from digital and up from 8.6% last year and 8% in 2010.  For some stations, off-air makes up 18-20% of revenue while others are in the 5%-6% neighborhood.  

With radio stations and digital assets as a built-in marketing machine, it’s no wonder revenue from station events is on an upswing. Townsquare Media produces 350 live events annually across its 51 small and medium markets, covering categories that range from music and lifestyle to education and athletics. That number is up substantially from when the company was first formed in May 2010.

Competition is less severe in smaller and medium markets but events still need to be neatly tailored for the market, station operators say.  That could mean an apple blossom festival in Washington State, an agricultural show in Montana or a Mexican food fair in El Paso.  “It’s not a one size fits all proposition,” Cherry Creek Radio president Joe Schwartz says.  “If you can find things that really fit the market and that people really want to go to, you can make some good money.”

Although it has a four-person corporate events team, Townsquare EVP of live events Dhruv Prasad says the company works collaboratively with local managers in targeting events. “We don’t look across the company and say we should be doing a bridal fair in every market,” he says. “There was has to be a compelling market opportunity and an unmet need and the people in the market have to have a passion for it.”

When strategizing how to improve market share, station operators often look for a format hole to plug.  Townsquare Media is also aiming to fill local event holes.  The company’s five-station Tri-Cities (Richland-Kennewick-Pasco), WA cluster has shelled out $20,000 to buy used Halloween equipment to take advantage of the market’s lack of a haunted house attraction. The result is Terror Behind The Screen, 8,000 square feet of Hollywood-inspired haunted house, including special effects and scenes from classic horror films.  

The stations are on pace to sell 6,000 tickets at $10 a pop to the attraction.  Through a combination of revenue from ticket sales, sponsorships, and subletting space near the house, Townsquare recouped its investment well before the first trick or treaters will venture out into the night.  More importantly, it’s added a new revenue-generating annual event to its portfolio.

The stations sold a title event sponsorship to the Let’s Party Halloween Store, where it’s driving in-store traffic for ticket sales.  The three-store chain has also sublet some space adjacent to the haunted house for an on-site gift shop. Other sponsors include a local credit union, a sports bar, a carpet cleaning service, a realtor and a pavement marking company — several of which are new advertisers.  The event is so successful that Townsquare’s Casper, WY cluster sent a pair of employees to scope it out with an eye toward replicating it next year in their market. The Yakima, WA cluster is also interested.

Market manager Cheryl Salomone says the attraction shows Townsquare’s willingness to invest in non-traditional events it can own. “It’s nice to have a company that supports this kind of outside-the-box thinking and having an entrepreneur sitting in the GM chair,” she says. “They’ll write the check for it if you truly believe in it and can make money from it.” Salomone says she recently hired a local events manager for the Yakima and Tri Cities clusters. Non-traditional events like a haunted house are a win for everybody, she says. “The local advertisers get to be in front of more people. The community benefits from having more things to do and the station gets visibility in front of those crowds.”  Plus she’s enjoying Halloween more than ever. “It’s now my favorite holiday,” Salomone says, smiling.

Although long-running benchmark events remain radio’s biggest off-air moneymakers, stations are searching for new opportunities. Cherry Creek Radio took on the Bisbee Blues Festival in Bisbee, AZ near Tucson.  Galaxy Communications has acquired the sales and marketing rights for the Syracuse Chamber Of Commerce’s big annual event and Townsquare Media has taken over city events in Grand Rapids and Ft. Collins, CO.   Driving significant event dollars requires more than sponsorship sales or a cut of side revenue like merchandising, concessions and parking.  Companies say the core profit center is ticket sales.

Yet despite careful projections of expenses and revenue, not every new event turns into a winner.  Working with BMI, Cherry Creek staged a free Montana Music Festival in all of its Montana markets, headlined by songwriters. While their songs were well known, the songwriters weren’t.  Apart from the college town of Missoula, MT, the event didn’t meet expectations.  “It’s hit or miss to some degree, people don’t have quite the disposable income that they had before,” Schwartz says.  “You have to find things they’re willing to spend money on.”

Some towns are bigger event markets than others. With great weather and a large regional population to draw from on both sides of the U.S.-Mexican border, El Paso is a booming events market.  Event revenue is up in the market this year, according to Townsquare-El Paso VP/GM Brad Dubow.  The company produces 1-2 events in the city a month, ranging from barbeques and raft races, to street festivals and concerts.  During the summer the three-station cluster does 1-2 a week.  To keep pace with all the action, the cluster hired a dedicated live events person but also relies on the entire staff to pitch in.  The necessary ingredients to successful events, Dubow says, are “great planning, strong partnerships, everybody agreeing to agree, and excellent execution.”