This month, we welcome Brendon Cook, CEO, oOh!, Sydney, Australia.
- You’ve had a year or so to digest the buy of Eye, making you the largest out-of-home media company in Australia. Tell us a little about your company before Eye and what oOh! now looks like since the buy. What has it added?
For the past 12 years oOh! Media has been on an aggressive growth trajectory driven by strategic acquisition and organic expansion.
Over this period, we made some 26 acquisitions and expanded our product suite beyond big billboards to include retail panels, place-based media solutions and experiential marketing. The vision behind this was to create a company that delivered innovative solutions for marketers to not only reach, but connect with their audiences while they were away-from-home.
The most recent acquisition of Eye was the next natural progression for us, as it increased our national retail and roadside inventory and expanded our presence into new environments.
The addition of the airport media – Fly – and university media – Study – advertising solutions, meant we could offer the most comprehensive away-from-home advertising solution. The integration of Eye also enhanced and accelerated our digital offering across our portfolio of advertising formats.
Today, we are the largest OOH company in Australia and one of the leaders in the New Zealand market. Through our Road, Retail, Fly, Venue specific place-based media and experiential offerings, we are not only delivering mass market campaigns but specifically targeted campaigns to audiences based on lifestyle, demographic or geographic environments.
- You had a 4.7% growth in revenue in 2013. To what do you attribute that mainly?
2013 saw oOh! deliver its 11th consecutive year of annual growth, which was particularly pleasing given it was a year when our emphasis was to successfully manage the integration of another large out-of-home company into our business.
In Australia and New Zealand, like online advertising, the OOH sector is growing and gaining an increasing share of advertising dollars. The increasing recognition of the effectiveness of the medium by advertisers, combined with our focus on delivering clients innovative solutions and our broad reach across the country meant we could achieve good revenue growth at a time of integration.
- Has the economic situation that affected several European countries and even the U.S. in recent years affected Australia? How has the advertising industry in your country been affected by happenings both at home and externally?
The Australian economy has fortunately been in a stronger position than many others. But having said that, we have certainly seen some changes to how the advertising industry operates as a result of the global economic uncertainty.
The most significant change we have seen is the shortening of lead times for bookings. While previously advertisers would book months out, it can now be weeks.
Consequently, that places pressure on us in terms of all our operating procedures and we are continually investing in systems, staff training and development to increase turnaround speeds.
With the advent of greater digital signage, this has somewhat lessened the challenge, but we have had to enhance our processes internally to meet these tighter time frames for both our digital and static signage.
- What percentage of your media is digital? I saw that you spent $30 million in the past year-and-a-half upgrading your digital screens and that your plans are for more digitization in the future. What will you be doing in that regard specifically in 2014? Is it your future aim to convert to 100% digital products?
Over the past 18 months, oOh! has made significant investment in growing our footprint of digital assets across Road, Retail, Fly, Study and other venues in our place based media offering. This has seen over 20% of our revenues currently coming in from our digital assets. This is significant when you consider that 11% of total industry revenue is being driven by digital.
We will be investing more in the coming two years to accelerate our digital asset roll-out, with the aim of digital contributing 40% of revenues in the next two years. But we do not see that we will ever be a 100% digital OOH player, as we don’t believe that digital on its own can deliver advertisers with the ‘big brand’ positioning that static has been proven to deliver. Static out-of-home advertising will always have a place in an overall media plan, given it is such a powerful brand building medium and call-to-action part of the outdoor inventory mix.
What I do expect we will see more of though is that, through technology and the proliferation of smart phones, we will see static billboards come to life with consumers. Already we are seeing brands build a ‘big brand’ presence through static billboards and then extending the experience through dynamic digital signs or use of other technologies such as our Tap or Scan technology (which offers QR Codes and NFC functionality to the billboard) or our Wi-Fi offering.
- Your website offers a Campaign Planner whereby a media buyer can check out all your sites on maps for specific targeting and can even try out creative in various formats and sizes. I personally couldn’t get it to work, but I was wondering if it is used a lot, and mainly for any particular sector?
Our Campaign Planner application was developed to help planners and advertisers access our billboard locations from their desk when late at night to help prepare for an early meeting the next day and get a better feel for what we can help them deliver.
While it is a good source that is appreciated by our client base, with oOh! having a strong commitment to personal service and providing them with strong insights and innovative thinking, most planning is managed by our sales team.
- I understand that you have 823 big billboards on roads across Australia, mainly near the big cities. Do you have the difficulty in Australia that many North America digital network operators have with some city, state/province governments to put up digital signage?
oOh!’s network of more than 4,200 big billboards nationally is the largest in the country and reaches more than 98% of the population.
These include major landmark sites in Australia, including the biggest billboard in the country and signage on almost all major roadways.
Among these billboards are a number of digital billboards in the states of Victoria and Queensland, and we have plans for further digital signage to be rolled out in the near future.
But, as many North American companies are experiencing, there are significant regulatory hurdles that make rolling out digital billboards a challenge. One big challenge with this is that there is no uniformity in regulations across the state jurisdictions.
- It says on your website that you offer signage at 500 retail centres? Is that accurate? Approximately how many screens would that represent? Would that also include menu boards in fast food restaurants?
Retail advertising in Australia and New Zealand has been a significant growth driver for out-of-home given the huge numbers of shoppers who frequent them.
Australia and New Zealand are unique markets when it comes to the role of shopping centres play in our lives.
In Australia, the average Australian visiting a shopping centre – of varying size – is at least three times a week. There are 1,350 shopping centers throughout Australia alone, all of which have a foundation major grocery store and between 20-200 specialty stores. Of those, about 550 are suitable for retail advertising.
oOh! has a presence in more than 500 of these centres with more than 10,000 advertising panels. This medium alone reaches more than 65% of the Australian population weekly.
- Airports are major for you with 121 million passengers passing through airports in Australia and New Zealand annually. Are most of flights international or local? What do your offer in airport advertising?
The addition of Fly into our product mix has proven extremely positive for oOh!, as it offers advertisers the opportunity to connect with the travelling public in an environment which has high dwell times.
The majority of air travel in Australia is domestic, with the Sydney-Melbourne route being the fifth busiest in the world. As a result, oOh!’s focus has been on building a premium, world class advertising network across Australia and New Zealand. Overall, we have the largest airport advertising network with a presence in 19 terminals across 10 markets.
Over the past four years, we invested over $20 million to create airport media with high definition digital screens and free Wi-Fi for consumer engagement. We also offer internal and external static panels and experiential marketing solutions within each terminal.
For example, clients like Google, HP and Microsoft continue to be new and bigger spenders as they seek to engage the difficult-to-reach business markets with innovations that match their brand’s positioning.
- I see that you also offer experiential campaigns. When you do an experiential campaign, is it also usually tied to a digital signage campaign?
Our experiential offering is offered as a stand-alone offering or as an integrated part of a wider OOH campaign. More and more we are seeing greater integration between our Retail, Fly and Study infrastructure – both static and digital – and experiential campaigns.
For example, during last year’s winter we ran an innovative campaign for Quaker Oats which involved mobile marketing, static and digital signage and in-store sampling of its porridge range.
The multi-channel retail strategy enabled Quaker Oats to reach, connect and engage with shoppers on the path to purchase at more than 80 strategically targeted shopping centres. When shoppers entered the store, they were sent a mobile message offering a redeemable in-store discount and advised of the sampling. Then, as they walked through the centre, the Oats were advertised on static and digital panels which reinforced the brand and sampling, before reaching in-store sampling at the point of purchase.
- What role does social media play into or with your offerings?
Increasingly, we are seeing brands look for ways to engage consumers with multiple channels in an integrated way.
We have seen great OOH campaigns that have driven social conversation and vice versa. While we are still in the early days of integration, we have helped clients work out how they can integrate the most traditional media – OOH – with new media to amplify campaigns beyond what either medium can offer.
One execution of how social can integrate well with OOH is the recent campaign we did with Virgin Mobile. The Virgin Mobile campaign, Game of Phones, saw oOh! deploy a purpose-built dynamic messaging platform which enabled Virgin to send real-time messages to participants on our digital network which helped drive social gameplay and conversation.
Another campaign we ran in conjunction with the Outdoor Media Association for the Australian Literacy & Numeracy Foundation (ALNF), saw us roll out our Interactive Touchscreen Technology which allowed passers-by to take a photo of themselves ‘raising their hand’ for Indigenous literacy. The images captured were broadcast onto a big digital screen at the Westfield Bondi Junction shopping centre and tagged to individuals’ social media accounts where they could then proceed to make a donation to the cause.
- You were a public company but, I believe, became a private company following a major investment by CHAMP Private Equity. Please tell us about that and how it has affected your plans for growth or expansion?
oOh!’s genesis was a public company – initially called Network Outdoor before being rebranded as oOh! Media after our acquisition of Media Puzzle. We were listed in 2002 and over the ensuing 10 years our investor mix changed to include the likes of Macquarie Bank and WPP.
However, ultimately for us to realize the growth we had planned, we needed to have even greater access and speed to capital than was realistic as a public company of the size we were. That is where CHAMP Private Equity came in and why we as a company recommended to our shareholders to accept the proposal for CHAMP to delist the company from the ASX to become a private company. Through this, oOh! has greater access to capital enabling us to accelerate our growth plans and tremendous support from some of the best business brains in the country.
- Why did you sell your Indonesian business?
From the very outset of the EYE acquisition, we had the intention to sell-off the Indonesian business at the right time. The Indonesian business had a very different operating model to that of Australia and New Zealand. Ultimately, we had the view that the capital in the business could be better used for our ANZ business and enabled us to accelerate some of our priorities, such as further roll-out of digital assets.
The offer by PT Vega Cipta Utama, we believed, was a good result for us and for the success of the Indonesia business.
- I see that you have airport business in Auckland in New Zealand. What else do you offer in N.Z.? How big is that market for you?
The Fly offering at Auckland is just one of the products that have made New Zealand a core part of our growth strategy. Key to this is our retail and Study solutions, which have been delivering strong growth for us since we gained the NZ business as a result of our acquisition of EYE.
Currently, we have significant presence with the Study and retail products, with coverage across Westfield, KIPT (Kiwi Income Property Trust), AMP and other retail groups, including shopping centres such as Sylvia Park and Riccarton and university campuses including University of Auckland and Victoria University.
We recently announced our plans to further invest in New Zealand to deliver world class digital out-of-home advertising to provide marketers with more innovative ways to connect with consumers. We are also increasing our retail and university infrastructure across New Zealand.
- I believe oOh! was founded from a merger of Network Outdoor and Media Puzzle in 2007. What is left from those two companies?
In 2007, we, as Network Outdoor, made an acquisition that was a game changer for our business after listing in 2002. While we had made 13 acquisitions to expand from a large billboard owner and representative agency for other owners to having road, retail and experiential offerings, the acquisition of Media Puzzle gave us a stronger retail footprint.
This saw retail advertising in Australia really mature and made us the market leaders in this format. When we acquired Media Puzzle, we reviewed both organizations’ strengths and drew on the best of both during the integration, as we did with the acquisition of EYE.
- What is your own personal background? And what drew you into digital out-of-home?
Out-of-home has been in my blood since the day I entered the industry as a teenager via sales.
I recognised back in the ‘80s that there was an opportunity to give individual billboard owners representation with national advertisers. So after 10 years in the industry, I started Network Outdoor and set about creating one identity, one process and sales team to represent individual billboard owners across Australia. With the formation of Network Outdoor, I continued to grow the business, built and acquired billboards and entered into other areas of out-of-home advertising.
My approach has always been to continually revisit the foundations of the business and keeping up-to-date with what’s going on across all areas. When it became apparent that the market was ready for digital and the technology was there to support it, I saw digital as being an area that we needed to be involved in. However, to me, it was not just about being in digital for digital’s sake, but to ensure that it added marketers new ways to engage.
I see digital as an extension to traditional static billboards – traditional does and will always be the most effective way to build brands, but digital enables marketers to be more creative and to take those connections with the consumer to a new level.
This is not only with regard to digital billboards that have dynamic content opportunities, but also through technologies such as QR Codes and NFC, where the conversation with the consumer can be much deeper. Then there are our own technologies such as day-parting or temperature-parting, where we can display digital advertising at a point in time that has greater relationship with the product. For instance, a recent campaign we conducted for Unilever, where adverts for its Lipton Iced Tea and Magnum Ice Creams were displayed when the local temperature hit a certain level.
- In your markets, what group(s) is using your NFC, QR codes and Wi-Fi offerings? And social media? How are they doing so?
The use of NFC and QR codes is increasingly being used by advertisers as an extension to their traditional out-of-home activity as a way to get greater engagement with the consumers. We have seen a range of executions being rolled out, but the most exciting one we have seen to date is a concept we developed for Google. In a world first, we gave consumers the opportunity to take control of what appeared on our digital billboards via their smart phone by using our Tap or Scan technology.
We are also finding advertisers increasingly opting for involvement of our free Wi-Fi offering in airports, Cafés, Study and other Venues, where they fund availability and as part of registration see users redirected to one of their websites. The Wi-Fi offering is becoming increasingly sought after, given it attracts around 500,000 unique visitors a month. We have established permanent NFC and QR connection to around 7,000 sites in Australia and New Zealand.
- And being so far from North America and Europe, do you have a chance to attend many conferences or trade shows around the world? Which particularly interest you? Does your company exhibit in them as well?
My long-held view is that in order for us to continue to be market leaders, and, in fact, introduce world-first innovations, we need to keep learning about not only the OOH sector but new technology advances.
We attend a number of major conferences and trade events to ensure we are always well informed. We also have a significant knowledge-sharing program in place for our team at oOh!.
- What will we see in innovative products from oOh! in 2014-2015?
Innovation is a key to our business success and has been for many years.
This has seen us introduce products such as gesture-control digital panels to dispensing retail billboards, where consumers can Tap or Scan or send an SMS to collect a product sample, discount voucher or other collateral. In a recent campaign we ran for an FMCG client, these dispensing retail billboards distributed over 20,000 recipe ideas in just a four-week campaign.
We are working on a range of other initiatives to take to market over the next year which will drive new levels of engagement.
One of these innovations, which launched in February this year, is Australia’s first integrated online and digital out-of-home content platform in the notoriously hard to reach tertiary education sector across 50 universities in the country. Hijacked is a news, views and pop culture website for students, by students. The website connects students across the country; a bit like a giant online hangout between lectures and directly influences topical content being displayed on the oOh!’s Study network of digital billboards in student hubs with high dwell times.
We are also rolling out an exciting research project that will help advertisers understand the iconic triggers that connect the brands with consumers, so their out-of-home executions will be more effective.
- According to your website, 15% of Australian adults travel to work by train. Do your have, or plan to have, any digital media to reach them?
Public transport usage in Australia is relatively low when compared to other markets. At this point of time, we do not believe the level of investment required to access the currently available public transport out-of-home products (such as train stations and train and bus internals) would deliver rates of return that we are achieving from other environments, or improve our current product offering ROI to clients.
- I see that oOh! supports many charities. There so many causes. How do you decide which charities to support, and how often do you make changes?
We do feel that as a company that we have a role to give back to the communities we operate within. Our support extends for financial contributions through to in-kind contributions. One thing that we do consider in evaluating the charities we support, is the personal connection that our staff or clients have with the charities.
- I saw something on your website referring to oOh!pen Season Comp. What is this?
One thing that we at oOh! have been curious about for some time is why, come January and February, the investment in Australian media experiences a significant dip, despite engagement with out-of-home being at its highest levels.
Sure, we could understand why advertisers may want to pull back spending on the TV stations – when they go into none-ratings periods and the audiences leave in droves to enjoy outdoor pursuits like surfing, swimming and the sun.
But when you consider that independent research shows Australians are three times more likely to be away from home during this period; 68% more likely to be in shopping centres; and twice as likely to fly, we wanted to show advertisers how valuable OOH is in this period.
So we declared the months of November to February our ratings period – Open Season, or as we call it oOh!pen Season.
In a way it was a fun way for us to help promote the OOH sector in Australia and help it gain a greater share of the advertising pie, which as market leaders we are committed to doing.