A Summary Of The 2014 DailyDOOH Investor Conference
Gail Chiasson, North American Editor
François de Gaspé Beaubien, chairman and chief coaching officer of Zoom Media and chairman of the Digital Place-based Advertising Association, threw down the gauntlet Wednesday, telling attendants at The DailyDOOH Investor Conference that it’s time that the digital signage industry should start looking at programmatic buying – despite the fact that many in the industry feel that with the different sizes and types of screens and locations, it isn’t practical or possible.
de Gaspé Beaubien eased into his topic, first discussing eyetracking, multiscreen campaigns, pay-per-look (possible now but not likely common for several years, he said), big data, and even with a segue into a recommended change of name for the digital place-based expression (See http://www.dailydooh.com/archives/101164).
Then he got into the ‘nitty gritty’, the fact that of the worldwide total ad spend of $540 billion, the US has about 33% of that, approximately $180 billion (estimated 2014). But digital out-of-home only has about 7%, ie. about $10 billion globally, of the $138 billion total global digital spend.
“How can we tap more into the total digital budgets?” he asked. “DOOH/digital signage should try to bootstrap and plug and play into the larger digital ecosystem. The industry should consider getting into programmatic buying.
“Programmatic is not just real-time bidding,” he said, noting that there are four areas of programmatic: performance marketplace, deals marketplace, guaranteed marketplace and auction marketplace.
After explaining each in detail, he said, “You can’t opt out. Programmatic is a rising tide. We have to do it. But your programmatic will be according to your set parameters and you can say that you won’t accept lower than your set CPM.
“And while 48% of ads online are fraudulent, our industry is pure.” (Presumably, then, it should be more acceptable to agencies and media planners.)
That said, he announced that Zoom plans to do its own inventory testing with programmatic buying in early 2015.
And, as a last thought, de Gaspé Beaubien said that the Outdoor Advertising Association of America and the DPAA “must marry up with the Interactive Advertising Bureau.” (We’re sure that will take some time and controversy – Ed.)
Andrew Hirtzmark, partner at Generation Partners, and Marc Kidd, CEO at Captivate Network, were interviewed by Steve Nesbit, co-chair of the The DailyDOOH Investor Conference and president of Prestonwood Trail Holdings LLC, about the purchase of Captivate by Generation Partners and their plans for the future.
Hirtzmark said that networks haven’t made the transition from technology to sales and marketing, and the latter is where Captivate plans to focus.
If you are going to build a business, Hirtzmark and Kidd agreed, “You must build a foundation that can handle growth, and you must invest early in systems and employees. It’s also important to build a culture.”
Generation Partners is looking for other companies in which it could invest, “if the culture and scale fit and the technology is right,” says Hirtzmark. “We’ll also look at other verticals.”
“There’s a lot of responsiveness in our industry but it’s not at scale,” said Margit Kittridge, vice-president digital director at Titan, New York, which has approximately 2,000 screens and where she is responsible for building Titan’s digital sector.
Kittridge said that the global DOOH industry is now projected to reach $9.87 billion this year at an 11.3% growth rate, and that DOOH will be the third most important ’device’ behind mobile and tablet by 2016.
“We need to push data into the agency system,” said Kittridge. “We need standardization from the leading industry associations: the Media Ratings Council, the DPAA, OAAA and IAB.”
Kittridge also believes that the industry should look at programmatic buying.
“There was $10.9 billion spent in programmatic in the US alone in 2014,” she said. ”But programmatic isn’t just for online. The future of advertising lies in customization. We have to develop an advertising platform that works for programmatic. Ad serving is the first step to programmatic.”
Kittridge called location the ‘new cookie in the real world” and said it links to digital devices, with video analytics, Wi-Fi, beacons and more. She also said that NFC will soon be stronger than QR codes. (In fact, several speakers we heard during the week predicted that QR codes are on the decline – Ed.)
Programmatic buying was also mentioned by Shawn Gregory, CEO of Exterion Media in the UK, who said that it is changing the advertising buying lansdscape.
Gregory gave an overall look at the industry in the UK and globally.
“8.2 million transactions were made this year via technology devices in the UK,” he said. “95% of people who have smart phones have used them in store to see and compare merchandise in store while shopping.
“In response revenue is shifting, There is digital growth in every corner of the outdoor advertising industry. The only channel that has shown revenue growth is digital.””
This has been helped along by the ability to do minute-by-minute changes and the ability to make short-term buys. Among other points he made were:
- Mobile advertising is expected to reach $90 billion by 2018;
- CEOs need TV and DOOH for brand building;
- Data will be a huge resource. It will change the way OOH and especially DOOH is bought and sold;
- Mobile will help make the industry more dynamic.
Gregory added that connected buses are being looked at in the UK.
Pual Mattlijs of Barco discussed the company’s acquisition of X2O Media as well as how Barco is working in areas one doesn’t think of so readily in terms of DOOH, such as in air traffic control and in medical with digital radiology.
Denys Lavigne, president of Arsenal, now a Christie managed company, spoke on content and said, “Experience/experiential is our working call for the fundamentals. We must think more about this. A better experience is everybody’s responsibility.”
Dirk Huelsermann, manager of VUKUNET, NEC Display Systems, Europe, , said that the big challenge is to transform from paper to digital.
“I’ve never seen an industry so resistant to change,” he said. “Now we need from 7% of the digital pie to 10%.”
However, Huelsermann doesn’t agree that the industry is ready for programmatic buying yet. It would be better to manage your inventory better and develop your technology more quickly, he said.
Rob Winston, president, The Winston Group, put it bluntly: “You can’t manage what you don’t measure.”
Winston said, “You have no have a measurement plan, whether old or young, large or small.” He offered a measurement checklist.
Marc Boidman, managing director, Peter J. Soloman Company, being interviewed by Adrian Cotterill, co-chair of the conference and editor-in-chief of DailyDOOH, said that OOH has a high benchmark compared to other media and is trading higher than traditional media.
Kevin Mullaney, president of The Grayson Company, a retail consulting group, said that:
- Owning the brand is critical;
- Vertical is good but not necessarily the entire answer;
- The marketing place is global;
- The promotional channel is nasty but you have to play;
- Omni-channel is not just the key word of the moment.
“People want to shop how and when they want,” he said. “And 91% of people keep their phone near them at all times (to check out merchandise, compare prices and more.)
Mullaney named four things that drive productivity:
- You have to get traffic;
- You have to get them to buy;
- Try to sell at the higher end of retail;
- Units per transaction.
Andy Roth, partner at Dentons law firm and site of the conference, stressed the need for privacy when dealing with mergers, acquisitions and other business transactions.
“Keep things between the partners,” he said. “Disclosures are an essential business process. Be careful documenting internal processes.”
Roth named the five top privacy ‘Do’s’:
- Understand the technology;
- Have strong contracts and agreements so that you can drive insights and innovations while complying with the laws;
- Put your consumers/users first (and have a clear privacy policy);
Maintain strong internal controls; - Have a comprehensive communications plan and keep an eye with respect to procurers.
Lisa Cohen, manager of environmental media at Bloomberg, said that everything in digital signage at Bloomberg connects, shows or links to the Bloomberg brand.
“It’s important for the brand’s authenticity,” she said, adding that there are rules that all Bloomberg digital signage follows:
- Integrate with the architecture as much as possible;
- Be Dynamic;
- Add value;
- Further the brand;
- Share assets across channels;
- Build on experience;
- Be authentic (align the same strategies inside and for public viewing).
Gord Nelson, CFO and strategic planning, Cineplex, said that the company, with about $1.2 billion revenue, is in the business of making connections with its customers. The company has a 70% market share of Canada’s movie theatre business, one of Canada’s largest food service companies, the Scene loyalty club, and several other businesses.
It owns EK3 Technologies, purchased last fall www.dailydooh.com/archives/87701 which acts as its creative arm. Among EK3’s clients were Tim Hortons and McDonald’s, so these firms, as well as Scotiabank, RBC, YoYo’s Yogurt Cafe (50% owned by Cineplex) and several others, now have close connections with the theatre brand.
The company has 1,500 network projection systems. There’s an advertising preshow on the screens. There are digital menu boards, digital lobby screens. Cineplex claims to have 93% of the cinema advertising market in Canada, and has approximately $122 million in media sales.
Going forward, said Nelson, the company looks at both the path to purchase and the point of purchase in developing its strategies. And while it is mainly in Canada, it is taking its model with advertising, services, and a hybrid, into the US, opening its first office there in Chicago. (It doesn’t hurt that both MacDonald’s and Tim Hortons are in the US – although Burger King recently purchased Tim Hortons – Ed.)
Cineplex is well-financed, with a market cap of $2.6 billion.
Jeffrey Rosen, director of real estate for New York’s MTA (including subway lines, buses, railroads and tunnels) brought the day to a close. The company nets more than $130 million in advertising, about 20% of that coming from digital, up from 15% in 2013.
With one contract winner’s name or names pending, and another advertising contract RFP to be announced, possibly in mid-November, Rosen was listened to closely, but gave no hints. He did, however, give a solid rundown on a lot of the MTA digital properties. Among them are: 108 double-sided urban panels; 145 On the Go wayfinding kiosks in 30 subway stations; 26 screens in Penn Station; a 10-screen Turner Digital Network (controlled by Turner Broadcasting for the first year);
The Metro-Railroad network; digital vending machines; four dioramas in Grand Central Station’s main concourse; plus the new Fulton Center screens managed by Westfield.
The DailyDOOH Investor Conference in 2015 will be held during the first week of November. Also being held the same week will be the DPAA Summit and Customer Engagement World (CEW, formerly called the CETW).
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