VIOOH opens up its arms to out-of-home ‘frenemies’
With JCDecaux’s majority backing, JC Conti has built the out-of-home sector the programmatic platform it needs to thrive in the digital age – can he convince rival businesses to join?
Earlier this year, the UK’s largest out-of-home business announced the launch of an automated trading platform – something it had quietly spent two years setting up and turning into an independent business to connect the world’s oldest medium with the cutting edge of programmatic adtech.
On June 12, to the surprise of everyone, JCDecaux issued a press release announcing the birth of VIOOH, and the future for posters looked, well, futuristic.
Part of the surprise, however, was that rival businesses would be invited to join the platform. It’s fair to say the industry, populated with fierce competitors of JCDecaux, was sceptical. At the time, Mediatel asked the major outdoor media owners if they would use VIOOH, and the answers ranged from ‘no plans to’, to no response at all.
Yet the platform’s CEO, JC Conti, has told Mediatel about his plans for the future – and they certainly involve a premium club of digital OOH businesses. Consider VIOOH not as a trojan horse, but as a gift to the entire market – of which JCDecaux just happens to be its largest client and backer.
Pretty much every out-of-home media owner has since been invited to look under the hood of VIOOH. They’ve also signed NDAs about what they saw and now it’s up to them whether they choose to join. So far no one has – but neither have they given an official no. Ask them about it now, and they’re still cagey.
VIOOH is 93.5% owned by JCDecaux, with the remaining share bound up with data specialist company Veltys. It launched just ahead of the summer holidays, and so its real ambition – to aggregate dozens of media owners selling premium inventory on a global scale – is still some way off.
“When a player in a market develops a great product, there’s always the temptation to keep it for themselves,” Conti says.
“However, the three Decaux brothers [Jean-François, Jean-Charles and Jean-Sébastien] have been clear about one fact: if they want to keep thriving and developing their overall business, then they need to develop the industry itself. I think that’s a really smart approach.”
Conti says that the OOH sector has, largely, been existing “in isolation” from what he describes as the “frenzy” of change witnessed elsewhere in adland where digitisation and programmatic ad buying has exploded.
However, witnessing the fate of publishers, who have lost so much to the big tech platforms and an army of adtech middlemen during this period, Conti says he does not want OOH to make the same mistakes.
“We’ve tried to learn from these cases,” he says. “OOH is going to be digitised even more in the future, and more buyers will buy programmatically, so it’s absolutely obvious that you have to be prepared for that. You have to approach it in a much more organised and structured way.”
Crucially, Conti says, “if you want to thrive in that [digital] environment then you need a platform.”
Digital growth
Digital OOH in the UK currently delivers 1.6bn weekly viewed impressions, reaching 63% of the UK. JCDecaux currently delivers 46% of those digital impressions each week.
In terms of the UK adspend, Warc predicts OOH adspend (£1,114m in 2017) in the UK will grow by 3.2% for 2018 and 2.6% in 2019 and according to Outsmart in 2018, DOOH will account for 46% of OOH revenue in the UK.
Conti’s mission is to grow those digital figures.
“In a digital economy we know how money is spent – it’s through platforms, machine-to-machine,” he says. “How can you conceive of growing any other way?”
The only issue – and something Mediatel has heard from almost every OOH expert we have spoken with – is that VIOOH, on the surface, doesn’t look very independent. It perhaps doesn’t help that JCDecaux facilitated the launch of the platform from a point of near total secrecy with many of its staff joining the new business.
Yet Conti goes to some length to defend the platform’s integrity.
“VIOOH is its own platform,” he says. “It has its own IP, the tech is ours. We have our own engineers, our own contractors, our own governance. JCDecaux for us is just a VC.”
Conti admits it has been difficult to convince JCDecaux’s competitors to understand this sentiment. Yet he insists they must look at the wider context and at the ecosystem beyond their own.
“The Decaux brothers’ reasoning has been absolutely brilliant because their point is, they are leaders in one very competitive industry, but if the industry doesn’t have the tools and capacity to thrive and compete, they will not be thriving for long.”
To that end, VIOOH wants to aggregate more data-rich media owners to deliver programmatically, in real-time and at “best-in-class” levels.
“Deliver that for media buyers and this industry will continue to thrive in years to come.”
Six months in, how close is Conti to signing up another media owner?
“There’s no confirmation yet, but we’re working towards having the first guys…by mid-next year,” Conti says, declining to name them.
“We need to convince them this is the right solution for the future, forcing them to take an objective and candid look at the platform.”
For those media owners that do use VIOOH – which operates with a SaaS model – they will be charged “a small service fee”, while for transactions via VIOOH Exchange (the supply-side platform) there is a “market level commission” on the sell side only.
Asked if the sales data for each media owner would be fully protected from the eyes of competitors, including JCDecaux, Conti – seeming to anticipate the question – is animated and forthright.
“Listen, we apply the same rules to everyone, including JCDecaux,” he says. “I’ve been very clear about that and the Decaux board has been very supportive,” he says.
[advert position=”left”]
“We are also fully transparent in the market – which means we won’t be taking any commission from the buyers. 100 per cent of the money spent on the media, will be spent on the media.”
Conti refers to the plight of publishers, who have seen 70p in every pound lost to adtech middlemen – meaning only 30% of an advertiser’s budget – in worst case scenarios – has been reaching the working media.
“We can’t recreate the same murky and complex practices that happen elsewhere. We’ve approached this with a lot of knowledge of what has happened in other markets.”
As for the OOH specialists – who handle outdoor planning and buying on behalf of the main media agencies – they will be able to connect via an API which will enable media owners to respond to briefs and requests with “optimised and targeted solutions, faster than ever before.”
When told that some people think VIOOH could disintermediate the specialist business model, Conti dismisses the claim and says simply that as an open tech platform, VIOOH welcomes them into the fold to help develop the wider market.
Looking beyond the trading, could other media owners also take a share in the business?
Conti says yes – but only to those who could “strategically contribute” to the value of the platform.
Global enters the OOH market
When JCDecaux first announced the launch of VIOOH the OOH market in the UK looked quite different to how it looks six months on. Global, the UK’s largest commercial radio business, surprised everyone late in the summer with three acquisitions in the OOH sector – buying Primesight, Outdoor Plus and Exterion.
Together they will form Global Outdoor – not quite as large as JCDecaux, but certainly a major new rival that will hold the lucrative TfL contract in London.
Global also invests heavily in tech, and for its radio business it already has a programmatic buying platform, DAX, which is uses alongside the industry trading platform J-ET.
“Absolutely we want Global to join,” Conti says without hesitation. “Why not? We are open to work with every media owner who wants to thrive in this ecosystem.”
Exterion Media’s TfL contract is worth £150m a year
Yet there is some industry talk of Global going it alone and building its own platform, likely using the resources it already has in place for DAX. Mediatel asked Global where it stands on this issue but was declined an answer.
Conti says either way he does not see Global Outdoor as a threat. “It’s taken us two years to get this far [with VIOOH], and if [if Global wants to create its own platform] they will realise integrating three different businesses with different platforms into one and merging that with its audio programmatic solution is going to be quite a bit of work – and we’d wish them the best of luck with that – but we are obviously very open to have a discussion with them and be creative about how we can help.”
Until then, Conti’s next steps are to focus the first half of 2019 on the European and US markets, while Australia is next on the roadmap.
He will also be spending his time engaging with digital agencies – “evangelising” – so they can understand how they can make the most of digital OOH.
Conti will be speaking at this year’s Automated Trading Debate, hosted by Mediatel. For details, visit the events website.