Damien Venuto: Billboard's MediaWorks game makes perfect sense

Outdoor media companies have become the black horses of this era of digital disruption.

The era of a tattered billboard on a dusty road, waiting for the passing of a passing vehicle, is over. In recent years, we have seen that the oldest advertising channel form has quickly become a series of bright rectangles that change and sometimes even adapt to weather conditions.

Digitization of external media has increased the number of ads that can be broadcast on one site, resulting in a rapid increase in channel revenue.

The total amount spent on outdoor advertising has gone from $ 95 million in 2015 to $ 140 million in 2017. Data from the New Zealand Outdoor Media Association (OMANZ) show that the number of people working in outdoor advertising has risen from $ 95 million in 2015 to $ 140 million. by the end of last year, digital ad revenue had reached the point of 46% of all outside revenue.

Australian outdoor industry giant QMS NZ generated advertising revenue of $ 40.9 million in June 2018, down from $ 44 million a year ago, according to accounts posted at the show. of the Office of Companies.

And if this suggests the inevitability of a plateau, there is little evidence that the outdoor industry is facing the existential crisis that some traditional media are facing.

This means that outdoor companies are in the prime position of having a little money to spend.

The question then is whether it makes sense for a dynamic company such as QMS to acquire a 40% stake in a company that is down to earth and firmly grounded in media channels that do not have not benefited so much from the digital journey.

From the moment the rumors were about the potential merger between QMS and MediaWorks, there was reason to believe that QMS could choose to throw the TV in the trash and use only the radio and associated digital resources.

While the radio market has remained strong in recent years, reaching more than 80% of the population and seeing advertising spending increase from $ 274 million to $ 283 million between 2015 and 2017, a limited deal would have certainly brought two great media channels kiwi. But that would also have cut an important, but diminishing, segment of time spent in the kiwi media.

The media is all about reach and frequency, and it's hard to forget that 66% of New Zealanders still spend an average of 156 minutes a day watching linear TV. Admittedly, these numbers are expected to decline in the coming years, but cutting the television audience from the outset would have essentially put the new media entity in the dark after 19 hours.

The complete set – dubbed a quad-media piece – presents a force that could reach consumers in their cars, their phones, in the street and in the living room during the day.

It would not take much for a seller to make a good deal for Kiwi marketers, who are increasingly obsessed with the buzzword so often used: the "customer journey".

The biggest question is whether the New Zealand Trade Commission will be willing to allow these two companies to merge, given its earlier reluctance to allow Vodafone and Sky, as well as NZME and Stuff's # 39; unite.

At this point, it's hard to see why the commission should block the merger between companies.

The plurality of media is not a problem, since QMS does not have any news assets. And while companies compete for a share of ad spend, they operate in completely different channels, which means that a merger will not reduce the overall level of competition in the media market.

There is of course also a New Zealand precedent for a quad-media piece in APN, which previously held local resources in print, radio, digital and outdoor media before APN Outdoor was removed. 2013.

That said, one of the possible arguments against a merger could come from small players in the outdoor sector who feared that the global offerings offered by a large multi-channel media company would reduce the prices of media media. Outside and may, in turn, remove them from the market.

The obvious counter-argument to this is that outdoor advertising has always been reduced to "location, location, location" and as long as other market players retain high visibility and high traffic sites, they always be able to charge a premium regardless of what MediaWorks and QMS are doing.

Let's be interactive

Many New Zealand advertisers have begun experimenting with the flexibility offered by digital outdoor advertising.

Results on the move

In the 2014 election, digital billboards were first used to keep Kiwis informed of the results. A partnership between MediaWorks, SparkPHD, the digital media agency Ngage and APN Outdoor has allowed live viewing of regional and national results on digital billboards around the site. country.

Things become territorial

Another example of digital experimentation was seen during last year's Lions tour, in the form of a large digital screen that would change depending on the number of fans that would be there. The campaign, which resulted from a collaborative effort between All Blacks sponsor, Steinlager, and the British Lions sponsor, Guinness, saw fans claim their territory to the screen, which then remained unchanged. until another group of fans shows up.

In 2014, Speight launched a series of digital billboards that adjusted as the temperature rose during the summer months. The scale went from "a little thirsty" to "scorched earth", the latter suggesting that it was clearly the hour of beer.