Leading Local Insights
Leading Local Insights
Unraveling the Future of Local Media Revenue with Todd Handy, CRO SEBPO
Todd Handy, Chief Revenue Officer at SEBPO, and BIA’s Rick Ducey unpack the ongoing transformation of local media companies to cross-media advertising platforms in this enlightening podcast discussion.
Listen to hear how media companies can scale revenue, save on expenses, and succeed for advertising clients. Todd discusses how media companies can leverage business process outsourcing to generate revenue and maximize performance. He also shares a real-life example of a local media company netting over 50% digital revenue and delivering robust performance metrics.
A well-respected executive, Todd was Beasley Media Group’s first Chief Digital Officer before SEBPO. At Beasley, he led the company’s fast-growing digital media business, realizing a 165% increase in digital revenue over three years. In addition to his role at SEBPO, Todd is a member of the Local Media Association’s Board of Directors, serves on various sales and digital marketing advisory boards, and is a former member of the Local Media Consortium’s Executive Committee.
Hello and welcome to BIA Advisory Services Leading Local Insights podcast, where we examine trends, technologies, platforms and industry activities related to local media revenue.
Rick Ducey:I'm Rick Ducey, bia's managing director, and I'm here today with SEPBO's Chief Revenue Officer, Todd Handy. Before joining SEPBO, Todd was Beasley Media Group's first chief digital officer, where he led the company's fast growing digital media business, realizing a 165% increase in digital revenue over the last few years, primarily focusing on the traditional broadcast radio company transformation into a digital media company. And in addition to his role at SEPBO now he's a member of the local media association's board of directors, a pretty important association helping direct companies into the future. We use it on various sales and digital marketing advisory boards, Todd, doing great work. Thank you for that. You're also a former member of the local media consortium's executive committee, so you've got a great background in digital and revenue and have some nice executive positions where you could see where things were headed and actually helping form some of those strategic directions for companies that you work for and at these industry positions, the broader industry. So great to have you with us, really looking forward to some of your insights, Todd.
Todd Handy:Thanks, Rick. It's my pleasure to be here.
Rick Ducey:So you were at that intersection of local media coming at it from the traditional side for example, Beasley, and so have the other relationships and that's a large part of the marketplace that we work with at BIA. Also, Is the traditional media trying to say, ok, there's a pony there. On the digital side, we see growth, we see revenue, the scale. We wish it was bigger, we wish it was faster, but we need to be there. Our clients want us to be there. We need to be there as companies. So these media companies are looking to make investments in digital to diversify and scale the revenue opportunities. With your strong leadership roles in the space and your vantage points from a few different perspectives, how are we doing, kind of as an industry, these local media companies that come from strengths and traditional in terms of their business models and their revenue models and really their expertise, trying to make it into digital? How do you see local media industry moving forward? Headwinds, tailwinds, that kind of thing.
Todd Handy:So I think we've come a long way as a local media space. TV and newspaper got disrupted before radio did. Took a little bit longer for radio to be disrupted and so newspaper TV have a little bit of a head start, but radio has been catching up quickly. In fact, if you listen to some of the responses from SMBs out there and so forth, they feel like they're finding local media reps are really becoming more agency kind of reps that they're bringing more overall value than just their traditional media and even just digital.
Todd Handy:At Beasley we try to ensure that we positions ourselves as a true agency for any of the prospects out there. We could bring them, of course, radio and of course we could bring them digital. But we had access to anything else that they were interested in. If they wanted out of home, if they wanted newspaper TV, we could get that as well. It's so accessible these days that there's no reason to tie yourself to just your traditional media and or even just that and digital itself.
Todd Handy:So I think if they will think about the fact that we have the product available across all of the audiences to be able to reach those audiences and activate them, it's less about what you've done historically and more about what the advertiser needs and how you can help them to reach those audiences, be it discovery from a brand awareness standpoint, be it from lower funnel or whatever the case may be. So I think that's one of the headwinds that folks are starting to embrace is that, yes, it is difficult out there and you came from a specific niche within media, but you don't have to stay in that niche. You can continue to leverage that, but you can grow your overall product set and your revenue and so forth by ensuring that you're more than just a media company. In fact, back up any more than a fill in the blank what your traditional media is, more than a radio company or a newspaper TV company. Now you're a media company, but even more than media company, you're really an agency when it comes to what you can do for those advertisers.
Rick Ducey:Yeah, I mean, really those words resonate very strongly for me and I see that a lot in the industry, this notion of not to get too cliched but kind of what business are we in? Are we in the railroad business or the transportation business? You know the marketing might be a theater level kind of thing. And yeah, I mean we're in the business. I mean, like you're saying, I've satisfying client needs and we can use different hours and our quiver to do that. It could be traditional radio, it could be digital, it could be outdoor, you know, it could be CTV.
Rick Ducey:And that agency perspective of let us understand your business goals, let us understand how you want to build a campaign, who you want to reach with what message, when and in what context, and let us put together the media plan and show you how we're going to get through audience and what kind of performance metrics and attribution and so on we can get to.
Rick Ducey:So it's quite a large undertaking and it's a whole different experience than it was being in radio, as you're saying, you know, 10, maybe even five years ago, as it starts to get kind of stronger. So on the business side it's like, yeah, I mean, that's what clients want and there are a lot of people selling your clients that. But traditional media tend to have really good relationships with particularly local clients, direct clients, and it's like, well, if you, you know, I can go to 15 different media representatives and get my campaign activated, or if you can help me and you can, you know, manage 10, you know, or all of my media investments for that agency kind of role, even if you're, you know, business card says a TV station or radio station, if you can take care of most of all of my needs, I'll do my business review. I mean, it's really kind of competitive differentiator in the marketplace.
Todd Handy:It's interesting, Rick, because I've had that exact discussion with sellers in every one of the markets I've ever been in in all of the media companies that I've worked for that they'll say something along the lines of you know, my business card has our station name or our newspaper name or whatever on it, and that gets me in the door because we have a longstanding relationship. I go back to my time at Beasley 60 year media company. Right, they've got the relationship and the brand cachet in the market there. So when you call and say I'm calling from this outlet, whatever it may be, folks sit up and take notice because they've known you, they've listened to the morning drive, they've read the newspaper on Sunday, you know they've done all of that. So that gets them in the door.
Todd Handy:But the sellers would say the problem is then, when I show up, they expect me to be a traditional person, they don't expect me to be a digital person. And that goes back to why you need to position yourself not as just the traditional media company, or even just as a media company, but as an agency, and make sure that you also have as you know very well, so many of the traditional media companies out there have a digital agency as well, with a separate name and so forth. Right, make sure that you've got the call letters of your top station, but you also make sure that you have the name of your digital agency on there, so, as you earn your way into the door, your history gets you through the door, but then the future is what keeps you there and helps you to ensure that you can service that advertiser. That's the first thing, and then the second one, as you know very well, I don't come from the journalistic side and I don't come from the traditional side. I'm a digital guy through and through, and so I say this and I don't mean this to disrespect anybody, but as a media company, we have to remember that, frankly, our audience really isn't our users, because they're not paying most of the time for the product. They're the audience, that's the eyeballs, they're the inventory.
Todd Handy:The advertisers are, in many ways, our audience because they're the ones who actually pay. That's where the revenue comes from. Don't get me wrong. There is a chicken and egg there. If I don't have an audience to sell, no advertiser is going to come. So I have to build an audience. But that's what you see in all of the startups, especially when you think of social media, the Facebooks and the others of the world who had all of this cash to burn with their investments and so they could build this entire audience before they even started to monetize. So you had the chicken and egg. So, as you think through that from a traditional media standpoint, leverage your history, but then make sure the overlay digital and the advertising and agency space on that, so that you can position yourself for the future.
Rick Ducey:Yeah, that is sort of the bubbles, I think. And I'll give you one example I was speaking with an executive COO of a sort of small medium market radio company and talking like this digital opportunities, scale, scope and what your local sales team can do, what the local advertising space is looking for on the radio station, and it was like they took your words to heart and said, okay, you'd like to be on TV, but it's expensive. You're loyal to our radio station, thank you. And so they said well, we can actually get you on TV. You're familiar with streaming TV and connected TV. We could put together a media plan for you and combine you with what we're doing with our radio air, with this connected TV and on that platform we can really super target your audience and even have different ads, different creatives for different audience segments.
Rick Ducey:So they kind of learned how to do that CTV sell and we're open to say, yeah, it's radio call-outters, but we're really an advertising company and an agency to deliver your results. So they took some steps down that road. And then when I was talking to this executive, he said you know, 30% of our revenue now comes from CTV and so it's like they're a radio station that those CTV or, like you're saying, they're a solutions company that brings results for their advertisers. So it can happen. You know, even in a small market we have the benefit of those great direct relationships.
Todd Handy:Well happened
Todd Handy:to be speaking on a webinar of a well-known white label agency in the local media space, and one of the attendees was from a secondary, tertiary market and was talking about how they're a newspaper company but, for whatever reason, they had decided that they could build out a radio station.
Todd Handy:So literally they come from the newspaper background, but they built out a radio station that now has an incredible audience and engagement and everything else. And so, if you think about just as our traditional media, as our traditional audiences, are eroded and find themselves in other areas, if we don't branch out to create incremental inventory and engagement opportunities, we don't have as much to sell. And I've not worked for a company who says, oh, it's okay if revenue goes backwards, right, revenue always has to be up into the right, and so in this case, I was impressed by the fact that these folks had come from a newspaper background, but they decided that they were going to build out a radio station and they had driven incredibly great engagement from that and diversified themselves. So not only could they now say, yes, we can get you newspaper and radio right because they now have radio, but I just thought that was really disruptive, the fact that they would do that instead of just saying let's go out and buy a couple more newspapers.
Rick Ducey:It was interesting, right, yeah, exactly, and it's on the digital side. You know what the traditional media company see is. It's a different business model, different margins, you know. And if it's innovation or something new, you know that startup mentality you don't win significant, significantly in a marketplace for years. You know, as you don't measure it in quarters or even months, it takes a while to get your business out there, people familiar with what you're offering and then starting to demand that. So it's like you know, even these days with margin compression, the linear, traditional side pretty good business throws out some good cash. Then you look at digital and it's like oh, you know revenue might go backwards, the margin is houseball, but you're growing. You know planning seeds, diversify revenue and have future avenues to scale.
Todd Handy:Well, I believe that one of the main KPIs that every local media company needs to be looking at is digital as a percentage of total revenue. Now, you can game that, because if your top line revenue is declining, because your traditional revenue perhaps is declining, even if you just keep the same digital revenue, if your top line declines, you're still going to increase your percentage. So I'm certainly not suggesting that you gain that way. You need to grow both of them. But best practice is 25-30 percent that's best practice of what a local media company should be shooting for to have as their percentage of total revenue. That's digital. Many aren't there, but that doesn't matter, right? It's one of those ideas where I've got to set the goalposts way out there and work towards that, and I've got the milestones along the way, I've got the yard markers to get me there, and every time I'm moving forward, as long as I'm moving forward, I'm getting closer to that. You know the best practice.
Todd Handy:Folks are in the low 30s or so. You've seen, and I've seen as well in the last little while, Lee Enterprises is reporting that they're now over 50% in digital, and I applaud that. Right, that's amazing that they would do that. So when I was at Beasley. Our goal was to be 20% by 2022 and then continuing on from there. Is it easy? No, not at all. And what happens if you get to 2022 and you're only at 17? Okay, you didn't hit 20, but if you hadn't set that goal, you might have come in at 12. Right, it's the whole aim for the stars and hit the moon instead.
Todd Handy:Right, we've got to ensure that we've got a battle cry that we can rally around, and so, for me, one of the main KPIs is percentage of total revenue.
Rick Ducey:That's digital, so this, this is um, a lot of moving parts, and so you're getting the example of a newspaper company to get into the radio business. Now these traditional media companies are getting into the digital business. There's a lot of moving parts and pieces. I mean there's backend stuff, there's front end systems, there's a lot of middleware. There's a lot of things that have to come together well in the digital space for media companies to execute confidently and successfully business-wise. So tell us a little bit about where you are now and what you're doing and how this all fits into what we're talking about.
Todd Handy:Yeah. So SEBPO, who I'm with currently as the Chief Revenue Officer, is a really interesting company. I spent the first part of my career in the BPO, the business process outsourcing space, which is really everybody's really familiar with that. That's where, in the 90s, a lot of the jobs were being outsourced to India and Philippines and offshore and so forth. It's very much around low-cost labor markets and everything else and things that are very definable, measurable, repeatable and so forth.
Todd Handy:Well, SEBPO is at the intersection of business process outsourcing and really the publisher and agency space and really what we use as our mantra as we're discussing with our clients and prospects. It really comes down to expense reduction, revenue generation and performance improvement. Right, we call it scale, save and succeed. It really comes down to this as a media company, if you're not looking to reduce your expenses, I'm super surprised. Everyone is looking to do that. But how do you do that? What can you do that can find ways that you can have sustainable expense reductions? And, in fact, our team just attended the DigiDay Publisher Summit in Miami and DigiDay always does these boards where they have the publishers come up and post the problems that they're dealing with, and one of the ones was how to deal with increasingly tightening of the belt and decrease of budgets and so forth. Right, and that's a refrain that we've all heard. So you can certainly learn to reduce your expenses. So in our case, we put in place folks who do media planning and ad operations and optimization and reporting and creative generation and so forth, but we do those offshore. So folks can find the people that can work for them, but they can. First of all, maybe they can find more quantity than they could find in their local market, but they can also find it at a reduced price, right? So there's the expense reduction side, but there's also the revenue generation side.
Todd Handy:I don't know any media company that doesn't struggle with its inventory and ensuring that it fulfills and everything else, and when it doesn't, then it has make goods right. I can't tell you, as a revenue guy, how much I hate make goods. We might have to pull forward inventory from next month into this month just so I can make this month's revenue. So if you can do things that can minimize, actually, let's go. Maximize your fulfillment and minimize your make goods and so forth. You are generating revenue even though you're not actually sending one out to create new revenue. You're just protecting the revenue that you have.
Todd Handy:And then the third one really is just improving performance. I come from having opportunity to have ad operations teams report into me and you get really great folks who are doing a really great job. But one of the problems is you think about ad ops in any given market and you've got the folks sitting there hands on keyboard entering the orders and so forth, and who shows up, a seller saying, hey, I need you to traffic this right now, and you go, okay, well, there's 20 orders ahead of you. Who's do you want me to bump? Well, I need you to bump mine right now. Well, the great thing is, with using a partner, we're able to provide our partners with the ability to be offsite, to be centralized, to be a way behind a door, if you will, right, where folks aren't on top of that trafficker and saying, hey, I need you to traffic this right now, where you can follow an SOP and you can follow SLAs and everything else. And so it's really about reducing expenses, generating revenue and improving performance.
Rick Ducey:Wow, that sounds fantastic. I mean, what a great opportunity for companies to partner and get access to all of those different assets and platforms without trying to do it all themselves. I mean it's nice to be able to do that BPO approach where virtualize it. Why try to stand up all those expenses and the risk that goes along with that? That's fantastic. Well, this has been great, Todd. We're coming into fourth quarter. You just give us some great insights as to what could be done for first quarter and then, of course, launching into 2024. Anything else you'd like to cover before we let you go here today?
Todd Handy:Yeah, way more than you have time for.
Rick Ducey:Exactly Sure, we won't do that to your listeners.
Todd Handy:But yeah, as it relates to that, I think number one is you've got to focus on the experience both from the user as well as the advertiser, what I referenced earlier. We have to remember who it is that ultimately pays the bills. Let me be very, very clear to the audience folks out there I only have the audience that you build to sell. So do not get me wrong If I have no audience to sell, I can't monetize. Absolutely, the audience needs to be there. But a lot of times we build our ad units and our ad experience focused on the user, which we need to do, but if it doesn't perform for the advertiser, it will not matter. If I build a really great, really wonderful user experience and ad units that go along with that, if they don't perform and they don't ultimately ring the cash register somehow. So I've got an advertiser who can measure a return on ad spend, they won't come back. So, yes, you have to find ways that you can juxtapose a user experience with an advertiser experience and maybe have a little bit of disruption and so forth.
Todd Handy:I love some of the interesting ways that's being done. If you're a Netflix fan, before Netflix went to having an ad supported tier, they started actually having ads when you paused right. So you paused to get up to go grab a drink or go to the bathroom. While you came back and on your screen there was an ad. While it was paused, you pressed play. You went right back into the experience. It's not disruptive at all, but it was incremental inventory that they found that I feel fit really well in the user experience and the advertiser experience. So when you're talking about Q4 and the struggles and the headwinds and everything else, I think you really need to find a good way to get both of those experiences and then let the product and the opportunity really lead you to where you can find new opportunities to drive incremental revenue. And to me, it's absolutely about protecting your core business and then driving your growth engine, which is your digital.
Rick Ducey:Perfect. Wow. Very well said, todd. This has been a pleasure and, like you say, there's a lot more to talk about, so I guess we're just going to have to have you back sometime maybe in 2024.
Todd Handy:This has been fantastic.
Rick Ducey:Thank you so much for being with us and joining us on BIA's Leading Local Insights Podcast to everyone. Thank you so much for listening and being with us here today. We look forward to having you joining us again. Check out our website, www. bia. com. We have a lot of confidential reports, we have a free newsletter and we also promote things like this our podcasts, our events and other kinds of reports that we're releasing to the market. Thank you again, Todd, Patrick, for producing this for us, and thank you again, everybody for joining us today. We'll see you next time.