Outfront Media’s Chairman & CEO Jeremy Male appeared at Goldman Sach’s Communacopia 2016 yesterday. You can hear his entire talk here. Insider summarizes Male’s thoughtful and wide-ranging comments as follows:
- Revenue healthy.
- Little political.
- Rates rising.
- Data, geofencing and small cell deployment revenues small but promising.
- Steady as she goes on acquisitions and digital billboard deployments.
Here are some excerpts:
On revenue trends: “We feel that the environment remains pretty healthy…Retail sales has been down in the first half for us as a category…auto has been strong for us…the beer sector has been good for us…technology has been good for us…Tech can swing our numbers dramatically. A large tech company can spend $2-3 million in a quarter.”
On political advertising: ‘I wish political was a bigger business. We can’t carry political in our transit business. We have little in our billboard business.”
Onsmart platform to manage ad campaigns: “One end of it is screens. We’ve had small screen deployments in DC, NY and will be deploying in Boston…We use the cloud to reach each screen. This allows us to put apps onto the screens…We want screen space to be bought programmatically by data…You can say I want to target 30-40 year old Hispanic females in the Bronx who have visited the target website during the past month…Then you can put the content straight to the board…We are in build mode…developing computer interfaces. We are doing the assembly ourselves. The technology will apply to any screen including all of our 600 digital billboards.”
On geofencing: “ We have a product called Outfront Mobile. It’s an offer we make to local advertisers. For a 15% increase in the cost of your billboard campaign we will allow you to push mobile impressions. The message will push to the phone an ad which is tied to the billboard… We’ve sold getting on 400 campaigns…In dollars its low single digital millions…Every time you sign up for an app from a company you are potentially signing up to get geofenced push ads.”
On the Diamond Communications small cell wireless antennas deal: “We’ve appointed Diamond. We are signing master license agreements with the main carriers. We continue to feel that this could be an interesting revenue stream…Right now the dollars are relatively small and the interest is relatively high. The carriers are bearing the capexp. In some situations we may need zoning…In some cases we may need negotiations with our landlord…We think we have 25,000 structures with potential to be utilitized. We think this is a 50% ebidta business.”
On Pricing: We are really pushing pricing…our inventory is pretty much the same. The growth that we are seeing is rate. That’s good news. We’re starting to see the benefits of concentration on pricing.
On Outfront’s Plans To Deploy 100 Digital Billboards Per Year: “It may change if the cost of deployment declines or making boards smart leads to more revenues…Deployment is limited by zoning restrictions…A takedown ratio of 4-6 per digital board dampens deployment. Some municipalities prohibit digital. Some markets are overbuilt…We want our digital boards to have an IRR of north of 20%/year.”
On Acquisitions: “There are quite a few opportunities…At any time we are probably looking at 3-4 deals. Deals which appeal to us need to have sales and expense synergies…Pricing is high. Clear Channel sold some second tier markets at 13 times…We’re trying to be very smart. We’ve trying to be very selective.”
On Out of Home’s Share of the Ad Pie: Out of home is 7% of total revenues in the rest of the world and 4% in the US. The US won’t get to 7% because there’s a small pedestrian base and smaller transit ad base but there’s room to grow, particularly with national advertising.
On Transit Advertising: “We did a study. 92% of transit contracts are won by the incumbent.”
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