OUTFRONT CEO Jeremy Male appeared at the UBS Global TMT conference on Tuesday.  Here’s a summary of his comments.

What’s driving growth?

The principal driver of the acceleration in the US is national advertising…When you look at that there’s a couple of reasons…Firstly…our audience continues to grow whereas most other traditional media, there’s some decline…We then have an increasingly effective way of interacting with that audience…so we can be more exciting, more creative, give advertisers better opportunities…There’s been a shift back to the top of the funnel.  There’s a shift back to building brands…We’ve seen that with some of the bigger tech brands and DTC’s.

Fast growing categories?

For the first 9 months of this year our local business and national business are both up around 11%…About 70 of our top 100 advertisers increased their spend with us…and we have very good retention of customers…Tech is an outlier.  It’s continued to grow for us…and its continued to be a declining share of spend over time.

On digital billboard converstions?

Just less than 3% of our billboard business has been digitized.  That’s driving…20% of our revenues…That 3% is not too dissimilar to our competitors…The returns on the board we are doing now aren’t going to match the returns on those first boards.  But we’re still getting 4X revenue on the boards that we’re converting and we’re still making 25% IRRs…There is a gating factor and that’s zoning…In terms of percent of boards if it’s 3% now is it going to end up at 5% or 6%…it could easily…but those 5-6% of boards will likely be driving…close to 40% of revenues….When you drill into the math, if we’re generating 4X revenue…we only have 2X cost increase.  So typically we have more rent, we have connectivity costs…every sign we convert is margin expanding.

The New York MTA 50,000 screen rollout.

As of now we have around 3,000 boards deployed.  It’s a 7 year deployment.  We’re at the bottom of the second…in terms of rollout.  We start rolling out digital in car…in the second quarter of next year…The product looks great.  Advertisers like it.  We’re achieving revenue per screen which is a little ahead of where we first started modeling.

On joining an open and automated sales platform as opposed to taking a walled garden approach.

We want to have our own end to end platform but we already do have…some inventory on some other platforms and would certainly envision that we would continue to do that.

On Competitors

Clear Channel have a more similar model to ourselves than Lamar in that they tend to be in the large DMA’s.  Lamar operates in the small DMA’s…When we think about our competition, is it really Lamar and Clear Channel?  I don’t think of it like that.  Our competition really has been…the other 95% that is the media market in the US.

Why own a transit advertising business?

Having transit gets you into downtown.  It gets you into urban audiences that are really hard to get through traditional media…As I look forward I think that our transit growth may be ahead of our billboard growth over the next 3-4 years as we do this digital buildout.

Insider’s take:  4X revenue and 25% IRR’s.  What’s not to like about digital billboard conversions?  Insider’s impression was that OUTFRONT was the most resistant of the big three to using an open automated sales platform rather than an in-house platform.  Male’s comments give a little bit of wiggle room.

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