July out-of-home update: revenue soars, consolidation continues

July update with APN Outdoor research initiatives and oOh!media acquisition plans

APN Outdoor’s latest acquisition, oOh! declines to bid

APN Outdoor has acquired the outdoor advertising assets of Metrospace Advertising and iOM.

Metrospace is an independent operator in Queensland with a portfolio of 100 panels offering digital convergence opportunities, noted APN Outdoor. The business is changing hands for between $16.3m and $19.5m depending on site-specific conditions. The annualised revenue opportunity at Metrospace is in excess of $6m.

iOM is based in Victoria and offers a mix of 130 static and digital billboards, and also offers digital convergence opportunities.

APN Outdoor is spending $16m plus iOM cash at completion expected to be in the range of $3m. The annualised revenue opportunity at iOM is around $7m.

Richard Herring

APN Outdoor CEO Richard Herring

APN Outdoor CEO Richard Herring said: “The Metrospace outdoor assets comprise an excellent portfolio of sites that not only strengthens our position in Brisbane and the wider state, but presents immediate high-quality digitisation opportunities. Similarly, the iOM portfolio is a significant addition to our existing Victoria assets and contains recently developed digital sites as well as further exciting digital opportunities.”

oOh!media had a sales representation agreement with both companies, but CEO Brendon Cook told Mediaweek that oOh! decided not to bid for the assets. In 2014 oOh!media selected the sites it wanted to acquire from iOM and then they were repping the sites that remained with iOM. “We selected the 45 iOM sites we wanted that we thought best complemented our existing inventory.”

With Metrospace, Cook explained: “It is a nice business and we have been involved for a long time. We looked at purchasing it, we believed it had a certain value, and we offered that, but someone offered more.”

Cook did note that the attraction of both Victoria and Queensland is they offer a regulatory environment where OOH operators can achieve what they want. “We have been very happy with our Queensland development pipeline and ultimately didn’t see the need to purchase anything more.”

Brendon Cook

oOh!media CEO Brendon Cook

oOh! extends Lendlease partnership in regional

Lendlease announced this month the largest installation of large format high definition digital screens throughout their retail assets in regional Australia.

Nine screens featuring the latest digital technology will be installed across seven centres – Erina Fair and Macarthur Square in New South Wales, Sunshine Plaza, Caneland Central and Cairns Central in Queensland, Craigieburn Central in Victoria and Lakeside Joondalup in Western Australia.

The large format digital screens, the largest spanning 8 metres by 4.6 metres, feature advanced intelligent technology including real time detection and feedback, require 40% less power than previous digital screens and will incorporate a variety of content including news, weather updates and community announcements.

Commercial director of oOh! retail Blair Hamilford said the addition of large format screens would make brands unmissable in front of shoppers and add to the overall shopping experience, propelling Lendlease centres nationally to being among the most progressive shopping, entertainment and leisure destinations in Australia.

Commercial director of oOh! retail Blair Hamilford

“These screens will become part of our Evoke series, which enables advertisers to get their messages to millions of shoppers each week, and easily tailor their messaging according to the time of day, date, news, events or weather,” Hamilford said.

Outdoor ad spend sets pace

SMI data for the month of June indicates that outdoor ranked behind only television and digital when it comes to money allocated by media agencies. Television accounted for 47% of the monthly spend, with digital on 25% and outdoor on 9%. Across the financial year 2015/16 automotive spending through media agencies was the #1 category, a spend that helps “drive” outdoor growth.

Meanwhile OMA data covering the complete outdoor sector exceeded the previous year’s results with Q2 2016 posting an increase of 18% on net revenue year-on-year with $184.4 million, up from $156.2 million for the same time last year. These results reflect a continuous growth trend in 2016, following on from the all-time high revenue growth at the end of 2015, when revenue increased by 17% over 2014.

Monthly results have continued to exceed expectations with the industry posting an increase of 12.1% for April and 20.9% for May year-on-year. June figures show an increase of 20.6% year-on-year, with net revenue of $65.3 million. These increases continue to reflect across all categories: roadside billboards, roadside other (street furniture and transit), transport (airports) and retail/lifestyle/other. Digital revenue is sitting at 37.3% of total net revenue year-to-date, which is an increase over the recorded 23.1% for the same period last year.

Research: APN Outdoor explore the media jungle in 2016 study

APN Outdoor this week introduced its headline research piece for 2016, Media Attention – It’s a jungle out there. Following on from previous studies, such as The Attention Economy in 2014, The Airport Economy in 2015 and #myrealworld in 2015 and 2016, the new study promotes the case for outdoor to be the centrepiece of more media campaigns.

The program was compiled after a 3,000-strong quantitative study and metropolitan city, trans-Tasman focus groups. The highlights as put forward by Clarity Strategic Research found that 58% of Australians and New Zealanders see more advertising today than they did in the past, and while they feel ambivalent toward advertising in general, consumers are overwhelmingly positive about outdoor.

Janine Wood, general manager – marketing APN Outdoor, commented: “Previous studies APN Outdoor has undertaken identified outdoor as the least avoided medium. Two years on this still rings true. This study has also proven how effective the symbiotic relationship is between outdoor and TV.”

Janine Wood, APN’s marketing GM

Media Attention – It’s a jungle out there! is in market now after a launch event at Melbourne Zoo.

APN Outdoor has been busy this month with research documents as it also published the research snapshot Outnumbered earlier in July. Outnumbered, produced as both an online and hardcopy book running to 116 pages, carries insights into all of APN Outdoor’s formats.

The book provides a guide to the research available from APN Outdoor’s library and archives. Top-line insights include there are 9.4 million Australians who drive on major roads every day, to specific stats such as transit is #1 for ad recall with 54% of consumers recalling seeing it in the past seven days and that the average Australian’s airport dwell time is 139 mins before international departures.

Commenting on Outnumbered, Wood said: “Our reputation for research precedes us in market and though we are constantly evolving, undertaking new studies and projects, Outnumbered marks a moment in time for APN Outdoor and the strength of the wider industry. Outnumbered is a comprehensive tool to allow our customers and advertisers to become even smarter about outdoor.”

Junkee and oOh! selling separately

Junkee CEO Neil Ackland

Four weeks since the announcement of oOh!media’s deal to buy Junkee Media, oOh!’s Brendon Cook  told Mediaweek oOh! is going through the integration process. “We bought Junkee Media for it to continue as a stand-alone business with the idea of using its extra creative talents to help us in some areas where we both operate like universities and cafés.” The deal was a long time coming with Cook talking to the Junkee CEO Neil Ackland and his team for close to two years.

Cook confirmed Junkee and oOh! will maintain separate sales teams. “We will collaborate on the right client opportunities.”

Cook wouldn’t specify when the original Junkee partners could cash in their remaining 15% equity, but he said it was a number of years. It remains a nice incentive for the owners to keep Junkee powering along. “We want them to keep innovating in the category which will help them earn more from the share.”

oOh!media funded the acquisition from existing cashflow. Cook noted that oOh! still has access to investment funds of around $50m+ if another opportunity comes along. “These days we get approached more often with investment opportunities. We have identified some businesses that one day we might like to acquire.”

The right fit: VMO acquires Active Media

Another July acquisition was Val Morgan Outdoor (VMO) announcing the purchase of Active Media Group (AMG) – the premium multimedia business representing Fitness First Australia, Goodlife Health Clubs and more. VMO’s acquisition plans to deliver 10,000 digital screens over the coming months and signifies the diversification of the portfolio.

VMO MD Anthony Deeble

VMO’s managing director Anthony Deeble said: “I’m delighted to have acquired a forward-thinking multimedia business that engages traditionally hard-to-reach, high-value audiences in the premium, health and wellbeing category. This strategic acquisition also marks the differentiation of our portfolio. We are transforming from a purely DOOH business to one with a digital content and publishing arm and that’s very exciting.”

The sale of AMG comes from private equity group Oaktree Capital, owners of Fitness First Australia. AMG operates in Fitness First Australia and Goodlife Health Clubs with assets that include a digital screen network, Fitness First magazine and website as well as an experiential division.

Active Media Group will immediately merge into the VMO portfolio and become known as VMO Active. VMO operates networks in shopping centres, petrol stations, office towers and now health and fitness environments. It will also manage an online content portfolio and Australia’s highest-circulating health and fitness magazine.

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