Why Stingray is giving away $15 million in local advertising

SVP of revenue Scott Broderick says its advertising program comes with no strings attached and is a gesture of good faith to help advertisers in the long run.
StingrayPhoto

Scott Broderick knows the market for paid media has slowed to a near halt: “Before you can draw from the stream, you’ve got to contribute to the stream. But right now that stream has been reduced to a trickle.”

Broderick, SVP of revenue for radio and audio giant Stingray, also knows how lockdowns and the economic recession resulting from COVID-19 have gutted local businesses – and the media through which they advertise.

Looking at the previous global economic recession, local auto dealers, for example, saw sales drop between 10 and 15% – “and that hurt a lot,” says Broderick. But now, he says, automotive advertisers are reporting sales down as much as 75%. “That’s unprecedented. And then there are some businesses that are absolute zero.”

That’s why Stingray is helping local advertisers invest in media again. Even if that means giving it away.

The company is providing a minimum of $15 million in radio advertising grants to local businesses in markets across Canada where the company operates local radio stations. Grants will range from $1,000 up to a maximum of $100,000 per business, and recipients will have 12 months to utilize the grant. The press release for the program went out on May 7 and on-air promotion began May 11. Broderick says that in the two business days since it was announced, the company received more than 1,300 applications.

It’s no one’s intention for [the recovery measures] to last forever, but we see this as an opportunity to take a role [within the economic recovery],” Broderick tells MiC.

Stingray itself has been impacted by the pandemic. In April, it announced just under 100 temporary layoffs across its stations, and CEO Eric Boyko is taking a reduced salary – reportedly a 75% reduction. So why, when the company is experiencing difficulty with revenue, is it willing to forego another eight figures worth of ad sales?

It’s about building long-term loyalty with a client base that is crucial to Stingray’s survival, says Broderick. “Some people might be surprised to learn that still, in this day of big box and megastores, 75 to 80% of our revenue comes from local businesses,” he says. “This is a long-term view that we’re taking. We view advertising in and of itself as a stimulus. If we can get them engaged, then they will have the resources to continue.”

For those who take part in the advertising program, there’s “no strings attached,” he says – no obligation to continue paid advertising with Stingray-owned stations afterward. But Broderick says it’s a way to build brand loyalty through a gesture of good faith, while proving the effectiveness of radio advertising.

There’s been a lot of talk about the advantages of advertising – particularly on mass media platforms like television and radio – in a downturn. And while Broderick agrees, it doesn’t mean companies have the cash flow to do so. “There’s merit to [marketing during a recession], but if they have no money, you can’t even get the ball rolling.”

In the end, he says, part of being in media sales is about finding solutions, not just placing ads. “People tell you their problems, and you have to solve them. That’s our job.”