Clear Channel Americas CEO Scott Wells had a wide-ranging interview at the Wells Fargo TMT conference yesterday. Some things Insider learned:
On the current market
It’s been a good market. If you look at our last twelve months through Q3 we’ve been growing a little less than 8% with the bottom line around 10% so it’s been a good stretch. The market is a factor in it…I think you see a number of large advertisers coming back to the space. There’s a really healthy growth dynamic going on…as people are competing for home delivery of food, as people are competing over the top, as people are competing for a variety of new emerging growth virtual meeting type of offers they are using out of home to advance that…The innovations we’ve been doing with Radar have been part of it as well.
On static billboards
While digital is an important part of our growth story it’s not the totality of the story. We have fantastic assets in all different types of categories…Within print there’s a few things happening… The market had pulled back from the practice of perming locations…taking a 6-12 month position to lock in a location…We have seen that start to come back…The other thing that’s an important callout this year is that we converted 1,300 of our locations into what we call premier panels. That’s where you take a smaller format sign – it’s called a poster in the industry – and you wrap it so it’s almost as big as a roadside bulletin. It gives substantially more visual space at a street level. And those have been selling extremely well…
On Digital Billboards
Digital is about a third of our business now…It’s higher in airports and lower in roadside…The reality is we’re constrained on a regulatory basis…We just got permission to build another 11 digital signs in San Antonio. It actually took us a decade to get that approval…There are a lot of parties interested in this. When we do conversions the typical economics are pretty compelling. Everyone always asks why don’t you do more of them…It’s about $300,000 to convert a large sign. We typically see a revenue uplift of 4-5 times from what was on the sign before. We’re seeing IRR’s in the high 30’s and low 40’s…
On the difficulties of taking good digital sign pictures.
It is not straightforward to get a picture of a digital sign in nature at perfect lighting…we are doing a lot of work with our installers and our teams to optimize how we capture that information. All of our signs have webcams on them but they don’t produce the beauty shots…That’s the sort of thing that nobody sees that has the potential to be a massive cost driver if we don’t do it right…We haven’t cracked this one yet. We’ve experimented with drones. We’ve experimented with crowdsourcing.
On Managing Lease Costs.
Our biggest cost is always the real estate itself. I’ve just finished a month of budget reviews with all of our markets. One of the topics that all of them have…is how to get cost efficiency out of their lease base. Markets evolve over time. Assets that were maybe in prime locations several years ago are just in good locations now. You got to re-adjust that rent.
Insider’s take: Clear Channel Americas (which is primarily the US) is on a roll. Clever idea to wrap two poster panels to make them more like bulletins. Interesting to hear Wells pushing for lease cuts even though the market isn’t in recession. Getting good digital sign pictures is always an issue. How do you take good digital sign pictures? Let billboardinsider@gmail.com or use the form below
[wpforms id=”8663″]
Paid Advertisement
