Horse’s Mouth

Fresh off the back of winning the Media Business of the Year at the Beacons, Adshel New Zealand general manger Nick Vile sits down with Jonathan Cotton for a quick chat about growing revenue, digital creepiness and whether the future is programmatic.

Nick Vile.

Jonathan Cotton: Why do you think Adshel stood out among the finalists at the Beacons?

Nick Vile: We were obviously pretty chuffed to win Media Business of the Year and receive that recognition from a group of our peers, and it is a great reward for the hard work that the team have been putting in over the last few years.

The entry itself was explicit in what was required – a sound strategy and demonstrable evidence that strategy leads to results. Our entry focused on 2016 being the escalation year of a strategic plan, which is underpinned by our company purpose, ‘creating smarter connections for communities’.

Smarter connections? Smarter in what way?

That’s smarter connections through technology, smarter connections for advertisers with their consumer communities, smarter connections with our client communities and smarter connections for communities themselves via our network of street furniture infrastructure.

So how have you been working towards that?

Last year, was an escalation year for us because we launched a national digital roadside network of 150 screens, following the successful trial of the Auckland premium network of 35 screens in 2015. The extension of our national footprint included coverage in Auckland, Wellington and Christchurch, providing the opportunity for advertisers to be contextually relevant at a scale previously unavailable to them.

We also further invested into our data offering through the launch of our Adshel Audience

Profiling programme, enabling advertisers to use the scale of our poster network but be very precise with their audience targeting.

Is it digitisation specifically that’s feeding the market’s growth at the moment?

It’s part of it. There’s been significant investment in digitisation, there’s no doubt about that – you only need to drive around Auckland to see the number of digital sites in play at the moment – but there’s also been significant investment in data and audience profiling and that helps support the growth profile too.

The big one though, in terms of the benefits out-of-home delivers to advertisers is around that fragmentation of media, particularly traditional broadcast media. Out-of-home is being seen as the last true broadcast medium and at the moment it’s bridging that audience gap that’s been created.

Given that a lot of this growth is contingent on population density increases, do you forecast that growth will eventually plateau?

The media market valuation that was released by the ASA (Advertising Standards Authority) last month had the market valued at $2.5 billion, and out of that, outdoor represented only five percent of the total market. So even with the significant growth we’ve seen over the last two to three years, we are still only a five percent medium. That to me talks to continued growth opportunity. Those macro trends are not diminishing and technology is only going to continue to enhance our offering, so there’s an opportunity for that trend to continue. The measurement issue will be resolved soon too, so I see no reason to think it’s going to plateau.

That question around measurement – historically, it’s been a big problem for the outdoor industry. How are you solving this?

There’s not a standardised or unified approach from the sector to an audience measurement solution at the moment, and that is an issue.

Luckily, this is being addressed at an OMANZ (Outdoor Media Association of New Zealand) level right now. With the recent appointment of Derek Lyndsay into the role of GM of OMANZ – a role that had been vacant for 12 to 18 months – we’re starting to see he’s really driving in that direction.

From an Adshel perspective, we’ve always been very supportive of a unified approach to audience measurement and I think it’s a key priority for the sector.

We’ve been through that initial period of investment into digitisation so now’s a really good time for this sector to come together and tackle those core issues as a cohesive group and audience measurement definitely has to be one of those key priorities. No matter how skilled you are at audience profiling, advertisers still want to know at a base level, ‘What was the audience that was delivered to me?’, ‘How much did it cost?’, and ‘How effective is that spend into the outdoor medium versus the spend into other mediums?’

What would that measurement solution actually look like though? What specific technology are we talking about here?

I challenge the sector to develop a measurement tool that is based on technology that delivers geolocation data. That’s going to be key to solving the measurement problem moving forward. It will have the ability to deliver accurate and real-time audience information versus that historical theoretical methodology that we’re moving beyond now.

Some outdoor measurement methods can be quite...creepy. Do you think this could turn into a problem for the industry? Do you foresee some resistance to the use of geolocation data from the consumer?

The impact of geolocation data on privacy is definitely at the forefront of our discussions both internally and externally. The reality is though, that any solution will only ever use anonymised and aggregated data anyway, and ideally that will be coming from consumers who have opted-in via location services in their phones.

At the end of the day, there are a lot of other social media apps that are tracking people’s movements anyway. It would never be any more intrusive than what’s already become the status quo for most of us.

There have been some criticisms of outdoor because it leaves the consumer with no choice – the moment you walk outside you see ads whether you want to or not. Do you think there will be a backlash against this type of so-called attention theft?

You look at the cityscape in New Zealand or around the world and outdoor is now a very well established part of any urban landscape. And fortunately there’s been advances to ensure that cities are maintaining an [aesthetic] balance and that things that are important to all of us – like a city’s heritage – are being protected. Take Mexico City as an example. There’s a very good balance there around what’s acceptable from an outdoor media perspective and what’s acceptable from the rich history and culture – they’ve really found that balance point.

In New Zealand, there have been advances around that as well and the Auckland Unitary Plan is a really good example of that.

What are your thoughts on selling outdoor advertising programmatically? Is any of your business here currently sold that way?

It isn’t in New Zealand, but in Australia we’ve run a couple of trials over the last 18 months with some of our Sydney Rail inventory. We recently announced relationships with both Rubicon Project and Lotame, which have traditionally operated in the digital online programmatic space, but we prefer to refer to programmatic more as ‘automated trading’.

The issue to date is that people have been taking programmatic methodology and trying to apply it to the outdoor space. Outdoor isn’t one-to-one like digital is though, it’s one to many. But that thinking is now starting to change.

Automated trading is about enabling ease of planning and ease of trade and it’s a potential sales model that will support investment from what have been traditionally non-outdoor investors. If we’re going to utilise digital inventory to its most effective and allow people to buy campaigns on a daily or time-of-day basis, we actually need an automated trading platform to fulfil that requirement.

What would be the timeline for a process like that rolling out?

It’s very much at the forefront of our thinking. The key for us is solving the geolocation audience data issue to be able to do that.

How do you see the industry changing over the next five to ten years?

2017 will see further digitisation. There will be a push to better understanding the audience. There will be a convergence with mobile in terms of a complete campaign solution – mobile and outdoor working really well together. There will be more advances in automated trading, further consolidation across the sector and, I believe, less outdoor assets, but assets of better quality that can deliver the same audience. That will be an insight that an audience measurement tool will be able to facilitate.

For Adshel, we are in the midst of rolling out an additional 70 screens to take our national network to 220, with further coverage in the existing markets of Auckland, Wellington and Christchurch – focused on proximity to key retail precincts, plus extension of our national footprint with the inclusion of Hamilton (focusing on the CBD, The Base and Chartwell).

We will also see further development of our data offering this year with various initiatives to ensure that we continue to offer solutions that deliver results for our advertising clients and ease of trade for our agency partners.