Last week, radio firm Global acquired both Primesight and Outdoor Plus as it looks to become a major player in the out-of-home space. Media veteran Charlie Makin explains why the landmark deal was a no-brainer.
Ströer are Germany’s third biggest domestic media owner. Historically, it used to be a poster company, but in the last few years, it’s made nearly a hundred acquisitions of other media owners, mainly buying digital assets. It also resells the digital inventory of magazine brands (magazines being a massive medium in Germany,) so advertisers can connect with consumers in specific locations, like a major railway station, using a variety of touchpoints.
The plan is that it can grow a very profitable and sustainable business by integrating multiple media channels. It is deliberately designed to counter the impact of Google and Facebook and the modus operandi is to sell high value, high performance, integrated local assets and data to domestic clients. It is not just selling access; it is selling local expertise and knowledge.
It describes this business model as being ‘Local Heroes’. With deep local knowledge, execution capability and access to multi-channel solutions, it can reach and motivate local audiences which it believes adds to what the multi-national tech giants offer. Its success is evident by its own business performance, delivering revenue growth of nearly 9% in 2017, about double the market growth.
There are obvious parallels with the news of Global Radio’s acquisition of Primesight and Outdoor Plus. The synergies of local radio and out of home are pretty obvious; especially if other, non-audio, digital channels are added to the mix. Local performance is increasingly important for businesses, of which last week’s launch of Jack’s, Tesco’s answer to Aldi and Lidl, is a prime example. At launch, the communication strategy will inevitably be local but it will need to create a new communication model so that it doesn’t cannibalise existing Tesco customers.
Many brands, however, seem to behave like we live in a homogenous society – we don’t, we live in a nation which is deeply divided in many ways, where nearly two-thirds of non-Londoners feel the way they are portrayed in ads just isn’t authentic.
Consumers are wedded to their local communities and brands that underestimate this will fail to maximise their potential. Authenticity is important to many consumers, and this will be enhanced through localism.
The smartness and vision of Global’s move will become clearer. Clients will want better, more accountable local solutions that drive sales, the reason Sky have spent millions developing AdSmart. Suddenly, TV is an option for local advertisers (or national local brands) who were previously unable to afford the medium. This means TV becomes viable for new categories like restaurant and pub chains, universities and other local brands that would have previously been off limits.
Local media has often been dismissed as too difficult and unfashionable, but it’s an area of massive potential. Clients, especially retailers, are under massive pressure to drive performance and need to focus investment on how to drive local traffic. Execution needs to be multi-channel and include point of sale media. Delivering this at scale requires automation, especially of content management systems and there are a number of platforms, like Bitposter, which are enabling this.
Global’s move will not be a one off, but an emerging trend amongst smart, entrepreneurial, domestic media owners - the ‘local heroes’ taking on the global champions.
Charlie Makin is a former Arena Media and Saatchi & Saatchi exec. He is now managing direcor at newly-launched media agency Pintarget.