Jeremy Male: Big cities are taking an increasing share of the media pie and that’s where we’re big

Here’s a summary of OUTFRONT CEO Jeremy Male’s comments yesterday Goldman Sachs Communacopia Conference.

Outfront’s revenue growth is coming from big markets

Big cities are taking increasing share of the media pie and that’s where we’re big…Our top 15 markets grew at a higher rate in Q2 than our overall growth rate of 14%…Markets 15-40 grew in the mid single digit range.

On the economic outlook and advertising

We’re certainly seeing a robust revenue trend…Anecdotally we hear nothing from our discussions with agencies and clients…that gives us cause for concern.

On sales force changes

We’ve been investing in our sales force.  Not only boots on the street but we have a new national sales force that is specifically aimed towards clients and agencies rather than the media buying community…We changed our incentives for our sales guys a couple years back and the incentive is all based on growth…It has nuances regarding how much new business you bring in…it seems to be working well.

On the MTA Contract

The timeline is 6-7 years…We’re not building on the train until next year…We’ll have captivating ads…we may have an app which will be able to let you play sound with the signs…we think that will capture some exciting new dollars for out of home and for OUTFRONT.. Think of the size of the daily audience we’ve got.  It’ll compete happily with the NBC morning show.

On Outfront’s Automated Buying Platform

We have a product called Smart Scout which is a planning tool…fueled principally by mobile data…It’s a really really effective planning tool that we are using with our national advertisers…You can go and see the boards, see the audiences…detailed analytics, the availability of that board…what we need to bolt on…is an add to basket feature…We’re still a year or two off that.  The industry is changing.  Automation is becoming the norm…we will have our assets on certain buying platforms as well.  We just want to have our own soup to nuts platform for OUTFRONT assets…

On competitors

If I think of the competitive landscape I’m far more concerned about all media than I am about our traditional competitors within out of home…The growth of our medium is going to come out of TV and radio and magazines.  So that’s where we put most of our focus…

On converting more static billboards to digital

If you think just about our billboard business about 3% of our signs are digital…This year we hope to convert 130 boards and we’re going to target more than that next year…

On why OUTFRONT’s billboard margins are down

We ticked down a little bit in the first half on our billboard margins.  For us it’s all about mix….Our big markets are the fastest growing and in our big markets we have lower margins…In Times Square I’m likely to be paying 80% of revenues to my landlord.  If I go to Louisville…I’m likely to be paying a flat fee of 20 cents on the dollar.  So where I’m getting the most growth can impact…margins…The key point is we’ve got great billboard margins.  42% margins.

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