This month, we welcome Stefano Mereu, Chief Commercial Officer, Grandi Stazioni Retail SpA, Rome
- Please give us a brief description of yourself and your previous positions. How did you get involved in what you now do?
I was born in Rome in 1971. After graduating in economics from La Sapienza University and working in consulting, I began my career in urban infrastructure in 1999 with the sales department of Rome Airports. I became the head of retail development there and was responsible for major changes regarding the management of the commercial spaces in two airports in the capital.
In 2007-2008, I was sales manager at Lamaro Appalti, a major Italian developer, where I oversaw the planning and development of new infrastructure projects (malls, downtown galleries and major urban requalification).
In 2008, I joined Grandi Stazioni S.p.A as sales and advertising director, tasked with the management of the revenues of retail, advertising, real estate and customer service. I managed the stations’ transition from being points of transfer to shopping areas with leisure venues.
Since July, 2016, I have been the chief commercial officer of Grandi Stazioni Retail.
- Grandi Stazioni Retail leases space and provides traditional and digital advertising in Italy’s 14 largest railway stations. A year ago, GSR was privatized, sold by the Italian rail operators and its partners to Alba Bidco, a consortium composed of private investors Borletti Group, asset management firm ICAMAP and French private equity firm Antin Infrastructures for about 900 million Euros (about USD 1 billion). Why was this done? Did the sale affect the advertising signage in the stations?
The Italian Government decided in late 2013 to sell the commercial (i.e. retail and advertising) activities of Grandi Stazioni SpA as a part of a major privatization program. The goal was to find a partner capable of continuing and further enhancing the retail and advertising development inside Italian rail stations.
The Alba Bidco Consortium won the international tender in July, 2016. The traditional and digital advertising business is included in the newco.
- Back in 2014, there were major plans to expand GSR’s portfolio of 1,100 55” screens, 80 interactive totems (ie. free-standing signage) and 10 LED/LCD billboards. Could you bring us up-to-date on what you now offer and where they are generally located?
Our strategy is to grow our digital out-of-home advertising offer by winning shares from the TV and online markets. Our digital fleet is continuously growing in quantity and quality, and today our offer is found in all our 14 venues.
In the last 12 months, we have completely renewed our flagship network, which now consists of more than 700 55’’-70’’ screens. The GOTV is an Out-of-Home TV channel in the stations that reaches the ‘light TV viewers’ community with mainstream content and TV advertising campaigns.
In addition, we have an interactive screen network located in 140 positions in seven major venues. This network is set to double in the next three years.
Also, our MAXILED portfolio has seen further improvements with new iconic billboards in Milano. Today, we are managing 23 giant LED boards within the stations, some of which are also viewable from the road.
All the screens are safely network-connected, and equipped with real-time audience detection technologies. Part of our inventory is already available through programmatic SSPs (Supply Side Platforms). We are also developing our traditional OOH offer through continuous quality improvements of our billboards.
- You have been using BroadSign International’s content management software since early 2014. What did that company offer that made you choose it? Since then, have you added any other offerings from BroadSign?
We chose BroadSign as our CMS partner after a software selection process in 2013. After four years, its products are still fully compliant with our needs and expectations, and we have established a very good relationship, based on our common vision of the DOOH market development. We regularly share experiences and updates with our counterparts at BroadSign, and our input and requests are frequently realized in new product features.
- Around the same time, you made an agreement with Quividi for analytical measurement of the audience and the impact of advertising campaigns. What type of information have you gained from that and how is it used? Are you still also measured by Nielsen?
Audience measurement has always been a great challenge for our company and – generally speaking – for the out-of-home community. Since 2012, we have considered measurement as a key factor for our market positioning, deciding to use Quividi video analytics in every new screen. Nowadays, we have consistently counted millions of OTS (Opportunity to See/number of people who were exposed to the screen/campaign) every day, while also analyzing age and gender splits, dwell times and conversion rates. These data have been giving us a significant advantage in sales. We are able to provide real time evaluation related to screens, campaigns and venues.
Audience data are also successfully used to support our offer in the TV and Internet markets, which account for a major market share in the Italian advertising landscape.
In November, 2016, we successfully launched our programmatic offer, being one of the early players on the European market to do so, allowing customers and media agencies to autonomously buy real time measured audiences though their existing trading desks.
All our sales and campaigns are measured by Nielsen in order to allow media agencies to compare our proposals with all the major media choices for their advertising.
- In addition to advertising, do you host events, offer sampling or undertake any other experiential marketing in the stations?
Our company acts as an unique player for the commercial development inside 14 Italian historic landmarks. This scenario offers unrivaled opportunities for brands to create events, including on the storytelling advertising screens as well as in shops and temporary areas. In our spaces, we regularly host promotional and engagement activities, giving brands the opportunity to distribute samples, offer ‘phygital’ experiential marketing, and share experience on the social spaces and on our billboards. (Phygital is a marketing term that describes blending digital experiences with physical ones.)
- Do you have any new products planned for the stations in 2017? If so, is there a pilot program underway in any of them?
On the ‘hardware’ side, our main project is a pair of very iconic and innovative giant screens, to be launched this summer in Roma Termini Station. Using new Transparent LED technology, a digital landmark for the station and the city will be created.
On the ‘software’ side, we are continuously striving to optimize our Data Management Platform, improving the quality of our measurement and offers on the programmatic side. In 2017, we plan to extend the availability of our inventory by adding DSP (Demand Side Performance) connections.
- What are your plans for expansion over the next two years? Do you expect to go into other stations? Why or why not?
We have, as a company and shareholders, acquired profound know-how in retail and advertising business development in transportation and leisure venues. Since the privatization, we have been prepared to recognize and take advantage of any opportunities to aggregate venues and networks organic with our current assets.
- For 2017, do you foresee growth organically or through new advertisers? What percentage of your advertising is national and what percentage is local? Currently, who are your three largest advertisers?
We foresee a significant growth in 2017, despite trends indicating a flat market. Thanks to new investment in screens, technology and people, we will significantly improve our market share in advertising in the Italian market, gaining budgets from TV and online segments.
Our advertising is mainly national. Our main client list includes telcos (TIM, Vodafone, WIND), luxury brands such as Armani, Dolce & Gabbana, Ferragamo, as well as such major brands as Mediamarket, McDonald’s, L’Oreal, Benetton and more.
- When the new owners took over last year, they planned to improve the travelers’ experience ‘with an offer that adds emotion and value to their time spent in the station’. Has this been done, or how are they planning to do that?
The railway stations, architectural and dynamical icons create a space which compliments travel, where it is possible to have unique experiences and develop new opportunities. Thanks to the expertise of the new ownership, Grandi Stazioni Retail has improved travelers’ experience and attracted people living or working in the neighborhood with an offer that adds emotion and value during the time spent in the station. We offer to retailers and advertisers new business opportunities in exclusive locations. Related projects have already been launched, and the recent opening at Roma Termini of Mercato Centrale – a new food temple – is a perfect example of the new way to develop our network.
- As chief commercial officer and member of the Board of Directors, you head the media and retail divisions and are in charge of all revenue streams. How large a staff do you have and how are their responsibilities divided?
I manage a staff of 54 people (including colleagues and external sales agents), split in three units: Retail Leasing and Operations, Media and Advertising, and Marketing and External Communications.
- I understand that your products reach approximately 750 million visitors annually. How many of these are business travelers from within Italy and from outside of Italy?
The quantity and quality of visits represents one of the key values we offer to retail and food brands and media investors. Travelers represent around 80%; the number of non-travelers is increasing largely due to the new positioning of the station as a place to live.
Compared to the Italian average, visitors in the stations are younger, with a high level of education and social status and with high spending power.
Business travelers increased in the most recent years due to the transformation of the Italian railway system: the successful launch of high speed connections meant attracting a significant share of business travelers from the airport to stations, adding new value to our community. Nowadays, the train is the preferred means of travel between Milan and Rome.
- How long have you been using programmatic buying? What percentage of your inventory is filled by programmatic? Please give us your thoughts on that topic.
Programmatic is a key point in our sales and product strategy. As a company, we’ve been pioneering this matter during previous years, by combining existing research with audience metrics. Some of the ‘standard campaign features’ that we have been offering since 2014 have now become a defined ‘programmatic’ by our competitors. This covers flexibility in subject choice, conditional and daypart programming, audience real-time targeting and triggering, price based on real audiences, dynamic and social connected contents, and more.
Thanks to our technology integration process, a significant part (15%) of our digital inventory is available for programmatic booking in major agencies’ trading desks.
Even the sales skills will develop: we are including a data scientist in our team to enhance our product proposal skills.
- What roles have the economy and the often-changing governments played in the world of advertising in Italy in recent years? How to you see it playing out in the near future?
The advertising market in Italy has been heavily affected by recent economic trends. During the last decade, the whole market shrank from 9 billion Euros to 7 billion Euros, with TV and the web having more than 75% share. This was the main reason for our expansion into markets with specific products and technologies. Our long-term vision for DOOH expects a scenario in which only data-powered venues and offers will be strong enough to earn money from advertisers. In this landscape, publishers will need to develop a data strategy to measure, certify and share the behaviour of their target in a transparent way.
Thanks to our deep experience in innovative products, processes and approach, we are confident to further grow as a key player in this market for many years to come.