The merger of APN Outdoor and Ooh Media is being driven by a need to invest more money in data and technology to compete with the global technology giants and other media players for a larger slice of the advertising pie.
Ooh Media chief executive Brendon Cook, who will take the reins of the combined entity if it is rubber stamped by the competition watchdog, tells AdNews the merger is less about cornering the outdoor market and more about helping outdoor futureproof and extend its 5.3% share of advertising spend to 8% and more.
“We are competing in an ad market today that has a lot of global players. Very cashed up and profitable technology players,” Cook said.
“You've got to look ahead to what the market might look like in three years time. From our point of view we see the strength of putting this together will be important to ensuring the businesses can compete against big global players and in a very technology advanced world.
“The data that we are going to continue to need is going to be significantly more expensive than anything the industry has ever incurred in research to date.”
Google is one technology giant that is starting to dip its toes into outdoor with investments in London and New York.
But it's not just direct competitors that pose a threat. Cook points out that advances in mobile technology allow advertisers to connect with consumers on location and are a direct threat to out of home advertising revenues.
“Mobile is clearly becoming all encompassing in more ways than straight advertising,” he added. “We have to be able to keep the advances up in our product and technology, our data suites and systems to world leading levels.”
Advances in outdoor advertising automation and the use of data to help advertisers target consumers at the right time will become critical for outdoor companies to compete in the future.
Cook says the combined financial muscle of APN and Ooh allows the businesses to invest more into developing these critical areas.
“There's a massive amount of work around technology and data that is occurring and be escalated and elevated within the industry sector,” he said.
The merged entity creates a $1.6 billion outdoor media empire that would control about 55% of the outdoor market.
The network will have more than 70,000 advertising panels including 9,000 digital. It covers roadside billboard, the only format where there is cross-over, retail, offices, rail, transport, airports and other venues.
The combination is forecast to deliver $20 million is cost synergies.
It now awaits approval from the ACCC before the merger process can begin. Cook said he would bring in brand consultants to determine whether the companies adopt a single brand or continue as they are.
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