Is our strength also our weakness?
by While I was reviewing what the ooh media industry accomplished in 2023 and what is on the horizon for 2024 I could not help but come to the conclusion that one of the industries strengths is also possibly its greatest weakness.
The financials of ooh media are phenomenal. Strong and recurring cash flows, incredible margins and stable and manageable cost base. What dreams are made of, well mine at least….
The only way you properly mess it up is by adding too much debt or complicating the hell out of the business model or both.
This incredible financial strength however is a double edged sword. From what I have experienced through acquisitions, conversations with founders of amazing start ups and the fact that 5 of the 6 largest companies (That I have seen first hand data on) can’t grow revenues at GDP + leads me to believe that there is a level of complacency driven by financial security that is not healthy.
I can’t name a single traditional ooh media company in the US that is innovative, has ripped up the rule book and done something different that pushed the industry forward and made everyone sit up and take notice (Let me know if I am wrong and if I am what the innovation is and the company doing it please.)
Innovators like #BlipBillboards, #LucitCC, #Apparatix and less so #PlaceExchange and #Vistar have all been developed by people that came from outside the industry. That should be of no surprise.
Complacency in my opinion has become commonplace in our industry safe in the knowledge the economics of billboards will consistently and predictably put cash in the bank year in and year out, the permit systems prevents new competitors from entering your market meaningfully and your investors, if you have any, are predominately dividend and real-estate focused.
Under these conditions Why do difficult things? Why challenge how you do things? Why take risks? Why adopt or develop innovative new technologies that help ad clients, salespeople and managers get better results? Why invest in new products?
Without risk takers and visionaries in significant leadership roles the status quo will always prevail. What has become obvious to me is that if we are relying on the big established players to drive the industry forward, to innovate and deliver change we will be sorely disappointed
Do you agree?
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Consolidation for protection is wrong but consolidation for scale, effectiveness and making OOH media more accessible, measurable and accountable is to be applauded.
The latter was the driving force over the past decade and helped OOH to navigate post-Covid, but I hope the former is not what we are going to witness next.
Let’s own the fundamentals of mass reach, flexibility at scale and real-world presence for brands in a safe and trusted part of consumers’ daily journeys. This is enough to deliver shareholder value as well as impactful and effective advertising.
Excellent points Ron Graham. The question we pose, Could Shareholder value be in conflict with OOH Industry success? thank you for your comments
Must disagree with this guy 100%. What he fails to see internally within organizations there are folks like me who are constantly innovating and changing systems processes and THE WAY! I believe the issue is folks like him who start up OOH companies solely to sell to the big 3 and never innovate themselves.
As always enjoy reading your articles daily to start my day. Keep up the great work!
Tenable points Paul. My question would be are you speaking to innovations or efficiencies? We appreciate your comments and support to OOH Today.
Paul appreciate the comment. The value people like you bring to the industry and the companies you work for can never be overstated. I think we may have different definitions of innovation which may be fueling your disagreement. To me, at first glance what you are describing are efficiencies but I also understand those can be innovations. However Innovations to me are things that lead to huge changes in the way people think about an industry. For example the advent of digital was a game changer for the industry and was an innovation. However I would strongly argue that the industry took that innovation that promised so much and has done very little with it. Blip for example is another innovation worth taking note of. They have taken the sales process of billboards and turned it on its head. Billboards have always been sold by sales people but with the advent of digital a new opportunity was born. A way to sell digitally independent of people 24 hours a day 365 days a year. How many ooh companies have evolved their sales process to fit the digital world?
If you knew me, the reason I started Trailhead Media and how hard it was you would quickly realize selling to the big three was the furthest thing from what I wanted to accomplish. I set out to build a company that could and would have showed the industry that they is a different way. I unfortunately left the company after the hard work had been done but before I was able to implement my vision of what an ooh company could be through innovation. I will get a few more bites of the apple and look forward to having further conversations on this topic. Please feel free to connect on LinkedIn as I would love to hear about the work you are doing.