The nation’s biggest out-of-home media companies are refusing to list and sell their inventory in Starcom’s new out-of-home database planning and buying system created by DOmedia. It’s not only the big traditional outdoor companies that are pushing back, but also some of the largest place-based out-of-home media companies. The rub is DOmedia’s 2 percent to 5 percent transaction fee tacked on to sales made through the system, a fee the media companies find unpalatable.
DOmedia, which has built a database of OOH companies, is one of several “aggregators” that have popped up to bring some order to the hundreds of small, placed-based digital out-of-home companies. Though there’s been some consolidation, the place-based out-of-home business is still a nightmare for advertisers and agencies to buy.
The biggest out-of-home agency shops, Kinetic and Posterscope, developed their own proprietary systems to handle the planning and buying of the media. In the past couple of weeks, Starcom and MediaVest’s planning and strategy teams have begun using DOmedia’s platform.
“It’s the bazillion alternative out-of-home and digital media companies we want to get a handle on,” said Jack Sullivan, svp, out of home media for Starcom. “Trying to do it with just spread sheets has become too difficult.”
While the digital out-of-home companies agree with that such systems can help advance their medium, they don’t agree with DOmedia’s model.
“We agree with the concept. The question is who bears the cost,” said Mike DiFranza, president and general manager of Captivate. “It’s tough for people to rationalize paying for a database sorting tool. We have to work together to figure out the right mode.”
Even tougher will be convincing the traditional media companies, which have national reach, to put what put premium inventory in the system.
“To take our inventory and combine it with rogue operators discredits what we do,” said one out-of-home media exec, who declined attribution.
“Our policy is we don’t pay commissions,” said Tommy Teepell, chief marketing officer for Lamar Advertising. “I’m not sure it adds value to what we’re doing.”
Rich Langdale, CEO of DOmedia said it’s all about convincing out-of-home companies that DOmedia will bring more dollars to the medium. “We won’t charge more than the value we bring. We want to help the sellers sell more media,” he said.
Sullivan is hopeful the rest of the business will come around. “It’s always tough at the beginning,” said Sullivan. “After only a couple of weeks, a lot of companies have registered, a good 80 percent of them. Negotiations and discussions are ongoing with others.”
DOmedia is about to get some competition. In January, Ayuda Media Systems, a software provider to the out-of-home industry that provides proof of performance, will launch Symphony, a free buying platform for both traditional and digital out-of-home. As part of the service, Ayuda has offered to customize its system for agencies. Ayuda’s current client roster includes some of the biggest out of home media companies such as CBS Outdoor, Van Wagner Communications and EYE Corp.
“Ayuda’s model is a win-win for everybody,” DiFranza said.