Out of home advertising had a bumper year in 2011, basking in the glow of the 2011 Rugby World Cup. The bounty didn't last long unfortunately and 2012 saw almost a fifth of outdoor revenue melt away. This year the pickings are better, according to the Outdoor Media Association of New Zealand first quarter revenue was up 16 percent to $15.4 million. And one of the ways brands are using their out of home budgets is on digital signage.
The growth in the outdoor industry is largely being driven by digital media, both ‘place-based’, like shopping malls, oil chains and airports, and large format (while there are already few digital billboards inside airports, APN Outdoor is set to launch its new large-format digital billboard in Auckland in July). In the Asia/Pacific region, ad spend in digital out-of-home has grown 19 percent on average every year from 2006 to 2011 and global spend in the sector last year was $US7 billion, which is forecast to grow almost 20 percent this year.
Ngage Media has been in this game since 2011. And the New Zealand company serves and creates ads for screens across the country, including ones inside Z Energy service stations (230 screens), The Warehouse (373 screens), and Fix convenience stores (24 screens).
In March the company struck a deal with Forsyth Barr Stadium in Dunedin to put its advertising technology in 165 screens, potentially reaching tens of thousands of Scarfies (and other Dunedinites less likely to set fire to furniture).
However, it's Ngage's joint venture in Australia with The Effeciency Group (TEG) that could seal its future in the digital out of home market. The partnership sees Ngage's ad serving capability integrated into TEG kiosks in retailers like Dick Smith, Caltex and Bunnings in Australia. The 50/50 partnership launched Ngage's offices in Melbourne and Sydney, and prompted the creation of a showroom in Brookvale.
Ngage founder Alan Nicholas says Australia was always a major priority for the Kiwi company in order to secure its future in the sector.
"It's harder here in New Zealand with the scale and size, but also the mentality of advertisers. Australia is generally a year ahead of New Zealand in terms of technology, so for instance the work we're doing with Bunnings in Australia may get rolled out in New Zealand 12 months down the track," he says.
Ngage has partnered with another Kiwi company, Born Digital, to bring more interactive elements to its digital signage, such as product search kiosks and digital catalogues. This will also be sold through the TEG partnership.
Nicholas' team in New Zealand is only four strong, which has meant many long hours for the lean startup.
"That's where all the 22-hour days come in. My office is my laptop at a cafe or the airport or in between meetings," he says.
With the TEG deal, Nicholas says some of that weight has been lifted off his team's shoulders. TEG is funding eight staff and the working space dedicated to the joint venture in Australia. The design and production capability of parent company Image Centre Group (which launced Ngage in partnership with Nicholas early last year) has opened up a new pipeline and capability that has been invaluable, says Nicholas.
Asked what Ngage's revenues looks like two years into the company's existence, Nicholas is guarded with the figures. He simply says the business is in good shape.
Ngage's ad serving technology is licensed from US company Aerva, with Ngage the sole provider for the South Pacific. This limits Ngage's capability to grow beyond this region, but Nicholas says this doesn't worry him.
"Aerva [is] quite happy to look at deals in other regions. Also we've always got the opportunity to develop and licence back the IP we've developed from New Zealand back to [it] and other regions. It's all very exciting," he says.
Nicholas says the future of the company is growing its presence in Australia and supporting existing clients in New Zealand.
"It's that story of the little Kiwi company doing big things overseas. We've been doing the hard yards to change the mindset of marketers of how they communicate. We've been printing posters for 100 years, this is a new way of communicating," he says.
Disclosure: Ngage Media is part of the Image Centre Group, which also owns StopPress.