Also lined up for the first part of the year is Raul Nunez from ViuOne in El Salvador SA!

Remember you can view our CEO SPOTLIGHT archive by clicking here.

1. You started
   

   Devang and Gaurang Shah

   your company with your twin brother at the young age of 24 in 2006. Where did you get the knowledge and experience to make such a leap of faith into the digital signage world?

   After graduating from the University of Pennsylvania with dual degrees in Finance (from the Wharton Business School) and Electrical and Systems Engineering (from the Moore School), I worked at McKinsey and Company’s New York office for 2 years. Post McKinsey, I was in Mumbai for a summer vacation before I was scheduled to start work at a leading private equity firm in Boston.

   It was during this vacation that I had the opportunity to witness the booming media and retail industries of India. After surveying over 50 malls and retail locations, the empirical evidence suggested that there was no solution in the market to communicate to consumers in a dynamic eye-catching way that was possible via a Digital Poster. This seemed like a good business opportunity to explore and so I started the company as a summer project. We negotiated with several mall owners and installed a few screens to test the business case.

   When our first major break came with a pan-India tie-up for all the Café Coffee Day outlets, this summer project was about to balloon into a 22 city network. It was the perfect opportunity for me to realize my dream of working in India and running my own business to solve a unique problem instead of just replicating what was already being done. It was time to take the plunge away from a cushy corporate career.

2. I notice that your university education was in the U.S. at the University of Pennsylvania’s Wharton School of Business. What made you decide to go there rather than a university in India or elsewhere in the U.S.?

   After securing full scholarships to the Asheville School, one of the premier high schools in the U.S., Devang and I had a first hand exposure to the US educational system. We knew then that we wanted to pursue our higher education, also in the U.S.. We both had a strong interest in business, given our upbringing in an entrepreneurial family, as well as math and sciences. The University of Pennsylvania offered us the perfect solution where we could pursue both Business as well as Engineering degrees at the same time in the world’s no. 1 ranked school. As an Ivy League institution, the quality of the program and the experience was unparalleled where we were learning, not just from our classes, but from the students themselves.

3. I see that you have investment capital from Sequoia Capital and Sam Balsara, chairman and managing director, Madison Communications. Was it difficult to get financial backing? What was your advantage? What advice would you give to other entrepreneurs looking for venture capital assistance?

   Sequoia Capital has a history of backing young entrepreneurs with unique ideas. From Google, Yahoo!, to Cisco, it funds startups in the technology and media space. When we presented our ideas to Sequoia, it was very receptive as this was a new media concept and a very scalable model. Our company was at the nexus of the retail, media and technology boom of India and, with a large, growing population that spends more time out of home than in front of the TV, this concept is slated to take off. In addition, its management was appreciative of the education and professional background we had, as well our family history of setting up various businesses.

   Besides the basic idea and our background, though, what really worked for us was that we had basic proof of a concept already in the market. We had a few contracts secured with the malls; a basic team in place; and we were about to start rolling out to the Café Coffee Day outlets pan-India. Our creative, technology and approach were unique compared to anyone else in that we were making the digital signs interactive posters that could be linked up to the Internet and mobile phones for creating campaigns with a much broader appeal to advertisers.

   Sam Balsara made an investment and joined our Board of Directors around the same time as well. From his vantage point as one of the largest media agencies of the country, he has the opportunity to see across traditional and new media. Digital Out-of- Home, although a relatively new concept at the time, was something he could instantly appreciate as the ‘next big thing’ in media.

4. What kind of information is carried on your screens? Is it all advertising? How long is a loop?

   DSN has made a paradigm shift of providing advertisers the Interactive Digital Poster concept. Through various innovations, DSN has changed the landscape of the DOOH industry and made it an option that more and more advertisers are considering as seriously as traditional media like TV, Radio and Print. DSN has a dedicated creative team that makes content (videos, animations and pictures) specifically for the medium, instead of running TV commercials.

   DSN has also networked all its screens to centralized servers to provide advertisers with solutions that were, until now, impossible in the OOH space in India – e.g. DSN dynamically changes content by linking the screens to advertisers’ websites. Using Bluetooth technology, consumers interact with the screens with their mobile phones through various applications.

   DSN has also tied up with companies like ESPN, CNBC and Aaj Tak that provide sports, news and stock market updates to provide consumers with live content. In addition, DSN offers innovations like the Roadblock, where multiple creatives of a single advertiser are played on the screen without sharing the airtime with any other advertiser . DSN has also introduced the concept of Videowalls where the Digital Posters are combined with traditional static hoardings, giving advertisers the advantage of both dynamic advertisements and traditional static messages.

5. I read that you have succeeded in targeting more than twice the number of eyeballs than your nearest competitor. What kind of measurement system do you use?

   The DSN network is spread across the top 21 cities of India including Mumbai, Bangalore, Delhi, Kolkatta, Pune, Ahmedabad, Hyderabad, Chennai, Baroda, Indore, Nasik, Surat, Ludhiana, Amritsar, Jalander, Patiala, Panchkulla, Chandigarh, Lucknow, Kanpur, Kolhapur.

   Over 1,500 LCD and LED panels that are installed in various public places focus on targeting high income, upper middle class and middle class audiences in the 15-40 age groups. DSN has built a network in one of the most sought after Youth & Young Adult Hangout Locations (Café Coffee Day, McDonald’s and colleges) and the Western and Central railway stations of Mumbai.

   Like all networks, the metric for measuring eyeballs is footfalls in each location. Statistical data from our partners help us assess the number of footfalls in all these locations. For Café Coffee Day and McDonald’s, we get information on how many transactions have taken place on a monthly basis. For our railway networks, we know how many tickets are sold on a daily basis. A lot of this information is also publicly available.

6. You have 1,500 screens in 22 cities Do you have plans to expand outside of India. If so, where and when?

   Yes. We are always actively looking at all sorts of opportunities globally, since we have developed the expertise of setting up and running networks and costs that are far below the global benchmarks. Global networks would have to, of course, be in partnership with some local firms who can carry out the on-ground maintenance and sales functions. One market that looks very interesting at the moment is South Africa. We are also looking at content development and post-production work tie-ups where networks across the world leverage our creative prowess for their clients.

7. What sizes are your screens? Who provides them?

   The majority of our screens are 42” and 52”, with select screens being 32”. In certain railway installations. we have also installed 22” panels, as they are catered to one-on-one viewing by people purchasing tickets. All our screens are sourced locally through select distributors.

8. You have clients mainly in retail outlets such as McDonald’s, Café Coffee Day and Starbucks, as well as in railway stations. Into what other fields, if any, do you hope to expand?

   We are focusing on the Youth segment via our retail tie-ups with Café Coffee Day and McDonalds. In addition we are focused on masses through our railways station ticket counter networks across India. We hope to continue to expand our base in these two segments of youth and mass transit. Retail and airports are also options we will continually evaluate, albeit more cautiously, as the advertising market is yet to fully develop in these segments.

9. You and your co-founder brother had similar education and backgrounds. How did you decide which of you would be CEO in the company? What is your strength?

   Yes, both Devang and I have very similar backgrounds. However, I actually started the company in 2007 and Devang joined the company two years later. My prior experience has been more management/strategy related via McKinsey, and I’ve also had more operational experience by virtue of starting up from scratch. Devang’s focus has been on the sales effort of the company, as his prior experience on Wall Street has provided him excellent skills of sales and negotiations. However, we work in a very collaborative manner, so while I am the CEO, we both effectively run the company together like Co-CEOs.

10. How strong is the DOOH industry in India? Does the government encourage the industry? Are there any drawbacks for its expansion?

    From our position as one of the largest networks in the country, we believe the DOOH industry is reaching a mature stage very quickly. We have seen consistent strong revenue growth since our inception. Advertisers have started considering our networks as part of their core marketing plans, with over 80% of our revenues coming from repeat business.

    With the high recall rates DSN is able to achieve through its innovations (the last survey revealed an 83% recall rate), it is making a huge impact in the way clients are able to communicate with their consumers. Via the significant value provided to partners, we are seeing a strong buy-in from them, as well – e.g. in Café Coffee Day and McDonald’s, we showcase relevant information for the patrons, such as special offers, menu items and interesting content. In the railways, screens are dual display units showcasing ticket information and important railway announcements for commuters.

    Recently, we hav been seeing various players of the DOOH industry asking us to help consolidate operations and aggregate networks across the country, due to our superior expertise in sales, technology, operations and creative. This has become a whole new business model for the company as it plays a pivotal role in shaping the industry and building scale across networks.

    There is also a growing scope for installing private screen networks for various government and private enterprises. Instead of selling airtime to advertisers, network operators’ roles are changing to provide a communication link between the management and employees and customers.

This month, in the CEO Spotlight, we welcome Lon Troxel, Executive Chairman and CEO, PlayNetwork, Redmond, Washington State.

1. I believe PlayNetwork now has 65,000 locations in 60 countries. Prior to acquiring Channel M in Oct./09, how many locations did you have worldwide and in how many countries? What did each company offer in services in this acquisition?

   Prior to the Chanel M acquisition, PlayNetwork had more than 60,000 locations and was operating in over 70 countries. However, the majority of these accounts were audio based customers combined with a small number of video accounts. By acquiring Channel M, PlayNetwork added the largest video account base in North America to its Brand portfolio. The combined company now supports over 190 Brands with a complete package of media services including audio, video, and new media solutions for online and on device applications.

   The vision is to be able to deploy creative assets across all platforms and consumer touch points so that consumers can engage the Brand whenever, however, and wherever they choose. The combined companies allow PlayNetwork to fulfill this vision creatively, driving Brand relevance and ultimately consumer behavior for the benefit of our clients.

2. There have been other mergers or acquisitions in PlayNetwork’s past as well – Crows Nest Entertainment among them. Are there more coming in the future? What would you look for or like to add?

   PlayNetwork is always looking for strategic opportunities for growth in any merger or acquisition. The recent Channel M acquisition allows us to gain greater scale in the media marketplace by acquiring a business that is complimentary to PlayNetwork’s capabilities.

3. How do you choose the music geared for your locations and target audiences?

   It’s all about making connections with that brand and how that extends to their customers. We first approach our process from a business and marketing standpoint before we draw any conclusions on what the brand identity will sound like.

   Typically, our Producer will enter into a consultation with the client’s marketing or visual merchandising department. From this session we’ll assess their overall presentation and how they wish to be perceived by the public, what demographic and lifestyle is their target, and what is the extended range of who they are trying to appeal to. Are they trying to appeal to a more targeted audience or to one with a broader base? What kind of energy or vibe are they looking for with the music? Do they want to play up to people’s intellect or assure a comfort level by staying mainstream?

   Based on these criteria and judging by the feel of their business, our Producers then start building a Demo that will form the foundation of the branded sound. They will search for distinctive music that really stands out and portrays the brand in a very strong manner based on style, tempo, feel and energy and demographic appeal. Plain and simple, does it speak to the brand and leave an impression?

4. How important is Music to the DOOH world?

   Music and video are both media elements that shape the overall brand experience to a targeted consumer. By including music we’re looking to bring parity in the DOOH mindset and create the whole experience, audio and video. Music is just as complementary to the brand and to the environment as video is; they are sensory elements of the whole experience. The complimentary reinforcement they provide to create the whole experience is ultimately why we’re in the media business.

   Looking ahead, the relevance of music in the DOOH environment will only increase and improve with targeted, branded music as retailers look to provide more fully integrated media experiences.

5. Describe what we see on your screens in terms of visuals, informational messages and advertising. And what percentage is taken up with ads?

   We first focus on developing and airing appropriate content for our consumers. We take into account the demographic profile, in-store experience. You will see any form of content on screens ranging from original content we film and edit, to music videos, news feeds, and user generated content.The key is that the content is all catered to the consumer. Advertising is typically up to 20% of the content mix and the advertising partners are always on brand.

6. Do you have your own creative department and/or sales staff?

   We have a full-time in-house creative team staffed with Music Producers, Photographers, Editors, Motion Graphics Designers, Animators, Writers, and other creative roles required to develop custom music and video content programs for our clients.

   Our creative staff is made of top-notch creative talent with many years of experience all coming from the entertainment industry (Music, Movies, TV, Videogames) on both sides (artists and business). This in-house team is capable of handling all aspects of content production for our clients.

   Our sales organization consists of a national direct sales team focused on multiple location accounts worldwide, and we also operate a Value Added Reseller network of nearly 100 resellers who sell our services in their local markets.

7. Do you still use local system integrators even when dealing with your national or global accounts?

   Yes we do. We utilize over 300 independent Audio/Video contractors who have been certified and trained to provide installation needs throughout North America and internationally. Each contractor is put through a standards based evaluation to ensure that they are delivering the best possible service that meets PlayNetwork’s industry leading standards.

8. I read that you have a partner ecosystem? What is this?

   We have a consortium of business relationships, contractors and manufacturers who help contribute to the success of PlayNetwork. Through these relationships we continue to be scalable, strategic, and forward thinking.

9. I believe that PlayNetwork helped in the full design of Under Armor stores. Tell us how that came about. Do you get involved with the design of many of the outlets in which your systems are present?

   We had the opportunity to work in the conceptual design/build of the first, Under Armour Retail store which resulted in a Store-of-the-Year award from Chain Store Age. Under Armour was looking to create a destination experience for their customers by using compelling media as an anchor. We worked closely with their retail team from concept inception to design an integrated audio/video system that helped convey the motion and energy of their brand throughout the retail space. This resulted in the illusion of entering a sports stadium via a tunnel, immersing the customer in the brand with a multi-screen array and sound effect systems. Once in the store, the customer is surrounded by a professional sound system and 120” translucent screen that displays Under Armour commercial content and brand animatics.

   Based on the success of this concept, they went on to build additional Retail stores in Chicago, Baltimore and Boston. We also support their Outlet stores, tailoring the system design and approach to the audience and environment. This showcases our ability to work at the conceptual level with the design of systems. It also highlights our ability to support multiple experiences for a brand while maintaining a consistent experience for the customers.

10. I believe that you were named one of Deloitte Fast 50 fastest growing companies in 2009. Can you itemize that growth in terms of size and revenue?

    Since 2006 PlayNetwork has enjoyed an average net annual subscriber growth of 38%, and an average net revenue growth of 35%.

11. What do you foresee as the future for PlayNetwork in 2010? And in five years time?

    We are proud of our past and excited about the future of PlayNetwork based on our position in the marketplace and our existing brand relationships. Over the last five years we have experienced tremendous growth from a music company to a media company with a unique position in the marketplace.

    This position in the marketplace creates the ability for us to continue that growth in the next five years. Specifically, PlayNetwork’s focus has been on building a suite of services that allow us to create, control and distribute brand and entertainment content in-store, online and on device. The pieces are all now in place to accomplish those objectives.

    In 2010 we will focus on deploying our solutions, engaging Brands with creative content and building case studies and testimonials that prove success. Over the next five years, consumers will change the way Brands interact and tell their story. PlayNetwork will be there to support those changes with the right platforms and marketing communication channels that allow them to remain relevant to all of their consumers.

12. You worked as president and CEO of DMX Music before becoming a consultant at PlayNetwork, and you also were with AEI music network. How did you get into the music business?

    I got my start in the commercial music business as a local dealer of AEI & 3M music. My success there allowed me to grow becoming a Muzak franchisee for Northern Nevada, Oregon, and Washington which then on to greater success at AEI and DMX before coming aboard PlayNetwork.

13. What did you learn at these companies that you can apply at PlayNetwork?

    At every touch point in my professional career I have grown and carried that experience to the next venture. The Marine Corps taught me about teambuilding, leadership, and coaching. I learned the trade of the commercial music business and how to apply management skills to business at Total Sound Inc. and Audio Group. At AEI and DMX I learned how to grow a business from regional to national to international. Throughout my career each step builds on the previous one, and I continue to grow and learn here at PlayNetwork as our company grows and as we evolve in the marketplace.

14. What do you see as your personal strength? And your personal weakness?

    I find my strengths are in team building, personnel coaching, and mentorship. My personal weakness has to be my lack of patience for accomplishing goals and objectives, which lends to my overall sense of urgency.

15. The news articles page on PlayNetwork’s website seems not to have new material since 2008. Have you purposely kept out of the news – and if so, why?

    We have actually continued to be featured in articles and news releases over the last year. In 2009, PlayNetwork was included in Smart Money, Retail Customer Experience, Stores Magazine, Chain Store Age, the L.A. Business Journal, and DDI Magazine among others.

16. Can you tell us a little bit about your company’s work outside the U.S., and your future plans in other markets, especially in Europe?

    PlayNetwork is committed to expanding our reach in all Market territories to better serve our global clients and to attract new clients. We believe that there is unique value in our suite of media services that drive business and marketing results that are beneficial regardless of the headquarter location. What Brand doesn’t want to drive traffic and transactions, localize and regionalize content, speak to consumer segments in a relevant voice, and create a distinctive environment? Those objectives don’t just exist in the U.S. and PlayNetwork intends to leverage those as our core competencies around the globe.

    We continue to build our Value Added Reseller networks internationally and look to formulate a point of presence in Europe in the upcoming year. This commitment to expand and better serve our clients and brands is a significant reason why we’re excited for the future of PlayNetwork.

1. You started FrameMedia in Jan./07 to offer FrameChannel for in-home use, and quickly commercialized with SignChannel. Was the in-home product a ‘test run’ for the commercial product? What was your plan when you started the company?

   Our vision has not changed from the day that we founded the Company. In 2007, we were seeing the emergence of a new technology category (which today, we call ‘connected screens’). The category of ‘connected screens’ was being defined by wireless photo frames, TVs, and other Internet appliances. Unlike personal computers and mobiles phones, these screens are limited in their ability to easily search and configure content. Our plan (then and now) is to enhance the value proposition of these inexpensive Internet-ready screens by facilitating content selection on the Web and intelligent delivery to the screen through our FrameChannel and SignChannel services.

   The one recent change to our business is the company’s name, now Thinking Screen Media. We felt this name better reflects the broadening of our opportunity with all connected screens, not just wireless frames.

   The timing of our SignChannel commercial product was determined by evidence of demand for our services in the business market. Specifically, we began to see that a significant portion of our FrameChannel users were businesses using our service for commercial purposes.

2. FrameChannel, at least initially, charged little or nothing for content. Is that still the case? What about Sign Channel, since I presume both use the same RSS feeds for the news content?

   FrameChannel is a Web-based service for the selection and delivery of content to the consumer’s ‘connected screen’. The FrameChannel service continues to be a free consumer service with an advertising business model. In partnership with 30 content providers, the user has access to over 1,000 channels of content.

   SignChannel is a paid subscription Web-based service for the selection and delivery of content to the business’ ‘connected screen’. The SignChannel Web service allows the business to manage and marry its business content with 1,000 channels of content to create a compelling presentation to promote its products and services. Unlike the FrameChannel service, there are no advertisements associated with the content channels on SignChannel.

3. I know that you have several investment angels as partners. What percentage of the company do you own and is the company growing as you planned, or slower in this economy? What is your revenue model and are you turning a profit yet?

   Thinking Screen Media is venture-backed by investors who believe deeply in this category. They share our belief that this will be a very big market opportunity. Analysts project that by 2013 there will be over 500 million connected screens in the market.

   Employees own over 30% of the company. Although the recent economic downturn presented challenges to the consumer electronics industry and thus connected screens, we are now seeing increased sales volumes with new and innovative connected screens hitting the market.

4. You’ve been involved in a lawsuit with Ceiva Logic that alleges that FrameChannel service infringes on one of Ceiva’s patents. Where does that stand now?

   We maintain our belief that Ceiva Logic’s patent is invalid. On Aug 31, 2009 the US Patent and Trademark Office (PTO) issued a communication documenting its rejection of Ceiva Logic Patent Claims upon re-examination (subject to further review upon plaintiff rebuttal). Although the process may be a long one, we are very confident in the outcome.

5. How many wireless digital frames are now on the market in the U.S.? There were projections that 20 million units would be shipped in 2010. Do you think this is still accurate? How many of these would be for commercial use? Do you think that your products are spurring a significant amount of frame sales

   I believe the analyst’s projections on units shipped, but the vast majority of these frames are not Internet-ready. Almost all analysts predict that connected frames will start to flood the market over the next year.

6. In terms of advertising sales for both FrameChannel and SignChannel, who handles them? Are consumers willing to have advertising in their home?

   We have yet to begin to sell advertising on the FrameChannel service. We expect to begin ad sales in early 2010 through a sales partnership which will be announced shortly. As to the consumer’s willingness to accept advertising: I believe that there is an understanding that, to support a service like FrameChannel, there needs to be a revenue model. That revenue model can either be subscriptions or advertising. We believe the consumer will prefer the ad route for which the Internet provides a proven model for consumer acceptance.

7. You originally had a screensaver and Google Desktop gadget so prospective purchasers of your product could play with the tool before purchasing a frame. Do you still offer this and for which product?

   We will re-introduce our Screensaver product later this year. In addition, a prospective frame buyer can sign up for a free FrameChannel account to learn almost everything about the service without needing to purchase a frame. Further, we plan to make a similar option available for SignChannel whereby a user may set up his account and not have to pay for usage until he activates a frame or media player.

8. Can the advertising on your products be targeted? On both? Can your explain a bit? If so, is there any way of measuring results?

   Yes. We are very excited by our targeting capabilities. Targeting can be based on location, screen type and size, room in the house, content channels, and other demographic information requested at time of registration.

9. Are you operating only in the U.S. at this time, or elsewhere as well? What are your growth and expansion plans?

   Over half of our users are outside of North America. We will expand in partnership with our screen and digital signage partners. We believe that these screens will be ubiquitous and the opportunity for the SignChannel and FrameChannel platforms will be enormous. With SignChannel, our two largest distribution partners are Scala and Signarama. Scala has more than 350 distributors worldwide and Signarama has more than 1,000 franchisees worldwide.

10. You have extensive experience as co-founder of uLocate Communications and Nurse.com, and have held senior positions with GrandBanks Capital, ZDNet and CNET. What have you learned from these that you can apply to your current position?

    Everything takes longer than expected and longer than you would like, but in the end perseverance wins if the initial vision was right.

11. You have made agreements or partnerships for SignChannel with some major companies – among them Scala, Roku (BrightSign) and All Digital Media. With interest from such companies, do you see SignChannel as developing as your main business and/or perhaps developing another generation of your current offering?

    We believe that our business is about delivering content to connected screens and both FrameChannel (for the consumer) and SignChannel (for the business) will be substantial revenue generators for Thinking Screen Media in the coming years.

This month, in the CEO Spotlight, we welcome Rob Gorrie, Founding President, Adcentricity in New York.

1. You worked mainly in the online advertising and Web development business prior to Adcentricity. What drew you to the DOOH sector and what did you learn from your previous positions that you are able to apply to Adcentricity?

   My family owns a point-of-purchase advertising and merchandising company, Gorrie Marketing, that was started in 1882 and which deals in below the line, point-of-purchase for many of the major brands and retailers, including Chrysler, RIM and Benjamin Moore. In 125 years, you learn a thing or two about the below the line business and what really helps folks cross the finish line on the sales front across all industries. I grew up in the retail business and understand the ins and outs of retail and place based marketing very well. That being said, I didn’t join the family company as I’ve always been attracted to Digital, so, out of university, I started a Digital agency dealing with software development, online advertising, digital marketing, mobile marketing and more, for major brands like LG, Sprint and Unilever – ultimately using Digital to effect results for my clients in the best way possible.

   My father and I have been talking about technology in retail environments and the advent of Digital in retail becoming attractive for brands since 1995. In fact, my father started a ‘Pointcast at Retail’ program in 1997 for convenience stores – long before most people even thought about it. After selling my Digital agency after almost nine years, and starting to do some digital touchpoint consulting about four years ago, Digital OOH was a natural transition as I saw many of the same points of pain that affected online advertising in the Digital OOH marketplace. I know the complexities of the retail/place based landscape as well as digital touch-point marketing, and thought I may be able to assist brands and agencies with some of my experience, adoption and use. I know how effective this form of media can be, so wanted to help extol its virtues.

   Finally, I was pretty sure, when I was first analyzing the Digital OOH advertising medium, that it would factor in as a major future initiative in supporting what I saw was a shift in brand attitudes towards more localized ‘shopper marketing’ efforts and ‘digital marketing in the real world’. It just seemed a natural shift point for ad spends and obviously an opportunity for a new type of company.

2. When you have so many venue categories and more than 70 sub-categories (venue types), how do you help advertisers target? Do you work with media planners, or do they give you a ‘list’, so to speak, of what they want and leave it to you to choose for them?

   It’s a lot more scientific than a list hand-off, to be sure! We work hand-in-hand with the advertiser or agency. Sometimes we are working directly with the advertiser and sometimes it is with its agency – the agency being more prevalent.

   On the planning and strategy side, we work very closely with these teams when discussing Digital OOH as a potential campaign support pillar: what the medium can offer; creative ways to use it; integrating with other technologies; adopting and integrating with the over-arching campaign ideation; etc. . We discuss the goals of the campaign, options and the target audience and target behaviors and attitudes. Out of that process comes high-level concepts and opportunities with broad-stroke budget numbers for markets and categories that make sense for whom the planners are looking to touch and influence. We work with planners for ideation and top-line opportunities and budgets, but that’s just step one. If concepts and plans are approved, we then get down to business with the buying teams who are right in the thick of the business and are essential to the ultimate finished plan with the best results for the client.

   Once it comes to the buyers, after plans have been vetted and approved, we are then re-engaged through the use our AdVenue platform to further hone in on the right buy for the advertiser. We work quite closely with the buyers on demographic targeting and venue category appropriateness for the needs of the campaign and the reach required, as they know their clients needs best on the execution front. Our platform has been built to accommodate the six major points of pain that buyers face in the Digital OOH business in both buying and executing: Planning (understanding what you’re buying by audience and potential results); Buying (one total buy versus 90 individual buys); Creative (normalizing and reducing what is really required to streamline efforts); Distribution (one company to engage to send your creative assets and to ensure it’s launched); Reporting (single rolled up source of affidavits); and Billing (one bill for accounts payable).

   The buyers evaluate our initial recommendations to get the ‘perfect Digital OOH buy’ for their plan objectives. Statistically, plans change at least eight times and we can effect those changes in seconds. Can you imagine doing a buy on 30 networks? For an agency buyer just to get quotes and then refine them to their clients’ needs that would be 240 things you have to evaluate for a single buy! All told, we reduce three weeks worth of work to 30 minutes so that buyers can concentrate on the bigger picture and execute more smoothly with more transparency.

3. Your Web site says that the Adcentricity solution is not intended to replace existing network sales initiatives or to represent the network’s brand. So how do you reconcile that with your own sales organization? And does it affect the cost for the client?

   We work with networks as true partners and we ease the ‘pains’ of planning/buying DOOH by delivering a means for media buyers and brands to consider our network partners as a part of a large, powerful and manageable media opportunity. ADCENTRICITY augments the network’s sales teams by providing them with another revenue stream.

   Ultimately, the more advanced buyers on the front lines buy one of three ways, depending on the needs of the client, campaign or scope of the plan: 1.) by specific network partner (where there’s an exact fit); 2.) by channel or category (eg, all grocery stores or all doctors’ offices) 3.) by audience (any network with the correct demographic profile fitting the campaign needs). Obviously, the sweet spot for us is on demographic-based buys which fall into many of the needs of the brands. Because of how we work with ADVenue and our relationships with our Network partners. we can deliver more value to the agency for their purchase.

   While ‘channel conflict’ exists in every single medium out there, we do our best to minimize it or manage it. The agency buyers know very well about most of the networks out there and how they need or want to buy them for a particular campaign, and they will make the call. Sometimes it just doesn’t make sense to buy through ADCENTRICITY as the needs are so specific or there are less than 10 phone calls to make. Other times, the campaign is just so massive and has 50+ networks involved (or even 15), making the sheer volume of work to get the deal done unbelievable. Either way, both a direct sales force and ADCENTRICITY’s sales force help satisfy the differing buying ‘needs’ at the agency and are both absolutely necessary.

   To specifically answer your question around why we don’t ‘rep’ a Network’s ‘brand’, 1) ADCENTRICITY is looking to grow the entire Digital OOH medium and, as such, our position in the ecosystem is to speak to the benefits of the entire medium or most appropriate pieces of the medium in our sales efforts on campaigns. Obviously network names come up later in the process as a matter of transparency, but using this medium intelligently as a planner or buyer is about understanding and evaluating all options, quickly, and not just eight or 10 companies. If you ‘rep’ by company, you take away from the power of the whole medium at the start. 2.) We don’t feel it’s a smart idea for networks to give up control of their brands and have others speaking on their behalf without knowing how they are being presented. Their brands are part of their value, both in an equity sense and in a sales sense – even in a consumer presentation sense. It would be presumptuous of us to walk in thinking that we’re the best at positioning their ‘brand’ to the world. We help present their venues in the context of the campaign but not necessarily their brands. Because we’re sensitive to these facts, we’re careful and strategic in how we present ourselves and others in the market – hence no Network ‘brands’ on our Web site.

4. Your Web site also says that you can try/ access/ etc., venues all across North America? Does that include Mexico? How many screens do you offer in Canada and, if applicable, Mexico? Are you doing anything specifically to grow these markets?

   Currently, although we’ve been approached several times to expand into Mexico, the United States and Canada are where our focus lies at the moment.
   The Canadian market currently has almost 70,000 screens with the recent addition of a few large Canadian Network Partners. We obviously spend a lot of time working with emerging networks to help spur mature growth in Canada, and I know we’ll see some good supply growth through 2010 in that market.

   Canada is definitely a bigger market than some would give it credit for based on supply!

5. There seems to be a trend of consolidation in the DOOH field. How is that affecting your business? How has your growth and profit level been this year compared to 2008?

   Our business remains strong. We continue to grow and have brought on a number of new networks in the US and Canada and continue to work with new advertisers. Some new campaigns we have recently executed were with Samsung, Evian, Verizon and Bank of America.

   On the consolidation front, this has actually worked to our benefit in some cases where new network partners have joined creating a larger opportunity, or a strong network partner enhances its value by diversifying its opportunities for a brand or agency.
   While I won’t disclose exact numbers, I will say that we are up 650% over last year, and large deals are still coming in for Q4. Next year is shaping up in a similar fashion.

6. How long do you think it will take before DOOH will be considered, if not traditional media, at least part of advertisers’ and agencies’ media plan considerations on a regular basis. Can you envision any way to speed up the process?

   As consumer behavior patterns and media consumption habits continue to change and more people continue to spend more time out of their home, DOOH will continue to thrive. DOOH delivers advertisers ROI and delivers highly effective hyper targeting by geography, demography, channel, customized venue mash-ups and a seemingly endless amount of flexibility in how to approach a DOOH campaign strategy. It fits in with how marketers need to find and attract their potential customers, and so will continue to grow on those facets alone.

   In terms of new digital plays, we believe the digital OOH medium could also have a huge impact within the retail environment, known as shopper marketing. Digital displays within retail environments will increase dramatically. By nature this will automatically put brands into a DOOH mind set, in working to find out how brands can optimize this effort beyond the walls of the store and an immediate investment into DOOH content strategies – which will bring the space to be a more prevalent consideration at the creative agency level.

   With regards to Digital OOH becoming ‘traditional’, the Internet has been around for 15 years and IT isn’t considered traditional yet! Certain agencies are adopting Digital OOH much faster than others, doing six- or seven-digit deals for their clients every month. Others are sitting largely on the sidelines, occasionally doing five-digit deals, but for the most part staying removed. Like anything that’s new, Digital OOH has to go through a typical adoption bell curve and it’s still early days. The trick is simply finding out which agencies want Digital OOH to be a part of their stable ‘now’ and spend good time with them. To juxtapose, there are still creative agencies here in New York who have never done an Internet ad campaign. nor do they ever want to – to each their own. JWT Chicago tried to stay true to its TV roots and had to close this year because of it. Some will adopt and some won’t. The best you can do is educate and try and demonstrate the value to them and their clients.

   Speeding up the process is all about education, evangelism and most specifically, client centric results from programs like ADCENTRICITY’s Research Lite.

7. What are some of trends that you are seeing, and what new developments do you think that we are likely to see in the DOOH field in the near- and mid-future?

   I think it is going to be the combination of having multiple platforms working together. Integrating Digital OOH with online initiatives via seamless technology which we provide behind the scenes provides a completely connected set of mediums that involves Internet (including social), Mobile and Digital OOH media that all speak to each other. i.e. what you do on your phone affects a Facebook site which then updates an ad in our network which is targeted to the exact demographic you are looking to reach. These media all compliment each other.

   I believe these types of programs will become very popular in the next few years, especially as smart phones become more mainstream. We want to help our partners get there faster and safer. It’s really a ‘crawl, walk, run’ approach to business that allows agencies and brands to dip their toes in by using turn-key Mobile, Internet or Social programs that are built to support very specific functions that benefit retailers and brands.

8. You are from Canada now heading a major company in New York. Canada seems a little slow in building the DOOH sector. Do you think that it’s the Canadian climate, the spread out population, a lack of investment, or some other factors that are contributing to that?

   Canada actually did have a large head start going back a few years and grew some of the first network types early. There is still a large group of Canadians in this business on all fronts. A number of things stalled it but it had a spurt some years ago and has hit a plateau. Some of this is finance-related. Other components are revenue-related. Based on what I’m seeing, strong growth will likely resume mid-to-late 2010. Interestingly, because DOOH has been around on a nationwide basis longer in Canada then in the US, many major agencies are more aware of it and accepting of it in that country than here. Canada makes up for a full 50% of this year’s revenue increases to date, which has been great for the company and the network partners we work with there. It shows a healthy appetite for the medium at a stage which is further ahead than some agencies in the US.

   Having the Canadian market accepting to the medium has also allowed us to engage clients in the Canadian market and use the results to encourage their US cousins to try the same much faster.

9. I noticed on LinkedIn that you are a ‘concept developer’ on the eternal hunt for the next rush. What was your last ‘rush’ and what might give you the next?

   My last ‘rush’ was a Software-As-Service platform for retail that allowed manufacturers like LG to understand how to leverage their investments in training and incentive programs, monetize them and get better performance out of their sales force like Best Buy employees. It worked quite well and we had some major clients on board and 10s of thousands of users.

   As for my next rush – it would seem I have my hands full with ADCENTRICITY right now so I don’t think I need to distract myself with what I’ll do next quite yet. While ADCENTRICITY is poised to grow quite substantially, there is still an enormous amount of work to do to help grow the industry.

   I do, however, seem to be a sucker for punishment in exploring bleeding edge mediums like Internet, Mobile and DOOH in their early days, so if another medium shoots up, you’ll likely find me there in the future.

10. While Adcentricity offers regular research, you also recently offered Research Lite. How is it working so far? Can you give some examples of how it is being used?

    Research Lite has been received very well by the market place. Metrics are probably the biggest challenge facing the space. Brands want to be able to see the connection between DOOH and a consumer response. We have seen that through research studies, Digital out-of-home media has been proven to be very effective advertising vehicle for both brand advertising and retail efforts. A recent campaign actioned by Samsung (wireless) on an Adcentricity planned campaign resulted in a 49% increase in un-aided brand awareness. We wanted to build on these findings when we announced Research Lite. Normally research initiatives are syndicated programs that involve several brands, or are a major undertaking and investment by a brand across multiple disciplines. Being able to activate a research study on an individual medium, particularly through a single source aggregator, presents a complete solution for agencies and brands to initiative and evaluate campaigns effectively and efficiently.

    We launched Research Lite just over a month ago and we’re already onto our fifth program with many more lined up to go shortly. The insight we now have on this space is invaluable to our agencies and brands, and a lot of the results are helping to guide brands to increase investments in the DOOH space for 2010.

1. What is your background and how did you get into the digital out-of-home advertising and information business?

   I joined International Telecommunication Japan Co., Ltd. (now SOFTBANK TELECOM Corp.) in 1993, holding positions in corporate sales, personnel affairs, in the project management office of new business (Otoku Line), and as executive assistant to the vice-president. In 2006, I was named service planning director of the Digital Signage Division. In the same year, COMEL Co. Ltd. was established and I assumed the post of managing director. In Feb. /08, I was appointed President and CEO of COMEL.

2. Where are your products located and what variety of screens do you offer? Sizes? On kiosks, in store windows, on walls, hung from ceilings?

   Currently, we are operating Digital Signage Media in two areas in Japan. One is in Fukuoka, Japan’s fourth largest city, and one is in Yokohama, the city near Tokyo. We have installed hundreds of displays in several types of locations, such as general merchandise stores, convenience stores, drugstores, shopping malls, train stations, bus stations, and airports. The size of displays ranges between 32” to 52”. Our 42” size is the most popular.

3. I understand that COMEL is collaborating with Yahoo! Japan on electronic signage that photographs passersby, analyzes them using NEC’s facial analysis technology, guesstimates their age and sex, and then gives appropriate advertising content. What is COMEL’s role? Is this working yet, and if not, when and where will we see it?

   We are currently running demonstration experiments in Fukuoka to measure the effectiveness of digital signage advertisements using NEC’s facial analysis technology with Yahoo! Japan’s digital contents and AD distribution technology on our Digital Signage Network. The purpose of this joint experiment is to verify the effectiveness of the advertisements based on demographic targeting and also to verify what kind of information is most effective to catch people’s attention at each location.

4. From what I’ve read, COMEL has also worked with Vanten K.K. to develop Japan’s first wireless digital signage system. I believe it allows advertising and information sent through the Internet to display at railway and bus stations, malls, airports. There were some 1,000 displays in this manner planned for 2009. Can you describe this system a bit and tell us if and how it is working, where, and what kind of content it carries?

   We have installed more than 500 displays using wireless internet technology. Various advertisements and information are delivered to the display using that network. As mentioned earlier, we have installed the displays in several kind of stores, stations and other public places, We are providing content such as flash news of professional baseball, local news, forecasts, restaurant information, best selling DVDs, fortune-telling, etc..

5. Both of these systems sound very advanced and very flexible. What do you think is most important for the growth of your company, and where would you like to expand to next with this?

   Our goal is to provide necessary information, along with advertising, to people needing it in ‘that location’ at ‘that time’. Also, as stated in our corporate slogan: ‘Creating Media for Life’s Enjoyment’, we want to develop community-based media that make people’s communication style more rich and fun – as well as media that can be used by people to communicate and share knowledge with each other. We want to deliver the content.

6. I’ve read a bit about Fukuoka City Media. In one place it seems that it has something to do with working with the police for disseminating information (maybe like North America’s Amber Alert?) and in another it seems to be involved with food distribution. Can you explain what this is and how COMEL is involved with it – if it is?

   In Fukuoka City Media, we deliver real-time information on nearby displays about crimes that happened. We receive such information from the police via the Internet. It is based on an existing information delivering service that the police currently operate via e-mail to PC and mobile.

   We also provide content that gives information regarding popular restaurants near the displays. To provide this information, we collaborate with ‘tabelog.com’ , a word-of-mouth restaurant and gourmet food review site powered by Kakaku.com.

7. I believe that COMEL’s holding company is a telecom company. Did it buy COMEL, or did it develop COMEL in-house? How much involvement and/or influence does it now have on COMEL’s plans and operations?

   Our Holding company SOFTBANK Corp. operates several business segments such as Mobile Communication, Broadband Infrastructure, Fixed-line Telecommunication, Internet Culture (Yahoo!), e-Commerce, Media and Marketing, etc.. COMEL was established via intrapreneurship in the SOFTBANK group and now operates under the Media and Marketing segment. To develop and operate the digital signage media, we are working in closer cooperation with the SOFTBANK group company.

8. Do you provide creative for your clients? How about measurement of campaigns? What system for measurement do you use?

   We provide creative for clients – mainly using Flash. We usually use online questionnaires to measure the results of campaigns. We have also started to test the facial analysis technology, counting the people who watch the display.

9. I believe that you worked with a trial of promotions and advertising activities in Yokohama. Can you tell us about it and how promotions and sponsorship fit into COMEL’s activities.

   Yokohama City Media is also a community-based media which provides local information such as sports news, news of events, sale information in malls, and movie theater news.

10. With Japan considered such a technologically advanced country, what do you do to make COMEL stand out from the clutter?

    As we are subsidiary of the Internet company SOFTBANK, we will be focusing on how to bring the Internet technology and business model to the real world (offline). In the current Japanese Digital Signage market, the main players are display manufacturers such as Sharp, Sony, Panasonic. Their prime objective is to simply sell the displays, PCs, and software. Instead of that, COMEL does not sell the displays but will install displays to create media that delivers information and advertisements to people in the city.

11. What are your growth plans inside and outside Japan? Japan is a small country with a large population. How does that affect digital growth potential?

    Currently we are focusing on the Japanese market only. Our immediate mission is to expand the digital signage advertising market in Japan. We will develop the media ourselves and also connect other companies’ digital signage to expand our networks. However, as our holding company SOFTBANK is aiming to be the No.1 Internet Company in Asia, we also wish to expand our network to Asian countries in the near future.

12. Are there any imminent laws pending in Japan or in specific cities that might affect your business?

    No, we do not think that there are any such laws pending.

13. How has the world economic situation affected the digital out-of-home field in Japan? Is it a market in which you would encourage foreigners to invest, or come enter?

    The Japanese DOOH market has just starting to expand, so we think that the impact of world economic situation is not so big. In addition, (not digital) OOH media are also doing well, compared to other traditional media such as TV, newspapers and magazines.

14. The Digital Signage Consortium of Japan apparently has about 141 members. How active is it? What would you like to see it do?

    Large study sessions of 50-to-100 people are held every month. Several small sessions (5-20 people) are held every two or three months. There are sessions on topics such as ‘Systems’, ‘Location’, or “Measurement of Effectiveness”. We would like them to improve common indicators for effectiveness of campaigns so that clients could determine them easily.

1. You spent about 25 years in the packaged goods field with Procter & Gamble and mainly in senior roles and as president of various H.J. Heinz companies. Was there anything about these companies as an advertiser and marketer that spurred you to develop something to make the media buyer’s job easier?

   I have to admit that media planning and buying was a much easier task when I started out at P&G over 25 years ago. It was all about tonnage, and for national brands, there were really only two viable options – TV and print – and even less of that from which to choose than there is today. Clearly today’s media landscape is much more complex and can’t be effectively navigated without the use of new tools and technology.

   For new media to be considered by very time-pressured media planners and buyers, it has to be easy to plan, buy and measure; otherwise it won’t get into the plan. So, one of SeeSaw’s founding principles was that we had to make it easy to plan, buy and measure place-based digital networks.

   But that’s only part of the story. I’ve always thought of media as being part ‘science’ and part ‘art.’ Technology has clearly improved and made the ‘science’ part easier. Based on my years of experience, it’s the ‘art’ part that makes a media plan truly effective, as well as cost efficient.

   What excites me most is working with advertisers and media planners to understand their business and communication objectives and their consumer insights. What we do at SeeSaw is bring the ‘art’ and ‘science’ together to make it easy to develop and analyze place-based digital advertising opportunities. I find that very exciting.

2. Was SeeSaw a startup company for which you were consulting, did you start it from scratch, or join it after its launch? It’s quite a different field from the packaged goods world. What intrigued you about it?

   I am one of the co-founders of SeeSaw along with several others who individually brought different skill sets to the company and collectively provided a tremendously strong management team to get the company started. In fact, it’s my experience as a packaged goods marketer that helped shape the company and provide the customer focus and marketing/sales orientation. We’re all strong believers in generating new ideas to help solve business problems.

   New media has always been intriguing to me. When I was at Heinz, we were one of the first companies to enter into the cable market and worked with Leo Burnett to cobble together a cost effective cable alternative to broadcast TV. This allowed us to stretch our media dollar while still reaching our target audience. Place-based digital media has similar characteristics – highly fragmented, regional dispersion, lack of scale – but, when aggregated together provides a very powerful, yet cost effective media.

3. I looked closely at the demo on your Web site for buying a campaign. You seem to have covered all the tools necessary right down to the reports. Did you develop this in-house? How long did it take to develop? And have you added to it since it was launched or did you have it complete from the beginning?

   Thank you for your comment. We have an incredible and very experienced product development staff who are totally responsible for the development of SeeSawAds.com. We spent the first year of the company’s life talking to literally hundreds of media buyers, media planners and media executives in addition to dozens of place-based digital networks and their technology providers. These conversations were critical in our design process and drove our product strategy and direction in a way that was fundamentally customer-centric.

   Leveraging insights from our target customers along with our design process allowed us to establish early market leadership. We have continued to build upon this with the addition of several innovations to our service offering on SeeSawAds.com. And it doesn’t stop there; we are continually improving the service based on feedback from national advertisers, media planning agencies and our network partners.

4. How does what you offer differ from say Adcentricity or BookingDOOH?

   From the outset of the company, we have focused on the needs of national advertisers and their agency partners. This focus drove the design of our unparalleled media planning and optimization technology, the creation of a common currency for our place-based digital media networks and also was the catalyst for the principles behind our Life Pattern Marketing methodology and market research efforts. National advertisers are interested in reaching their audience with impact. The scale of our network, our planning and optimization technology and our internal and external methodologies are all key to our leadership.

   Our core expertise in servicing the needs of national advertisers and their media agencies also drives our close working relationships with our network partners. We have created a unique qualification process by which we evaluate each of the networks from a national advertising perspective. This provides the basis of each contract we sign with our networks. We have removed networks that have not passed these tests. Our networks are more effective as a result and our agency partners benefit from the operational excellence that we have created.

5. Have you ever thought of expanding your offering to other types of media? Or is there enough growth in the DOOH sector to keep you busy?

   With the continued growth of place-based digital networks and the increasing interest from advertisers in our media, we see tremendous growth opportunities near term. Moreover, we have just scratched the surface of how advertisers can take full advantage of this media when it is fully integrated into the media mix and is a part of a business’ strategic communication plan.

6. What are your revenues and how have they been affected over the past 12 months? Based on your business, can you see the economy getting worse, staying flat or improving over the next 12 months? And for DOOH?

   We are a private company and do not provide financial info. However, I can say that our business continues to grow year over year as more advertisers are discovering place-based digital video advertising and the business benefits it provides – namely an efficient and effective way to connect with mobile audiences with media that captures their attention.

   From a macro perspective, the economy has definitely had a negative impact on advertisers and spending, which, by all reports, will last for a while. On the flip side, the micro perspective is positive for place-based digital video advertising as advertisers are looking for more cost-effective ways to reach their consumers. With our current scale and continued growth, SeeSaw is a viable alternative or complement to traditional media. So in some regards, the economy is providing a catalyst for advertisers to experiment and is creating a shift in the way many advertisers are thinking about media. Call it a forcing function if you like; we view it as positive in the mid- to longer-term timeframe.

7. Where do you see growth for SeeSaw? And expansion? When and where?

   Our focus is on aggressively growing our U.S. business. We are just experiencing the ‘tip of the iceberg’ relative to what we expect to see in terms of opportunity and growth. In the U.S. we have yet to tap the full potential of this media. Moreover, our industry has not reached its ‘inflection point’ and when it does, we plan to be in a very advantageous position to capitalize on the tremendous growth the industry will experience.

   Having said that, our business model is very portable and global. I get approached almost weekly to consider international opportunities and there will be a time when we believe market conditions in other countries are right for SeeSaw to enter.

8. Can you envision ever owning your own screens?

   Our business model requires us to be ‘Switzerland’ to all networks and our clients expect us to be ‘network neutral,’ so owning a network or networks might be perceived negatively by some clients. Interestingly, since we work very closely with so many partners, we are in an ideal position to help our affiliate networks by providing operational best practices, counsel on the marketplace, etc. In many respects, it is in everyone’s best interest for us to remain ‘Switzerland.’

   In this role, we have been able to drive operational excellence in executing national campaigns across multiple, disparate networks. There is tremendous work involved with placing a digital video ad across dozens of networks, from trafficking the creative to providing cohesive and comprehensive reports. This is a tremendous value-add to our agency partners and allows them to focus on the core aspects of their clients’ needs.

9. You have partnered with LocaModa mobile social platform for connecting people and places to the Web. How is that working out? Have you other partnerships and/or are you interested in others?

   We value our partnership with LocaModa – a terrific company with a great business model and product offering. We have worked on a number of campaigns together and believe the triad of place-based digital media, the Web and mobility will play an integral part in virtually all media plans. This is one of the reasons why we launched the first integrated place-based digital video and SMS campaign planning solution on SeeSawAds.com back in 2007. We continue to see experimentation by many advertisers as they look to take full advantage of what these media offer when used in combination.

10. You published a Global Digital Forecast for 2008-2112 on your Web site. Who did the research or how was it developed?

    We are often told that our Web site is the first place that people come to learn more about place-based digital advertising. In the case of the study that you referenced, this research was conducted by PQ Media. In order for this media to flourish, research and consumer insights are critical to drive the industry forward. This is why we freely offered the OTX Digital Out-of-Home Awareness and Attitude study to the broader community as an open resource and why we feature research from industry leaders like PQ Media, Arbitron, our affiliate networks and many others.

    It has been a pleasure working with so many of the brightest people in the industry to educate and build awareness for this media as a strategic part of an advertiser’s media mix.

1. You came from a career in the world of investments. What intrigued you to enter the DOOH sector and what has compelled you to stay?

Yes, I joined Danoo from Kleiner Perkins, a venture capital firm that is an investor in Danoo. (I’m still a partner there.) Kleiner specializes in helping companies grow from an early stage, and looks for opportunities to help create whole new industries. It was a backer of companies like Google, Amazon.com, Netscape, and Genentech. When looking at the DOOH space, we saw the characteristics of the kind of green field KP looks for. There was no question in our minds that this industry would grow to become a permanent and valuable part of the media landscape.

When we met the team at Danoo, the right combination was there. It had a great team, a low cost, scalable technology platform, a vision for a great customer experience, and it had started building a network which consumers, advertisers and venue owners loved. But, there was no CEO on board. So I was named chairman and I found myself spending a lot of time with the company, seeing so much opportunity in the category and for Danoo. It became a natural transition. After a decade at KP as an advisor to startups, I found myself wanting to jump back into an operating role to help Danoo and our category. I’m fortunate there was such a great fit, as there is nothing more exciting than helping build a company with a great product, and helping to build an industry.

2. Your screens have been in coffee shops, yogurt chains and high-end delis. Now you are working with Trofie to put your screens in airports. Which business sector will be Danoo’s #1 priority in the future? Has this changed your business focus?

Our mission has always been to deliver the most relevant information and entertaining content to consumers in their places, when they have time to pay attention. We try to understand consumers’ lifestyles, where they spend their time – and bring the right information to them, tailored to where they are and what’s relevant to them. So expanding to reach people in airports is a natural extension. We’re growing – from reaching millions of consumers in cities to also being in the top airports, where people also have time to wait and are interested in staying connected.

3. Tell us about your airport screens: will they be different from what we see in other airports? Will they be external as well as internal? How many screens? And will they offer interactivity for consumers and/or staffs?

The Danoo Traveler experience will be tailored to what’s most relevant to travelers and frequent flyers as they wait for their flights. On average, consumers have 45 minutes to wait in the terminal post-security. So the content will be a mix of important national news to make sure people are in the loop, weather forecasts, entertaining content like short form videos and trivia, and advertising targeted to the frequent flyer audience.

We average two or three screens in each newsstand or gift store, located in key merchandising areas and near the point-of-sale. So this is an outstanding way to reach frequent flyers and travelers with dynamic video media while they have time to pay attention. Being near point-of- sale also gives us the opportunity to influence what travelers purchase and sample. We’re excited to offer what we call an ‘immersive marketing solution’ to advertising partners in these venues – a combination of screens, interactivity with the phone via SMS, product sampling and employee participation. We’ve done some case studies on this with our partner in airports, Trofie, and the impact on sales has been really outstanding.

4. Your screens in delis and coffee shops allow customers to submit their own events, art, photography and Web videos. How is this controlled, and are the submissions seen nationally?

A good amount of the content featured on Danoo screens is recommended and submitted by the Danoo viewer community. We have a growing number of regulars who watch Danoo frequently and who submit content they find locally or generally interesting. We also get submissions from local bands, museums, photographers and a variety of content owners. Submissions are made via the ‘participate’ tab on our website or by sending an email to participate@danoo.com. We have editorial staff that reviews submissions in each market, which helps us maintain a local feel in our programming, as well as a team in our San Francisco headquarters who help select what is most interesting for the screen nationally. We really appreciate all the submissions!

5. What are your current revenues and how are they being affected by the current economic situation?

There aren’t many businesses that aren’t being affected by the current economy. But the tough economy has caused us to be even more disciplined about making sure we understand the needs of our consumers, venue partners, and advertising partners, and about making sure we deliver great, measurable value to each. We are an extremely efficient media for difficult times because people really pay attention to our content; we are extremely geo-targetable (each screen has an individual IP address); we offer great reach in the top cities; and we engage and influence a very desirable audience. But on top of that, we also work closely with clients to craft solutions to address specific marketing objectives, and provide proof of performance metrics to measure the success of each campaign. Those elements make it compelling for marketers to work with us despite the difficult economy.

We are working actively with a broad number of clients, some who have specific audience and geo-targeting goals; some who have goals of influencing transactions and driving retail traffic; and others who want to build their brand and build a 1:1, more grass-roots relationship with consumers through screen media and interaction with the mobile phone. (This is a new solution we are in the process of rolling out.)

We’re a private company, so we don’t disclose revenues. We’re fortunate to be well-backed financially and to have great cost advantages due to our technology platform and having both U.S.- and China-based teams. So we have the resources to build the right foundation with consumers and advertising customers for the long term.

6. Following in that same vein, from your perspective, how do you see the current economic situation affecting the digital out-of-home sector in the near future, in the U.S. and globally?

The economy is having an impact on the sector. As we already discussed, the tougher economy is causing all companies to look harder at the value they offer consumers, venue owners and advertisers. During a time when ‘flat is the new up’, what we offer has to give advertisers a reason to buy when they are working with flat or decreasing resources.

This economy will also likely cause industry consolidation. Several years ago, a lot of forward thinking people saw the potential of this new media. Bringing tailored, relevant content to consumers – the right message, at the right place and time – should be, by definition, more efficient and effective for advertisers. So networks were started in a variety of places and geographies, targeting a variety of audiences. But the financing market has become much tighter, and working with a large number of small networks with different ad standards and measurements is not very efficient for advertisers.

If some of these networks start to consolidate, we’ll be able to deliver better impact and pool resources – specifically, larger, more consistent audiences; broader geographic scale; consistent ad formats; better measurability; more efficiency for advertisers; and likely, better results. We have already started to see some activity of this nature, I expect that will continue.

7. How does Danoo monetize the screen real estate? Do brands get 100% of the screen? What portion of the screen is allocated to the local store, the local news, and live data feed?

A good portion of our content is fed via RSS feeds, so what you see on the screen will be fresh and it will keep you up to date on what’s going on in the world. We also tailor our content mix by market, to maximize the appeal in each city, since we’ve found regional tastes differ. Our technology platform is built to be able to tailor the content mix, programming wheel, and the look and feel, down to the screen level – which gives us a tremendous amount of flexibility.

For advertisers, we offer full screen media. We also offer additional solutions for advertisers in terms of sponsored custom content, dynamically localized creative, mobile downloads in our venues, in store sampling, and more.

We do offer a portion of the screen time to each venue partner. They can use this space to welcome customers, share their history, or promote key items on the screen. This works incredibly well in terms of building measurable customer loyalty and influencing transactions. We have an online portal for our retail partners to create and manage digital marketing campaigns, and our creative services team also helps with templates and suggestions.

8. Do you have any data and/or specific research on how effective your model is? Explain, please.

We have conducted a lot of research studies, both internally and by third-party vendors, to demonstrate the impact of our media. Studies have shown very high audience engagement, with 84% of people who notice the screen saying they spent some or all their time watching the content. Our ad recall numbers are also very strong: we’ve seen from 25% to 70% ad recall depending on the campaign, (averaging 42%), and we’ve seen purchase intent scores increase two-to-three times after a given campaign.

At a more product specific level, we’ve done a number of point-of-sale studies, both in our City and Traveler networks, to demonstrate how our media can increase sales of featured items by 20%-100+%.

And as I mentioned, we just completed work with a number of advertisers on a beta program to deliver mobile content downloads in our venues. We’re working with advertisers to use the screen to drive awareness and to invite consumers to download relevant content to their mobile phone. The results we’ve been seeing are pretty significant. The Danoo audience is proving to be very receptive to unique content on their phones, which provides advertisers with a new way to engage with a very mobile audience. We might just have the ideal environment for inviting mobile downloads and for helping consumers discover mobile content.

9. Do you have any aims to move into other sectors, e.g. fashion stores in malls or transit? Why or why not?

We do plan to grow into other sectors, and also plan to partner with leading companies in other sectors.

10. What are your plans to expand your screens in coffee shops, etc., into other cities and in what time frame? Any thoughts of going international?

In addition to the rapid airport expansion we’re currently working on (we’re part way into a 40+ airport deployment plan), we are currently in the process of rolling out our next city, which we haven’t announced yet. And we have additional expansion plans which I can’t talk about yet, but stay tuned. We are definitely growing and are always looking for additional opportunities.

11. In general, what are you opinions on UGC – user generated content?

We like user-generated, and user-contributed content. It is a great way to identify content that has organic appeal and is less mainstream. It allows us to learn what our viewers like, and helps us stay ‘tapped in’ to what’s going on in our communities. The content is always reviewed which gives us an added filter – but it is a great way to leverage our community, build loyalty and stay relevant.

1. First of all, congratulations on receiving the Red Herring Award, considered the world’s leading award for New Technology Companies. It must be quite an honor for someone who has been described as a ‘brash New Yorker’ and who ‘talks like a street punk’, if you’ll pardon me for quoting others. How do you handle such comments? Has having such a personal image been a help or a hindrance in your success in doing business in China?

   I can only agree with those comments. I am a scrapper. I had my first job when I was seven, (True!) washing dishes in a Chinese restaurant in New York. I was buying and selling used car parts when I was 13 and had my first business before I was 20.

   My family has been blessed. We are more than comfortable today, but we have definitely done it the hard way, fighting our way up from arriving in New York in 1966 completely penniless.

   I don’t think my background, has been a hindrance to doing business in China. In many ways, it reminds me of New York 25 years ago when it was your integrity and determination that got you going, not the sophisticated financial games that have created the economic mess in the States today.

   And with any start up, it’s determination that gets you there. We thought it would take a few months to get an effective, stable system off the shelf when we started Touchmedia. As it was, we ended up having to do it ourselves, because we couldn’t buy anything robust enough for life in a taxi, and it took us four years and $4.8 million just to get that first step. Without perseverance, you never make it as an entrepreneur.

2. You have screens in Beijing, Shanghai, Guangzhou and Shenzhen where people take 10 million taxi rides per day. Do you monitor taxis for broken screens, cleanliness and so forth, or how is that handled? I would think with so many people touching the screens that this might be a real problem.

   Absolutely!

   In Shanghai, for example, we do it in two ways. Firstly, the units can monitor themselves and every time they come into the taxi station, they download automatically by wifi what they have been doing and the system sends out an alert if they have fallen outside fairly narrow parameters. Secondly, we man all the relevant taxi stations in Shanghai all day every day so that we can do a physical check. A system might be functioning normally but the screen is dirty, for example, and that can only be fixed with a physical check. On average, more than half the screens are checked one way or another every three days.

   In other cities like Guangzhou, we have units that communicate by CDMA, so those units we can ‘call up’ anytime and check them. It’s not perfect. We catch about 80 malfunctioning screens a week. 75 % of those can be fixed at the station in 10 minutes or less. If it looks like taking longer, we just whip the faulty machine out and slot in a new one and then take the faulty machine to our maintenance centre.

3. I understand that all viewers’ responses on a screen are (or can be) measured and recorded, and that the users’ phone numbers or e-mail addresses can be collected, downloaded, and provided to an advertiser. Is this permission based? Do users have to supply these to use the screens? If not, how are they collected? And can the advertisers use the information to follow up with direct mail, samples or other marketing offers?

   Always permission based! You can use the screen as much as you like and never put in an e-mail address or phone number. The only time we collect personal details is if the viewer wants more information, wants to enter a promotion or wants to take advantage of a client offer and buy something.

   We then pass that data to the relevant advertiser and that advertiser only. The advertiser has to agree in advance to send at least an acknowledgement to all participants. If it is a promotion or competition, we also ensure that the prizes do exist and are distributed properly.

   Advertisers follow up with an e-mail or SMS message with, for example, a link to a Web site where participants can get more information, an answer as to whether they have won and how to collect a prize, and so on.

   As with any CRM program, if the advertiser gets a further response, t can develop the relationship.

   Our rate for valid responses is several times the norm in this market, so the program has been very successful. All together over half a million people participated in just the last few months.

4. Having been so successful in the U.S. with fashion and real estate businesses, what possessed you to move your family to China? What does the country of so many people offer a foreign independent business person?

   It was a big decision, really big, and very hard on my family. I am so lucky for their support. It is that anchor that keeps me sane. I had been doing business in China since 1982. I think it is a remarkable country. Moving at warp speed. In a single generation, it has moved 300 million people, equal to the population of the whole United States, out of poverty and it will do the same again in the next few years. I wanted to be part of that.

   China also has more taxis than anywhere in the world and that was the first area we wanted to develop for our business. And it has the fastest growing and probably most innovative outdoor advertising market in the world. It was the obvious place to be.

5. I’ve heard that many North American companies have had difficulty operating in China. Do foreign companies have difficulty because of the government regulations or adapting to the culture or what? How have you avoided the problem?

   I am Chinese. My family is Chinese. I have been doing business here since 1982, so no, I didn’t find it to too hard. We are also a pretty local company. Of 400 staff, maybe four or five are not Chinese nationals.

   And many government agencies have been very supportive. We were delighted to be part of the activity for the Olympics with the Beijing Olympic Committee and for the Shanghai World Expo next year, which we have already been promoting on our screens for nearly 12 months.

   We are also very keen to help government initiatives by making taxis more user-friendly for visitors to the city with maps and information.

   Lastly, when I started Touchmedia, part of what excited me was the ability to mobilize people to help other people, so we have done a lot of community service work and charity work with the government and various local charities. When you put all of that together, up to 30% or 40 % of the content on the screens is an informational service or community service, rather than paid advertising. I think the government recognizes that value and recognizes that around 96% of taxi passengers like the screens, so it has been quite straightforward to work together.

6. Your company has integrated into the community very well. In fact, you received the Media Award for Community Service from the Beijing Government in 2008. Promotion of community events and charities is high on the list of topics on your screens. Why and what role does that play in Touchmedia’s success? Can you give some examples?

   The informational service and the interest of the other sections, combined with the choice and control we give the passenger, has been crucial to making it work. Essentially, we sell eyeballs and the brains attached to them. If people are not using the screen, it has little value to advertisers, and we would not be getting the extraordinary recall and response rates which we achieve.

   But we really want to help others. The team gets very excited about the new charity programs each month. It is one time that everybody is happy to work late and do overtime to make them as good as possible. Winning the award was a great honor, but we would do the same anyway. It is part of our DNA.

   Yes, we are very proud of our successes. Working closely with my friend, the famous Chinese actor Ray Liu Liang Wei, who is Touchmedia’s partner and Honorary Chairman, we have taken the lead on informing the public about how to support events as diverse as the ‘Sichuan Earthquake Relief’, the ‘2008 Beijing Olympic Games’, the ‘2010 World Expo’, ‘1Kg More’ and many other charities.

   Very recently, Ray and I went to visit some impoverished children in Guangxi. We helped to provide funding for their schools so that they might have access to a better future through education.

   Running information about community services and charities on Touchmedia screens not only generates substantial donations, but also prompts responses from literally thousands of volunteers. For example, the team of more than 40 people who took part in the ‘1Kg-More’ Charity Trip to Anhui, in September, 2008, were selected from over 1,000 passengers who interacted with the ‘1Kg-More’ icon and volunteered their services. One volunteer commented to me, “I found out what I needed to know about the program from the screen; I was also able to confirm my involvement right away by touching the screen to input my details.”

7. Let’s talk about your expansion plans. You are now in four cities with your taxi screens. Where do you go from there? Is expansion to second tier cities worth the investment, or will you expand with the screens outside China? Or both? In what time frame?

   The company has three objectives for growth going forward. First, to enlarge its screen deployment significantly, increasing reach in its existing markets: Shanghai, Beijing, Guangzhou and Shenzhen.

   Second, we will expand over the next 18 months into some major second tier cities. Is it worth it? Chengdu alone has 10 million people and an ad spend of half a billion dollars. And for many of our clients they want us to be in more cities right now – 15 or 20. For them and us, it would not be much more work to load in 20 cities as in four. The economies of scale help us, too.

   Third we are also exploring new services on our system for the public and new uses of the system.

   The big factor in this expansion plan is people. I was so lucky originally to find the right partners and key staff. Some friends were also a huge help and encouragement. That made all the difference in the world. And we have a terrific team. Many CEOs say that, but at Touchmedia, it is really true. Our staff turnover is a fraction of that for the industry; their caliber, commitment, and creativeness is amazing.

8. I’ve read that there is low consumption of conventional media in China, yet pictures of streets there seem to show a different story, and your own company is now also into posters, magazines and newspapers. Why go into these sectors, if that’s the case – and with the distribution of posters and magazines in taxis, aren’t you just reaching the same affluent audience?

   If by conventional media you mean TV, newspapers, magazines and radio, then yes, consumption, particularly by affluents is often far below levels in the West. It is mostly a cultural difference. People in China, particularly the more affluent white collar professional classes, live their lives out of home. They see friends out of home and even family, and so on. So you have to reach them out of home. Hence, the proliferation of outdoor media. Our cities are also much denser. The suburb of Shanghai in which I live has a population bigger than all but a very few U.S. cities. Just the one suburb.

   But with 1.3 billion people there is still a huge opportunity for conventional media. Whereas going into the newspaper and magazine side of the business was something that came along as part of other plans and will never be our number one priority, it is still a very profitable niche for us. Yes, it is the same target, and that is quite deliberate. It is a group of consumers that we understand, and of clients that we know and have a relationship with already. So we can then offer our clients a more complete program.

9. Your audience is the upper 10% of consumers in the cities where you operate, yet with a population of so many millions, there must be opportunities to reach many more. Have you any plans to erect digital billboards, for example, or do you only want screens that offer interactivity?

   The most attractive audience to more advertisers is that top group of affluents. And our focus is interactivity. We get awareness, recall and response figures 4-to-40 times the norm for our clients. There are many reasons, but the key is interactivity. Have you ever tried to learn a language? If the teacher just talks at you, you learn very little. If they make you try to have a conversation, give you quizzes and games and ask you questions, you learn many times more. The screens are the same, we just make it fun to learn about products and services.

10. The average taxi trip is 18 minutes, 89% of the taxi passengers use the screens, and with 15,000 screens reaching a total of approximately 20 million passengers per month, how many of them are women? How do they use the screens, as opposed to how men use them?
    

    The split of men and women is 50.5% to 49.5% in Shanghai and a fraction higher in Beijing, for example. The numbers of each gender using the system are about the same, but what they look at is obviously different. The women are more interested in clothes, cosmetics and shoes. The men in electronics and cars. Both like travel, shopping and dining.

    Interestingly, one difference is in response with contact details. Men find giving a phone number quicker and easier. Women much prefer to give an e-mail address. They don’t like to give a phone number. I think men the world over have found that it can be hard to get a woman’s phone number!

11. I understand that you spent seven years and US$30 million developing Touchmedia’s proprietary software and hardware, and that you now hold 20 patents. You are now investigating putting screens into shopping centers and exhibitions. Is there much competition in these sectors, and would you have to make other huge R&D investments, or would it just mean an adaptation of what you already offer? Is there lots of potential in that sector?

    R&D is an ongoing investment we are very happy to make. Just with the current new system, there are more than a dozen new services we are developing for both consumers and for clients. Yes, we are looking at other opportunities for our system, but we are just testing the water and won’t commit till we are sure of our direction and of the potential opportunity. In terms of competition, we are not too worried. Interactivity is the key and we feel we are far ahead of most other players in this respect.

12. What rules, regulations or restrictions inhibit digital out-of-home companies such as yours – and could inhibit other companies from developing and expanding digital signage in China?

    We are very careful to follow all government regulations. They vary a little from city to city, so it would probably take a long time to look at.

    In terms of competition we know we have several advantages.

    The first is the technology. More than 20 companies in China and countless others around the world have looked at this area and, to the best of our knowledge, no one can match out technology and business model.

    Second, in China we have a very strong position in Beijing and Shanghai which have 38% of the advertising market. It would be very hard for a competitor to get sufficient scale without those markets.

    And thirdly, it is a much more complex business than it may look. We have taken seven years and $30 million to get to this point. A new player, even if they were much smarter than we were, has to take some time to work out the same problems, by which point we will be even stronger. In any business there is a significant first mover advantage.

This month in the ‘CEO Spotlight’, we welcome Alberto Montezuma, Chief Executive Officer of Ya Mogu, Rio de Janeiro, Brazil.