Ooh Media reveals plans for coming year: ‘We’re rebuilding the way an out-of home company operates’
After its 14th consecutive first-half-year of growth, Ooh Media’s chief executive Brendon Cook has said it is “rebuilding” the way an out-of-home company operates.
In an announcement on the ASX yesterday morning, the out-of-home company revealed half yearly revenue growth was up 18% year on year, to $173m, and EBITDA (earnings before interest, tax, depreciation and amortisation) climbed 19% to $32m.
On a teleconference call, Peter McClelland, chief financial officer at Ooh Media, said the company was investing in a “trading and data platform” which would “help facilitate and expedite the delivery of campaigns” allowing advertisers to properly trade in a digital environment.
Speaking with Mumbrella following the presentation about the details of the company’s investment, Cook added: “In the way a market might look at automated trading in terms of saying ‘I want to buy particular hours, or particular inventory on particular days, we have to make sure we have the capabilities and systems in place to manage those inventories and handle that.
“What we are doing is rebuilding the whole way an out-of-home company operates and that just takes time to do,” Cook said.
Cook was pleased with the H12017 results
“You’ve got the start process and we’ve started it, but it just takes time. It’s like re-engineering the way processes work in an industry that’s a 100 years old. And that’s what you are talking about.
“It’s the reality, it’s changing.”
The half-yearly results also indicated large digital out-of-home growth for the company, with 52% of total revenue now coming from the company’s digital assets.
Today, Ooh Media has 8,000 digital screens, and eight online platforms. Cook said while it came earlier than predicted, he was “delighted” with where the company was at.
Ooh Media digital growth
“When we listed in late 2014, we said we thought we’d get to the 50% by 2018. We’ve obviously got there a bit quicker – a combination of organic growth within the business and a couple of acquisitions like ECN [Executive Channel Network],” he said.
“The whole proposition for us has been about building a diverse set of products that deliver diverse audiences so that we can provide for advertisers, based on their objectives.”
Asked about any further acquisitions and where he saw new opportunities, Cook said the company always looked to areas which delivered a strong audience, but his focus would be in the company’s latest acquisitions – Junkee Media, Executive Channel Network and Cactus Imaging.
He said ECN was about “targeting the office and business sector”, Cactus was about ensuring “speed”, “quality” and “capability” for classic inventory, and Junkee was a content play, linking online products to out of home through mobile to build new audiences.
“And we proved that ourselves, through our university product,” he said.
Ooh Media’s Hijacked rebranded as Uni Junkee in June
“Now we’re hoping to enlarge that with Millennials and Gen Z the first target, and [today] we will also launch a new product called Upsider, which is aimed at C-suite market play.
“They are medium to long-term goals, they are the goals that we’re stretching the horizons that we see out of home needs to be able to play in.”
Cook added the company had locked in a $1m contract in the office space, however would not disclose the name of the client.
“It’s the first time offices are ever going to handle a million-dollar client in its history and it’s showing the way that clients are starting to understand the way they can use the medium at a larger scale.”
However, Cook still sees the importance of the company’s classic inventory, which includes the static billboard.
“At the end of the day, not everything can be digitised and classic is still not having any audiences disrupted, still delivering the great values and the great big bland propositions that it’s ever done,” he said.
“You only have to look at the Nike sign on the silos or the Apple’s campaigns globally.
“From our perspective there’s a mix but what it really means is that we have two products.
“They are not the same, they should be used differently, and we are only at the early days of clients creatively starting to use data and contextual, and environmental relevance around about how they use their digital creative on out of home far stronger than what they are at the moment, and that will be over the next two years emerging not in Australia, but globally, as we start to see on scale the use of digital the various creative you can have.”
Last year, Cook said creatives and brands weren’t quite there in using digital out of home’s offerings.
Speaking after yesterday’s results, he said there was still more work to be done: “As an industry in ourselves, we still have some more work to consistently improve systems and speed to mark and capabilities around all these things, but conversely there’s this big untapped version of what we can do today, that is not being effectively used creatively.
“The community of creatives and clients are really starting to get that now, and I would hope over the next 12 months, we’ll see an escalation of the use of the digital side of the medium, the way it can be physically used.”
Ooh Media now has 8,000 digital screens in its inventory
Commenting on the company’s only sector which lost revenue – its fly category – Cook attributed the loss to three big advertisers which had reduced their spend in the category.
“There’s only a limited amount of space, so if you get three long-term advertisers reduce the spend as they change from strategies, it’s not as easily replaced,” he explained.
“We’ve actually increased the number of advertisers using the medium, just not at the volume they were, and that’s given because unlike online, we have a sense of exclusivity around our fly environments.
“That takes some time for people to get their head around and move dollars from elsewhere back into that category, but in terms of total clients, total clients have actually increased and total client expenditure has increased. It’s just those three very big ones [advertisers].
“It just takes longer to build up that embedded use of the medium over a long period of time, and that’s what’s going on at the moment.”
The company has no material contracts up for renewal in the second half of the year, but Cook confirmed his ongoing interest in the City of Sydney advertising rights tender which is expected to come to market later this year.
At close of day yesterday the company’s share price climbed 32 cents, with market capitalisation at $661.48m.
