Here’s a selection of Scott Wells comments on out of home demand, self service ad models, digital billboard conversions and the European sale at last week’s Goldman Sachs Communicopia conference.
Demand is strong
The tone with advertisers actually continues to be strong. We are having good dialogs heading into 2023…We’re certainly aware of the macro and paying close attention…but we’re not seeing cancellations. We’re not seeing downsizing…
On a self serve advertising model to reach small advertisers
So one of the things we’ve been doing over the last year is lead generation activities to see what sort of demand is latent out there and we’ve seen enough…so we’re putting together an inside sales operation. The distinction is that this would not be an account exec force. This would be people online and on the phone to sell out of home with an electronic wrapper around them to enable them to get into self-serve…we think that that opportunity is probably nearly as big as the big advertisers…We’ve kind of got the lead generation engine but we need to completely tune that. We’ve got some work on our website we need to do. We need to hire and develop the team…
Digital Billboard Conversions
Digital conversion is a key strategy for us…We aim for locations where we have a long term lease or an easement…it’s usually a high profile location. When we do the conversion we typically see 4-5 times the revenue. Most of ours are 8 slots…you take a single piece of inventory and you turn it into 8 pieces of inventory. People don’t see all 8 ads as they are driving by so as you price it out it gets you to that 4-5 times uplift…We typically are going to see payback in a year or two…An opportunity right now is going deeper in our base where we’re able to convert…we’ve worked with a manufacturer on a lightweight low cost screen which we think could push digital conversion into our less premium inventory…
Digital billboard saturation not yet a problem
People ask about saturation all the time. We did have a real life experiment on this in one of our markets. We had a window open in one of our markets in 2010 where the ordinance was very broad and basically enabled digital in the entire city but had a lot of rules around spacing out…We went very very aggressive at that and we converted more than 100 units in this particular city in less than 18 months and there was a brief period of time when we were concerned…but by 2 years after we had achieved more than the 4-5 times multiple…we have a lot of markets where we have headroom.
European Sale
Whatever transactions we do may…not be deleveraging. But there are benefits…Our timing wasn’t great with inflation, Putin, European energy crisis…that put some constraints for the platform…it’s a much longer path…But I think what emerges on the other side is…a more focused, more profitable, attractive entity…
Billboard Insider’s take:
Scott Wells is right that a more automated sales model makes sense for some small businesses. But that doesn’t mean Clear Channel Outdoor needs to reinvent the wheel. It could provide an automated, self-serve option to small business clients tomorrow at no additional expense by plugging into the Blip network. Blip added 25% to Yesco’s digital revenue without cannibalizing clients. Blip increased revenue by 10% when installed Billboard Insider’s digital billboard in Sherman Texas.
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