Cumulus Media Inc. (NASDAQ:CMLS) Q2 2023 Earnings Call Transcript

Page 6 of 6

And that’s why you’ve seen a big push on areas like digital marketing services. And then there are – to mitigate the negative impacts of what we can’t control, which is the market right now. But again, as we’ve said multiple times, we’re confident that our operating leverage will go to our benefit with the upswing. There will be an upswing. So I think we’re pretty good at this. We’re pretty focused. And we’re pretty confident that when things pop back, with our operating leverage, we’re going to see a nice benefit on the upswing.

Jim Goss: Okay. And the other thing I wanted to ask about is what you just brought up, digital marketing services. I know you said you plan to lean into it more. I think you said you were going to triple your sales force in that area by the end of the third quarter. And I know one of your smaller competitors has had significant success in it. I know you’re aware. And you deal in somewhat bigger client levels based on the market size that you reach into. I assume it’s a little more competitive in the types of markets you’re looking into, or maybe not. And just how far do you plan to go in that that would change the character of the company a little bit by getting into something that’s a little more tangential and not exactly the same type of business, that [indiscernible] business?

Mary Berner: Yes. We see – we have been very, very successful in training our radio native sellers to sell both radio and digital products to both current customers and new ones. And generally their approach so far – and we do this across the company. There’s more competition in larger markets, but there’s a whole lot of opportunity across the country. And generally, their approach has been to upsell radio with digital. So they go to their longstanding relationships, and they upsell radio with digital. And as we mentioned, that business is already run rating at $40 million. So what we did is we tested adding additional digital native sellers, so not radio sellers, who focus only on digital, generally non-radio clients. And we’ve seen that in our early tests, a really nice payoff.

And that gives us enough confidence that we’re adding more direct sellers. We’re going to – we believe that if we add more direct sellers, we’re going to see accelerated digital marketing services growth, both within the markets where we add those sellers, but then also on the whole. So the way we look at that is given the fact that the business is run rating at $40 million, if we triple our sales effort, and each seller is able to just even double or double our monthly digital run rate, those numbers add up really quickly as we become – work to become meaningful players in the market. So I would kind of wrap this up by saying there is a lot of opportunity. We operate generally in the mid- and small-sized markets, and there is a lot of opportunity, and we’re seeing it.

So we’re very, very bullish on that.

Jim Goss: Okay. Thank you very much. Appreciate it.

Mary Berner: Thank you.

Operator: Thank you. I would now like to pass the conference back over to the company for closing remarks.

Mary Berner: Thanks very much, everyone, and we look forward to talking with you again next quarter. Have a nice weekend.

Operator: That concludes today’s conference call. Thank you for your participation. You may now disconnect your lines.

Follow Cumulus Media Inc (NASDAQ:CMLS)

Page 6 of 6