Former senior executive at Audacy Inc
- Audacy’s (NYSE: AUD) operating environment – advertising spend trends and impacts of a potential recession
- Competitive dynamics with iHeartMedia (OTC: IHRTQ) and Spotify (NYSE: SPOT)
- Content offerings and growth drivers
- Outlook for H2 2022 and beyond
Could you share an overview of Audacy’s operating environment, highlighting 2-3 trends or drivers impacting the business?
You mentioned rebranding, literally in one aspect with the name going to Audacy, but also the move towards some more digital offerings. How has the company evolved, moving from its terrestrial radio base more into podcasting and digital radio? What does it look like today?
You mentioned the large passion points or content types Audacy can offer. What does the company’s content slate look like? In which areas is it relatively strong and where might it need additional development?
The movement from terrestrial to digital is interesting, and you discussed how sports play-by-play is so important but might run into some issues with the leagues themselves. How much of a challenge do you think that will be? Is the power entirely in the big sports’ hands here? Is there an opportunity for Audacy to retain a decent amount of that? You said it’s not one-to-one but relatively close.
You mentioned Audacy’s in-house, organically developed content. Where do you think the company stands in terms of focusing on that, so that it owns the audience vs acquiring a podcast? What makes the most sense and what should be the focus?
How do you assess secular trends involving advertisers permanently shifting expenditure away from radio as a medium? What are your thoughts on ad agencies working with national brands perhaps deciding they want to use their audio budget on a Spotify or a different programmatic podcasting platform instead of terrestrial radio? Are you seeing that?
Outside Spotify and other digital audios, what are your thoughts on small- and medium-sized businesses with relatively scarce ad budgets preferring a Facebook for more precise targeting – fully digital – vs going to radio? What examples of that trend are you seeing?
You discussed the efficiencies of the digital mediums. How much more efficient or precise are these for targeting when looking at digital vs terrestrial? How should we think about the advertisers’ calculations as they decide where to allocate dollars?
Could you elaborate on what you said around the softening environment for advertisers? Is it primarily uniform or are specific pockets being most cautious in their ad spend? What do you think the impact of a recession would be for Audacy?
It’s been a tumultuous past few years for the radio industry. If the macroeconomic environment were to deteriorate and there were a prolonged recessionary period, do you see a scenario where Audacy doesn’t make it through? Even iHeart, one of the biggest players in the space, went bankrupt a few years ago? How much of a risk is that crisis scenario?
Something that’s often highlighted is the difference in pandemic recovery for Audacy and terrestrial radio vs linear TV, local TV stations and so on, wherein Audacy is still well below 2019 revenue levels – by about 15% – while many TV stations have recovered much more – within 0-5% of 2019 levels. Why do you think there’s this difference between the advertising mediums? Is this more reflective upon the advertiser base or the medium as a whole?
Many of the large terrestrial radio companies discuss how many people listen to the radio at some point, whether in the car or in public with it playing in a store, etc. Audacy said it has a network of about 60 million listeners. How exactly does the company calculate that? Are there any challenges to accurately measuring listeners across its various offerings?
Audacy announced the creation of the Audacy Digital Audience Network in March 2022, intending to help advertisers buy in the platform. How do you assess this announcement and what this offering might look like? Could the company focus on any areas in improving its buyer experience?
How do you assess Audacy’s adtech? The company has made a few acquisitions to support this over the last year or so, with WideOrbit, AmperWave and Podcorn. How are these integrated into the overall offering and how robust are those assets?
Do you think Audacy is still predominantly selling reach with one ad in one slot in one geography, or has it developed any differentiated technical expertise – such as serving different ads to different listeners based on IP addresses?
Could you summarise the competitive environment and where Audacy stands in relation to Spotify and iHeart? Are any other players worth highlighting from the mix?
You mentioned some internal hurdles Audacy will need to clear to get the wins and success in relevant markets. Could you elaborate on that? Is this just being better with a lean sales structure, having each salesperson better able to sell across the platforms and having the better adtech to back them up? Would other sorts of restructuring be beneficial here? What’s important to achieve that streamlining?
What are your thoughts on the approach and style of Audacy’s leadership? How do you assess the management and execution ability of CEO David Field and the rest of the executive team? What else is important to highlight?
To what extent do you think Audacy is having problems attracting and retaining employees, given you mentioned a terrestrial radio focus is perhaps not the easiest industry to bring top talent to?
Looking at generations, and not just in terms of attracting talent, how would you characterise Audacy’s primary audience? How has that evolved?
You mentioned some of Audacy’s partnerships, both prospective and existing ones. The company recently announced a partnership with Amazon, where Pineapple Street Studios is developing four podcasts for it. How important are partnerships such as this for the company?
Audacy has other partnerships more along the advertising side, with brands such as Nike, HBO Max and Netflix. How important are those for the business? How significant is being tied up with these really high-name-recognition brands?
How significant are individual customer relationships or advertiser relationships generally with Audacy? Is there risk of individual companies having outsized impact on the company if they cut spending, or is Audacy generally not too concentrated in any one individual company across different categories?
We discussed Audacy’s challenges and some things the company can do to aid growth. What do you think will be the major growth drivers? What should it prioritise outside of restructuring the sales team?
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