Rob Gorrie is CEO of Adcentricity, a digital out-of-home (OOH) ad network.
AdExchanger.com: Why did you decide to get into the out-of-home business? What intrigued you?
RG: When it really comes down to it, I didn’t decide to get into Digital-Out-of-Home; it was never my intent. A couple of years ago we saw a convergence of retail and digital media, and it was really trying to find its place in the media landscape. Brands were also chasing an elusive consumer that was spending less and less time with the same old media. That convergence and early stage of the industry was attractive. I wanted to take digital’s capabilities and targeting and give it a real-world face. It just so happens that the digital in-store and location based media is classified as an Out-of-Home medium.
What problem is Adcentricity trying to solve?
Right now, there are a number of lost souls trying to figure out where DOOH fits in the advertising ecosystem. Ultimately, navigating this landscape is becoming difficult; there are a very wide range of DOOH technologies and the industry itself is fragmented – it’s really difficult for a brand or agency to put together an innovative, complex and impactful DOOH campaign that runs across many platforms.
We are trying to solve this by putting connective tissues in place in an intelligent manner that provides more efficiencies to agencies and brands and more impact for brand messaging.
From your site, Adcentricity offers "strategy, planning, buying and execution." Why do you need to offer all of these as opposed to specializing in one or two? Do you consider yourselves an agency, perhaps?
Adcentricity is not an agency, but rather an ad network. Adcentricity is not in the business of strategy, planning or buying – we leave that up to our agency partners.
What Adcentricity does specialize in is targeting and the acquisition and aggregation of data. As a DOOH ad network, we provide efficiencies and data you can't get directly from a single platform. We also have a vast amount of data on the DOOH space that we can interpret for each campaign, helping to improve overall effectiveness. For example, if an advertiser was hoping to reach 24-35 year olds in LA with an income of over 80K that spends $250 a month on a Verizon smartphone and watches Glee, then we can work to pull the right locations within our ad network that would reach that very specific target audience. Our platform also helps our partners to target these locations in a much shorter time frame than more traditional methods and can be used in conjunction with an agency’s consumer and shopper insights platforms to identify the best consumer story to tell across platforms or network categories.
Given some of the other marketing channels out there, do you see an opportunity together with mobile or online video campaigns, for example? How do you approach being a part of cross-channel buys?
Absolutely. At Adcentricity, we continually seek out and try to understand other mediums and agency tactics that dovetail with our medium DOOH. There are a phenomenal amount of symbiotic relationships between mobile, location-based, online, video and social media depending on agency's campaign objectives. Digital OOH can not only integrate with and support existing digital, mobile and social tactics & initiatives but also extends a digital tactic to the real world and actually engages consumers with that tactic in real time – for example offering today’s Groupon deal in Atlanta in Pediatrician offices for the Atlanta Zoo or discounts on insurance which you can get by texting in or downloading the Groupon mobile app. Or showing Pepsi’s Refresh Project for a community and comments from local citizens about how to support it and get involved.
Understanding what brands and agencies are doing across digital channels allows us to better target and implement into their cross channel strategies and campaigns. DOOH is really a supporting actor within campaigns – we see other mediums getting the lead actor role. But, DOOH can certainly make an impact in that supportive role as long as the work is not done in isolation. We spend an enormous amount of time with agency strategy and planning groups to make sure we're on target not only in reaching the right consumer but also in integration with existing strategies and helping them understand where DOOH can make the most impact.
There are some other players out there aggregating OOH or DOOH inventory. How do you differentiate?
First, OOH and DOOH are two very different mediums; with OOH you can buy space on a transit shelter or billboard. Consumers see these mediums as they are driving or walking by, but there really is no room for interaction. DOOH is very different because it’s all digital, and it’s not just a headless inventory buy. With DOOH, we’re going to see the medium become fully connected within a couple of years, which will allow brands to converse in near real-time with their customers – static billboards and other OOH vehicles can’t do this.
There are three different types of players trying to make targeting and use of the DOOH medium easier. Companies like Adcentricity that are ad networks, and work very closely with agencies with ad targeting. Ad networks really can provide agencies and brands with the data they need to target specific audiences – it’s not just about demographics, dayparts and and “buying platforms”. There are also aggregators that take inventory from multiple DOOH networks, giving brands and agencies a packaged up buy. The third is ad exchanges, which like aggregators, package up inventory from multiple networks but facilitate a “trading platform”. The issue with some of these approaches is that there really is not enough space or activity to support the industry. We’re going to see some consolidation of DOOH players in the coming years.
Adcentricity differentiates itself by providing the most comprehensive targeting data and methods in the industry. We work very closely with agencies to help them target the audience that makes the most sense for their clients, providing metrics along the way to back up each targeting recommendation; and we can easily work to integrate DOOH with mobile and online executions.
In your previous "life" working for an ad network, what has been relevant to the DOOH space from the ad network model?
I actually worked for a digital agency that used ad networks, but did not work for one until we started Adcentricity. However, I have watched online ad networks grow up over the last few years, and what has fascinated me are the linkages with retail history and seeing digital and retail/in-store marketing alive. With having deep experience in this area, seeing the needs and being able to apply the retail/in-store experience with the ad network space was really the relevant link to the space.
How does Adcentricity make money? Can you share any client trends whether revenues, deal size, verticals, geos, etc?
Adcentricity has a number of partnerships with network clients, which is where our revenue comes from. We’re up over 100% in our revenue figures over 2009.
We’re seeing interest from companies in the automotive, financial and retail sectors growing, and have had good campaigns with brands like P&G, Toyota, GM, Verizon, AMEX and Mentos. Most of the brands in these verticals are returning to the space within six months to spend again, and often the spend grows; it’s a good sign for the medium as some sustainability is being built around use of the networks.
In terms of how we make money, we are paid by the networks for our services and you can work with us for exactly the same rates and such as with the networks themselves.
Is there or will there be a tipping point for DOOH?
I think we’ll reach a tipping point when DOOH starts to demonstrate efficacy or ROI; but it won’t be all at once, rather on a vertical by vertical basis.
This is really because brands use their own metrics to measure each campaign – for example, Mentos would measure differently than AMEX or GM. Unlike the Internet, DOOH really does not have one universal metric, so it’s going to take some time.
There are other factors that are prohibiting us reaching that tipping point. Compliance is a huge issue - we're watching this closely. Scale continues to be a problem; brands are spending in tiny chunks - doing four week program that is highly successful, but then might not come back for a year. For the medium to be widely adopted, we need sustainability from the agency and brand communities, which has been elusive. We are going to have to put forward a defined focus industry by industry to get sustained spending in DOOH.
Regarding funding, how are you funded? Any plans to tap the private or public markets?
While our own revenue growth has been exciting, we are privately funded and VC-backed. It’s very likely that we will return to capital markets in early 2011 in some form in early 2011 to accelerate our growth both domestically and internationally, as we are looking to obtain a Series B round in the coming year.
A year from now, what milestones would you like Adcentricity to have achieved?
I’d love to see Adcentricity continue on its leadership path, and be mentioned as one of the companies that really has put DOOH on the map with both brands and consumers. We also want to continue our revenue growth – our goal is to again double our revenue year over year. We’re on quick growth trajectory, so we want to close a series B round of at least $6M. We’re looking to launch a number of new game-changing products in DOOH medium, and will make strides to become the go-to source for consumer & shopper data as it applies to Digital OOH to help make medium more effective.