Obviously, we’re quite proud of digital advertising growing 7% last year, increasing $10 million on a full year basis. Overall, programmatic was up low double-digits in 2023, which was really strong and our O&O local was up. We did definitely take a step back in our national O&O business. We haven’t spoken a lot about this on previous calls, but we have leading brands in entertainment and music like XXL and HipHop and tasteofcountry.com and country and I won’t name all 10 of them, but they are the leading platforms for each of their genre. That business has definitely been impacted, not from cookies because that hasn’t happened yet. But there’s been some significant change in algorithms for Google as well as Facebook referrals. You may have heard how many referrals to new sites has come down from social platforms.
It’s been pretty dramatic. And that’s definitely impacted our national business, which what I would say is has muted our digital advertising growth. If it wasn’t for that, we would have grown more than 7% last year. And as we look at Q1, we’re seeing similar trends in Q4 in our digital advertising business. We’re seeing sequential improvement from Q4 to Q1. National business that I just described, like XXL and tasteofcountry, still down over 25%, which is over $1 million in Q1. But thankfully, local websites and local owned and operated is up low to mid-single digits, and our programmatic continues to be up high single-digits, which is great. And Q2 today, having the benefit of being here March 15 with you, we obviously have a good look at Q2 right now and Q2 is pacing stronger than Q1 in digital advertising.
And I believe I’ve noted this on the call also is pacing better for broadcast advertising Q2 over Q1. So a lot of positives for us. I see Q2 better than Q1 in digital advertising. I see Q2 better than Q1 in broadcast advertising. And as I just described, I believe Q2 will be a monumental turnaround event for us in terms of subscriber growth and revenue growth in Townsquare Interactive. So a lot of positives as we go into 2024.
Michael Kupinski: Great. Thanks, Bill. I appreciate that. That’s all I have.
Bill Wilson: Thank you, Michael. Have a great day.
Operator: [Operator Instructions] Your next question comes from Jim Goss with Barrington Research. Please go ahead.
James Goss: Hey, thank you, and good morning. Stu, I’d like to ask you on first. I know you alluded to this, the fact that the calculation for the noncash charges had quite a bit to do with the rising interest rate trends we’ve been experiencing. If the rates tend to start to draw back after this long period of increases, do you think that will change the calculation? And I understand they are noncash, but there might be a little bit of a distraction and maybe you get rid of that element of noise?
Stuart Rosenstein: Thanks, Jim. Yes. Well, obviously, if interest rates start falling back like we all hopefully expect them to, that will be less of a drain on the calculation. The other important factor that calculated into it this year was BIA’s industry forecast came down for broadcast for ’24. It really unfairly attaches itself to our company because it’s mainly based upon large NFL city markets. Broadcast does a lot better in small local markets than it does in the bigger markets. So we think that those two things together, the rising interest rates and the industry forecast coming down for bigger cities majority, unfairly hurt us in that calculation. But yes, you are correct, assuming that broadcast forecasts hold steady or go up and interest rates come down, we shouldn’t see as much of an FCC impairment on those licenses.
But it really, I mean, I can’t stress enough that these are noncash charges. They don’t affect future revenues, future expenses, future cash flow generation. It really is just an academic GAAP calculation of how we allocated purchase price when we bought these markets in 2010 through 2012. It has no effect whatsoever on our business. And people should adjust those out and look at our adjusted earnings per share. They should not just look at flat bottom line earnings per share.
James Goss: I think people probably do, but it is certain noise in the background. Is there any element to those write-downs that might make it more possible for you to buy some additional broadcast properties if you thought that might be worth it at any lower rates? Or is that going to be a completely separate issue?
Stuart Rosenstein: I don’t think impairment charges in anybody’s company really has anything to do with how we would value a business. We look at markets and see what their current state of cash flow is, how much infrastructure they still have left, what we think we can add to those markets by rolling out our digital playbook. So looking at noncash charges for impairments really doesn’t factor into our equation and we’re looking at M&A.
James Goss: All right. Thanks. And Bill, talking about TSI and the issues you’ve had with the staffing shortages for some time. It seems like you’re dealing with a group of potential employees or existing employees who require a certain level of competence that they might also have attitudes toward workplace rules that might be different from the population as a whole. And there probably is some competition for those individuals who meet all the requirements you require. I’m just wondering if you might discuss a little bit more about the challenges of that strategy of maintaining that piece of employees and increasing it and restoring a growth element to it with the things you’re facing that might see some headwinds as well.
