Lamar CEO Sean Reilly was entertaining as ever at Wednesday’s Morgan Stanley Tech, Media and Telecom Conference. Some of the highlights.
On taking share from local TV and radio
I think it’s the next shoe to drop. I’ve seen it in what has happened to print…Our fastest growing and largest category is professional services. They used to use the yellow pages and some of that came our way. A lot of the display ads for local retail that used to go to the newspaper. Some of that is coming our way. And I think the next shoe to drop is local network affiliate television. Their business model is challenged. They still get a tremendous amount of auto, for example. I think that some of their advertisers will soon get disaffected with audience fragmentation and I think some of that will come our way as well…We have done real well with amusement/entertainment/call-to-action type stuff. And I’m sure we’re taking that from radio. Radio used to be the place a concert promoter would go if it’s Monday and ticket sales are soft for the Saturday concert. They would cut a radio spot, get it up on Wednesday…today they’re calling us.
Programmatic
It’s not necessarily a product or a technology. It is a channel that we used to not be able to tap…We developed an open architecture API that any DSP or SSP can plug into. Today we have four SSP/DSP partners, Vistar being the largest, but we also have the Place Exchange…Broadsign and Hivestack. Last year we did $13 million on that channel. This year we’re budgeting $20 million…If it’s open exchange that is a last second buy…On the guaranteed, reserved impressions buy through the private marketplace that is guaranteed space…An interesting phenomenon. Private marketplace we’re getting slightly higher CPM’s than we get at the local level. Open exchange, slightly lower.
Digital Billboards
I’m trying to get them to be more aggressive. Last year we put up only about 200 greenfield conversions but we acquired 135…We need to do better this year…That activity emanates from the field…I think this year 250 looks good. I’m trying to gear up to be a little more aggressive for 2021. I think my goal for 2021 is going to be 300…It involves incenting our local management to be a little more aggressive…
Coronavirus and the Supply Chain
We buy from domestic producers. Our largest supplier is Daktronics. They’re headquartered in South Dakota. We’ll be fine.
On Lamar’s appetite for acquisitions
We bought 9 free standing billboard companies across several states – spent about $700 million – over the past 15 months. Last year was active and a digestion year. I wouldn’t call this year a digestion year…All the digestion has happened…There just aren’t that many big ones that are ripe. Big ones defined as $200-500 million. So we’re going to go back to what we do year in and year out…we do $100-130 million worth of little fill in acquisitions. $5-10-20 million acquisition deals.
On OUTFRONT
They’ve managed their business to make it too valuable for me to be able to afford…There’s not a lot of kitchen logic behind a Lamar/OUTFRONT combination because of the large market transit. Not really what we do well
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