"Digital transformation”, like “upskilling”, “blue sky thinking” or “creative synergy”, doesn’t really mean much.
A platitudinous buzzword; a bandwagon hopped aboard by businesses in fear of appearing archaic.
Or so I thought. Exterion, to its credit, without having mentioned it, is achieving something akin to digital transformation, with the help of the man who dragged the Daily Telegraph into the digital age, Dave King, its new managing director.
After a whistlestop tour of Exterion’s new office space at LaCon (Lamb’s Conduit) House, an ultra-modern, labyrinthine den with a replica Tube station and iPads on each door, I sit down with King, and chief executive Shaun Gregory, to discuss the changing face of Out Of Home (OOH) advertising.
Last year Exterion beat JC Decaux to bag the largest outdoor advertising contract in the world – the TfL London Underground – worth an estimated £1.1bn. After a series of successes, Exterion is changing the way it operates to accommodate digital change.
“We have the vision of being a digital media company powered by data,” says King. “And for me, what I could see was a resilient industry that has been doing very well – it’s been growing – while other markets struggle.”
OOH spend has been on an exponential uptick in the last few years, as the pasted poster billboards of old are upgraded to digital screens.
“Digital accounted for about 35-38 per cent of OOH advertising last year, up to about 44 per cent in the fourth quarter so it’s pretty rapid growth,” says King. “Of course it will take time, but I think from our point of view, we want to accelerate that change.”
OOH sits in an interesting place in AdLand – consumers literally can’t ignore it in a world of ad-blockers. It’s widely accepted that OOH – whether bus wraps, billboards, posters or screens – adds a colourful dash of character to the grey, urban landscape. A recent survey carried out by Exterion’s work.shop.play. consumer panel found that 80 per cent of those who dislike social media or TV ads do like Underground ads, with six in 10 saying the ads provide a welcome distraction.
“Look at the digital world we work in,” says King. “People deliberately blocking ads, skipping ads. They find them inconvenient. But actually, from the research we’ve done, we know that people like the ads on the Tube – and that’s special.”
Despite its efficacy, it’s the transition to data-led digital media that is driving the renaissance of OOH.
“It’s almost a blank sheet of paper when looking at how you want to target consumers,” says Gregory. “We’re utilising data in a really intelligent way. If you look at the Underground and what we do with Telefonica, we’re getting the data when someone enters the estate, and we get the data when they leave the estate, so that we understand the journey they take, and we can target them more accurately.”
Advances in technology – whether ribbon screens or hyper-local proximity networks – combined with the profileration of mobile and Internet of Things, has been a boon for OOH in terms of targeting. But it’s also changing the way that OOH media is bought.
“The days of buying 200 panels for a month or six weeks are over, and actually, what you can now buy is audiences,” says Gregory. “And that can be based on demography – so you can go 16-24 or 24-34 for example, or you can go location-based, or find people with a propensity to shop – you can do all sorts.
I ask the pair if they ever envision a time when all of the posters in London will be digitised.
“The truth is”, says Gregory, “that you’ve got a big broadcast media with an ability to also narrowcast [transmit to a localised or specialist audience], which doesn’t exist in all forms of media. And at the same time, the digital aspect of our media is actually accretive, it’s not eroding away.”
“To that point”, adds King “the ultimate acid test is that there’s more money being spent in the field. Digital OOH revenues are increasing 25 per cent year on year, because A) it’s there, and B) it works, you can monetise it. But in other mediums they haven’t been able to monetise digital. But we can, there’s a direct correlation. And as we increase the percentage of our estate to digital, we see the revenues grow, but also, we deliver better solutions for our customers.”