Outfront EVP and CFO Donald Shassian spoke at the Wells Fargo 2016 Tech Media and Telecom Conference on November 9, 2016.  You can listen to the webcast here.  Here’s what caught Insider’s attention.

• Intro remarks:  “The billboard is doing well…Local is strong…our yields on static and digital are going up…Canada’s improving.”

• Outfront installed fewer billboards in 2016:  Outfront put up 139 digital billboards in 2014.  139 new digital billboards in 2015.  80-85 in 2016.  It’s a timing issue due to zoning requirements and manufacturing issues.  Outfront hopes to be above 100 in 2017. The pipeline of conversions is still robust.

• Outfront’s Margin Improvements: “We have lots of markets with fixed cost leases so when revenue grows our margins grow.  Our folks are also taking better accountability of lease renewals and operations.  People understand that bonuses are tied to EBIDTA.”

• Transit Contracts: “We’ve been successful getting transit contracts.  Jeremy Male’s background is in transit.”    Outfront is taking over the MBTA contract in December.  Outfront evaluates transit contracts like an acquisition.  It tries to generate higher revenues than incumbent.  Sometimes Outfront has to give a higher revenue share which is OK if revenue grows enough.

• Billboard measurement: “The industry is building a process to refine measurements.  We are in parallel building something on our own.”  Outfront is building a data management platform to collect info about customers and to correlate that info anonymously.  It will allow Outfront to deliver targeted markets to advertisers.  It will enable outdoor to get more than 4% of the total advertising pie.

• Why European out of home gets a bigger share of the advertising pie than the US.  “Outdoor has 8% of the pie in Europe.  European cities look a lot like Boston and NYC with an extensive rail network which provides ad opportunities.”

• Small cell deployment.  Outfront has signed agreements and given latitude and longitude to cell and data providers but the process is slow to develop.  Shassian says Outfront is competing against buildings and telephone poles for the small cell site locations.

• Onsmart technology platform: Includes new technology screens – ipads on steroids.  Outfront is trying to get the cost of screens down.  Also working on a geofencing product to geofence a billboard which will push an ad from the billboard to the mobile phone which crosses the geofence.  This gives sales people another tool to sell.  Data management will allow Outfront to sell by audience, instead of selling by location.

• On privacy:  “The data we’re collecting is totally anonymous…We’re correlating data points with purchasing.  We don’t know who it is.”

• Maintenance:  Maintenance capital expenditures are running 1.0-1.5% of revenue.  “I think this is sustainable.  We’re different than others in the industry.  We don’t have wooden structures.  Ours are metal.  Enhancements include painting and safety issues. “

• On mergers and acquisitions:  “We’re smart and selective.”  We’ve done a number of small acquisitions.  We want top 25 DMA’s.  We want revenue improvement.  We’re not constrained by leverage.    We want to de-lever to 3.5-4.0 to have firepower to make a great acquisition if one comes along.

Insider’s take:  Get used to “the data is anonymous.”  You will hear that again and again and again as outdoor execs try to assure privacy advocates that billboards are not spying on them.  Anonymity is important.  Governments can be the worst privacy offenders.  King County uses grocery loyalty card data to figure out who owns pets and then it sends them letters warning of a $250 fine if they do not license the animals.  Grrrr.

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