This month in the “CEO Spotlight”, we welcome Tijmen Bos, Librium.TV, Amsterdam who has answered 10 questions that were put to him.
- What’s the greatest challenge facing Librium.TV at the moment?
The greatest challenge is to increase our advertising income, accelerate the income from our production studio, change our business model (decrease investment risks) and develop new networks – all at the same time!
- It’s widely held that you have the best McDonald’s implementation anywhere. What do you think sets your work with McDonald’s apart from everyone else?
First I would say that the Dutch McDonald’s management dared to step into this new (digital screen) world at a time (2004) when at the time no where else could you find screens – let alone a network of screens – being integrated into the marketing mix.
The McDonald’s management was open to a start-up like Librium.TV and listened to our ideas and more importantly was willing to discuss a flexible business model in which third party advertising was an essential part of the mix.
Secondly, Librium.TV was forced by McDonald´s to test and prove (and then test and prove again) all the systems before installing 25 pilot restaurants.
It was measured for two months. McDonald’s customers were question thoroughly and the results and outcome had to meet certain minimum pre-set expectations.
Also the effect on restaurant sales had to meet a certain minimum standard.
This enormous challenge combined with an investment risk of over EUR 1 Million (pilot only) meant that Librium.TV just could NOT afford for it to fail.
*Librium.TV for McDonald’s is an integrated network of “lounge TV, counter digital signage, wireless internet and the business network itself (internet, intranet, cash terminals, pin payment), background music as well as synchronised audio for advertisement plus digital menuboards and internet terminals for some of the restaurants.
- Your largest shareholder (the Dutch newspaper group Telegraaf Media Groep) recently increased their stake in your business, should the industry feel good about this?
For the industry including advertisers and media agencies this is a strong signal that Telegraaf is very serious in establishing a strong and leading market position in DOOH.
Of course, the industry is confronted with a lot of sceptics like any other new and over promised industry. Since 2004 the market has formed questions, trials, promise, promotions, lots of PR, hype, over promising and then back to questioning.
The industry needs strong parties which are here to stay and have the ability to really develop advertising solutions which add value to the existing media landscape. Telegraaf is a market leader and holds a strong position in a lot of media segments (both offline and online as well as in radio and TV) and wishes to do the same in DOOH.
I feel that the industry is finally recognising this strategy and now understands that Telegraaf / Librium.TV is a strong party which can and will further develop this still rather new marketplace.
- The Netherlands may be the most developed nation in Europe with regard digital signage, how do you see the Dutch market at the moment and going forward?
Librium.TV is strongly focussed on the Netherlands and this is how we see the Dutch market at the moment…
Consolidation of market parties.
In the early days (2004-2006) everyone was doing everything, today we see companies specialize in one or two activities. Also, to survive companies need scalability and therefore they either merge, form strategic alliances, buy or are bought (or disappear).
Advertisers trying again.
Advertisers, both local and national, have all tried a number of DOOH media networks.
Because of the gold rush in the early days and the over promising of this (new) market, many parties then started to see all of DOOH as hype.
However, as marketers experience more and more screens in their own out-of-home activities they are judging again what screens mean for their brands. As the number of screens further grow this process will speed up and there will be a new momentum and we are seeing advertisers and brand re-enter and re-visit the DOOH market.
Strong growth in Retail.
In all point of sale locations it’s rather easy to have screens add value to your marketing mix and sales promotion. Since prices of hardware have fallen even further and digital signage software has become available, pretty much off the shelf we foresee a strong growth of DOOH in retail.
The added value of screens in other locations (public transport, stations, stadiums, etc.) is more complex. The entertainment and news factor is a lot more important which can mean a higher cost for content.
As the consumer is used to million dollar programs on household TV it is hard to both entertain the OOH-consumer and be competitive for advertisers at the same time.
We feel that the growth of this type of DOOH network will be less fast and need a bigger commitment of location owners (perhaps even a change of business model).
- Have you seen any brands doing anything particularly exciting with your network? What sort of campaigns have you been running?
We see further integration of spot and non spot in our programs.
Typically our loop length is 30 to 60 minutes with a commercial break every 2 or 3 minutes.
We’re currently producing great content programs on Travel, Cars, Movies, Music, Games which are very entertaining and add real value to our advertisers at the same time.
Apart from this we see that a lot of national brands optimize their campaign with local add-ons (like “available at…”). For all kinds of brokers (cars, jobs, houses) we developed a tool which enables them to directly book and distribute their campaign to their own choice of locations. A web based user interface lets them select locations and decide what to air in their own layout (e.g. this car, for that price, with features like…, available at….). They can manage their own campaign without needing any support from Librium.TV.
Librium.TV currently has 8 different networks and receives a wide spread of advertisers from FMCG to real estate. The biggest advertising income is gained in Travel, Cars, Entertainment and Telecom.
Education, Retail, Jobs and Government campaigns are also frequently seen.
We also receive about 30% to 40% from regional and local advertisers.
- What’s your thoughts on OOH metrics and do you think any of the automated audience measurement systems will help the industry gain momentum with the advertising industry?
Absolutely these systems will improve the accountability of our industry
We feel that the software needs to improve a bit further and privacy matters need to be solved, but yes this will all help the industry.
- We have had a lot of debate about Scala on our blog – especially as we are often perceived to be somehow anti-Scala (we are not BTW – ed), you are one of their largest users, what’s your thoughts on them and their technology?
Indeed, we have been using Scala from the very beginning. Scala has absolutely kept its promise over the past couple of years; it’s a good distribution and playing tool. Of course, since then (2004) a lot has changed.
New vendors have entered this market with new solutions and the industry has benefited from all this great development.
We are currently running a test with 4 different CMS solutions. All CMS / player software vendors now are typically “under construction”, heading towards a full fledged online solution.
Scala is also improving their InfoChannel software especially by integrating Charting Pro, the scheduling software tool from the recently acquired company Misa.
Librium.TV will constantly challenge Scala or any other business partner to deliver state of the art products and services which helps us servicing our clients.
- You were instrumental a few years ago in forming DOOHM but we haven’t heard very much from them lately, what is DOOHM up to and what part do you see industry associations playing in our industry?
By the end of 2005 a lot of different players were entering our market, all over promising their initiatives, both in numbers and in time. We felt that the big advertising companies and their agencies would need unity and clarity in at least 3 matters: market definitions, research and currency.
DOOHM has officially existed since the beginning of 2007 and is formed by the four biggest players in terms of reach and advertising income.
DOOHM is in the process of sharing the results of all individual research and harmonizing this into a standard format. Also, DOOHM have reported the advertising income to Nielsen who monthly report this information to our business partners.
As well as all of this DOOHM plans to produce a clear and up to date market overview including parties, network info, reach etc.
- Is their any technology in the industry that gets you particularly excited?
Yes BUT the question is however whether advertisers get excited from any technology?
And the answer is categorically a 99% no with regard to all the fancy technology options. If the technology helps to improve accountability I feel excitement.
However most of the time, accountability is mixed up with sales on leads only which is just one aspect of the effect of an advertising campaign.
- How do you see Librium.TV in 12 months time? Do you guys have an exit strategy or any master plan?
In 12 months Librium.TV will have strengthened its dominant market position in terms of share of number of screens / reach and advertising income.
We have a master plan for the company and we would not want to miss the future growth and development – so, an exit is not part of the strategy!!