Ready Reckoner For VMG / CCUK (UK PDS 22M)

Adrian J Cotterill, Editor-in-Chief

As promised we have been crunching numbers again and looking at the likely financial aspects of the recently announced VMG / Clear Channel media sales agreement.

We reckon that within the deal their is a panel inventory which is worth over UK PDS 22 Million (based on a known number of 350 – 400 digital panels).

Here’s our take on how we worked that figure out…

First let’s try and figure out how much each screen / digital panel is likely to cost an advertiser.

Remember with VMG, because they have portrait style 6-sheet digital screens (their Iconic Pods) and NOT TVs hanging from the ceiling we can most PROBABLY compare their screens to traditional posters – perhaps even compare it to Clear Channel’s ‘Premium Panel’ rate card?

Clear Channel would charge UK PDS 653 for a ‘Premum Panel’ in a Mall which gives us a figure to work from (though not use itself).

UK PDS 653 might be a bit high for our calculations, so to be on the safe side and in order to take into account discounting etc. let’s say that a VMG digital panel would average out at UK PDS 400.

In-Charge periods are usually 2 weeks duration. We have been told that there are / will be a maximum of 6 advertisers in any in-charge period (Clear Channel will be selling 10 second slots on the VMG panel network we believe).

Based on that 2 week duration there are of course 26 billing periods in one year.

There are probably between 8 to 10 Iconic Pods in each Mall and each one is double-sided!!!

VMG have 22 Malls operational at present with two more to come on stream shortly – by the way we estimate that VMG will add another 10 Malls to their network by October 2008.

With those figures you can do your own calculations – worst case, best case scenarios etc.

But if we were to take, for the sake of argument…

  • 22 Malls
  • 16 Digital Panels Per Mall (i.e 8 x double sided Iconic Pods)
  • Fully Loaded 6 Advertisers Per Panel (unlikely early days but do’able later)
  • 26 week Billing Period
  • Average Panel sale of UK PDS 400

That works out at something like a UK PDS 22 Million annual income (STG 21,964,800) from the VMG network based on its size now – again, please note – albeit fully loaded with advertisers from day one!!

That revenue of course would be shared (somehow – we are not privy to the percentages) between Clear Channel, VMG and the Mall operators / landlords / property groups.

Over the 10 year length of the contract that is not an insignificant amount!!!!

2 Responses to “Ready Reckoner For VMG / CCUK (UK PDS 22M)”

  1. BH Says:

    £22M is dreamland I’m afraid – the whole Mall sector derives somewhere closer to £10 – £12M from all its other more established formats.

    That said – pound for pound – the digital signage should work harder for advertisers than the static stuff – at least notionally.

    With an industry giant (already trading other formats in Malls) helping with ad sales there is a bit more hope. (They won’t make a more logical case than has been presented previously but they do return greater commissions overall to the ad buyers and therefore they will be involved in more conversations).

    Influencing a massive audience just before they hit the shops is a good pitch.
    ie: increase sales now.

    Also this massive audience is a consumer of brands elsewhere in their lives so no reason that Coke etc shouldn’t be encouraged to use them. ie: increase sales in the future

    Retailers in the Mall, say Top Shop (not known for stuff other than Vogue (etc) and Bus T Sides on Oxford street (IE – close to the shops) should reinforce their ‘sales’ and other individual ‘sticky’ lines on the screens.

    Guess on split of revenue? Mall Owners 50, CCUK 25, VMG 25.

    They could do well – the sales agents should research who sold the first £250k contract on the Mall medium and make that person MD of their digital division!!!

  2. M Says:

    I was under the impression that the majority of VMG screens were landscape format and the the malls also have a good % of the screen time available to them so I am not sure you’re comaparison with 6-sheets stackes well nor does the actual revenue that could be earned. I think this estimate is way way out. Also a lot of the Amll contacts provided a fixed minumon fee to the mall owners regardless of any advertising revenue.

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