John Laramie is CEO of ADstruc, an out-of-home advertising platform.
AdExchanger.com: What gave you the idea for ADstruc and addressing the out-of-home, billboard world, if you will?
JL: After graduating from Loyola University Maryland in 2006, I took off for New York City and landed a job at a brand licensing agency, The Beanstalk Group. Although licensing interested me and I gained great experience launching consumer product brands and managing a $400M retail program, I wanted to work on my own. In 2007, I started my first “side project,” the JFL Group, which was a consulting firm focused on grass-roots brand building. With that, I helped build the brand Naked Ping Pong, now known as SPiN New York, and I also became involved in an outdoor advertising campaign targeted specifically to telephone kiosks outside of Bed Bath & Beyond stores in New York. I found out that there wasn’t a place online to look up the kiosk locations, so I rode my bike around the city and wrote down notes. And then, instantly, I knew there needed to be a central marketplace whereby buyers and sellers could meet.
What problem is ADstruc solving?
The current process of buying and selling outdoor advertising is extremely inefficient and is one of the only ad mediums left that is not operating online. The outdoor advertising industry is similar to the real estate and travel industries 10-15 years ago. ADstruc solves the antiquated, fragmented, and expensive process of outdoor advertising by bringing it online, connecting buyers and sellers, and providing them with the tools they need to do their job faster and more efficient. Plus, one of the greatest advantages of ADstruc is that we make it easy for first time buyers to get involved in outdoor advertising.
Why hasn't this been before, do you think?
There is a right time for everything. It has been tried but we think the approach, product, and timing wasn’t right. Being in TechStars has greatly helped us make sure we are hitting each one of those aspects. We have a strong competitive advantage and are leveraging our technology to be the leader.
Can you give us a sense of scale to the Out-Of-Home advertising business?
Outdoor Advertising generated revenues of $5.9B in the U.S. for 2009 according to the OAAA and Kantar Media and is projected to grow 5-6% in 2010 (according to Morgan Stanley Research and Barclays Capital Research). Worldwide estimates are approximately $24B +.
What's your strategy around data? It would seem the marketplace will capture a ton of useful data.
We love data and are really excited about the opportunities to leverage it. We are working with our partners on providing them with real time data and analytics. Each user will have a dashboard providing current and historical data across multiple data points. Ultimately, this information will be returned into the system for our buyers and sellers to make better-informed decisions.
What's ADstruc's target market for inventory? And on the buy side?
First, we are targeting the 3 major categories: billboards, street furniture and transit. Alternative, such as stadium advertising, is our fourth target market, and we will look to expand our focus there in the coming months. Today, we have a growing presence across the U.S. On the buy side, we are currently working with local, regional and national media buying agencies and are far along in talks with major ad agencies. Additionally, because there is a definite social and viral aspect to ADstruc, we have growing interest from first time buyers because they are realizing how easy and inexpensive it can be to buy this way. We look forward to driving this new business to our clients.
What does your competitive set look like? Could digital-out-of-home systems disintermediate your marketplace?
Digital out-of-home (OOH) systems are great and are bringing efficiencies to the expanding digital side of the business. We see an opportunity to integrate with them through APIs to provide agencies with multiple cross platform buys. This would be a major improvement in the outdoor advertising community. Since ADstruc is spread across several ad mediums, we believe it will be more effective for our users if we can bring everything under our umbrella.
How does ADstruc address creative? How is this different than the way it currently is for the out-of-home industry?
The last parts of the buy process typically seem to be the hardest logistically; the process from finding/buying space to designing creative to print, ship, install, and then ultimately remove the campaign can be time intensive. Fortunately for us, we have partnered with the world’s largest out-of-home print company, Circle Graphics, to enable our users to execute campaigns in one place. Buyers will be able to submit their creative through the site and get it printed and shipped by Circle. Also, for our clients, we will offer a list of preferred vendors for installation, maintenance and removal.
Can you provide a use case for the auction works for the seller?
Sellers have access to a portfolio of tools to help them manage and sell OOH inventory like never before. We provide them with online tools to manage their inventory in real time, in rich media format, with report writing and proposal generation capabilities. Unbelievably, the majority of the industry uses Microsoft Excel to manage their business. By managing their inventory online, ADstruc provides sellers with two options to post their inventory. First, the ADstruc Marketplace, whereby sellers can post their inventory in an auction or listing format and greatly benefit by reducing their excessive amounts of remnant inventory, driving liquidity, and meeting new buyers. Sellers receive emails when a buyer has purchased, placed a bid, or made an offer, and are able to accept, decline, or counter offer. The second way is in their own privately branded marketplace. Here they can grant access to specific buyers as well as receive additional requests for access. Buyers then have the visibility and access to inventory across the private and public marketplace and are able to build campaigns with multiple units from ADstruc’s various sellers.
Where does ADstruc make money? Do you charge for listings, get a percentage of transactions, etc.?
We don’t charge for listings. Our primary revenue stream is as a transaction processor – specifically, we make money when our sellers do. ADstruc charges a minimal transaction fee when the inventory sells through the ADstruc Marketplace. We are also honing in on several other revenue streams to be capitalized on.
How do you address billing?
We are looking at ways to integrate with the existing billing systems. Ideally, we will bring it all in house and grab this last step of the process.
What's your future plans around funding? Is that a focus for your upcoming appearance at TechStars in Boulder this August?
We are really excited about the funding opportunities ahead and are focused on it as we head into Investor Day.
We are officially launching on August 5th at TechStars Investor/Demo Day. TechStars has been an incredible program and provided us with valuable connections, insight and access to the start-up community.