How Exterion Media plans to turn TfL into a media powerhouse that rivals Facebook and ITV

Rather than compete with other traditional out-of-home (OOH) players like JCDecaux, Exterion Media will push Transport for London (TFL) as a media owner to rival the likes of ITV and Facebook following its revamped commercial raison d'être. Key to realising this ambition is its planned programmatic offering – dubbed Exterion Saxon – an offering it hopes to bring to market in 2017.

The bold claim was made by Shaun Gregory, chief executive for the media sales house, who is adamant that its work with TfL is anything but another play for outdoor budgets.

The ambition

Instead, he believes the public body could generate £3.4bn in commercial revenue by 2023, claiming it could be “something that’s bigger than ITV”. Yet underneath the bravado, lies an ambitious attempt to distance TfL from an outdoor category that’s not always viewed as the most progressive quarter of the industry.

“I think we’ve probably done more in the last two years, particularly under new ownership than the rest of the out of home sector put together,” said Gregory. “I know that’s a bold statement to make but I believe it, just look at the way we use data now.”

The means

Powered by data from 25 million O2 customers, the recalibrated offer promises advertisers and agencies the ability to target one audience across more than 400 stations for the first time.

How this happens is an advertiser creates a profile of the audience-type it wants to reach, which Exterion’s Audience Behavioural Insights (ABI) tool then uses to identify that group across TfL’s network.

The method

At the heart of it is how the tool is overlaying data mined from the turnstiles at each tube station, spliced with data from contactless card data alongside other third parties – a far cry from the “assumptive” planning that limits most outdoor plans, argued Gregory.

That Exterion felt it had to build its own planning tool leaves little to the imagination regarding its view of Route, the industry-funded OOH research body, that has a reach of “probably around 2,000 people on the underground”.

Alternative to Route

With ABI advertisers “can look at eight or 10 stations that reach their specific audience … that’s a completely different way of doing things in OOH. We’re mining an audience based of tens of millions,” he enthused.

“If you look at the online world, most revenue is getting hoovered up by Facebook and Google and then you have the big TV players. That competitive angle has almost been taken out of the market. I think we’re providing something new and fresh that can inject some much-needed competition in the market,” said Gregory.

As bold as it may be for TfL, the overhaul belies just how much it has changed over the last year to chase the same accounts as those media behemoths it hopes to rival one day. Large screens now sit where there hordes of smaller displays at stations, while new formats and a mix of next generation digital escalator panels have also been introduced.

“I don’t see our sales team competing with JCDecaux,” explained Gregory. “They might do similar things to us, but in my mind the competition are the big players in TV and online.”

Consequently, Exterion and TfL will still position ad packages as way to cost-effectively reach audiences. However, creative-led and audience-led ad serving will grow as the environment becomes more sophisticated in terms of quality and audience.

This takes a lead from the rest of the industry, which has reappraised many assets by virtue of location and audience (and a migration to digital that results in fewer sites, bigger impact and greater flexibility),” explained Nick Mawditt, director of insight and marketing at outdoor advertising agency Talon Outdoor.

"With data at the heart of the sell, this environment will be a powerful proposition in the evolving landscape of Out of Home…. More advertisers will be able to exploit flexible buying, better targeting and greater technology interaction, including joining up how people use their mobiles to engage and activate Out of Home opportunities. We would expect to see a rise in brand count (with more flexible and data-led planning options available) as well as advertisers choosing the environment on the basis of quality and real time messaging reaching a hugely desirable audience."

Programmatic OOH ambitions

One way it will hope to close the gap is by tapping into online budgets, particularly those currently being invested with outfits claiming to offer ‘programmatic’. It won’t be ready to do so until next year but Exterion is developing its own proprietary platform – dubbed Saxon – that will automate trading between the buy- and sell-sides and pave the way for it to develop APIs and open to trading desks.

With the automation comes the risk of ad misplacement, though Gregory assured there is already a plan in place. Similar to how all creative is currently approved, copy going into the programmatic system will go through an automated version, that will “check everything”.

Gregory went on to add: “In my mind we have a big responsibility [in outdoor advertising] because if you take a magazine or TV programme past the watershed then it reaches a certain audience.

“When someone sees an OOH ad they could be two-year-old, or a 21-year-old. We must take that very seriously and in a programmatic world I think we’re in good shape to deal with that.”

To that point, Matt Teeman, managing director of Primesight, thinks it’s “encouraging to see the media partnership between Exterion and TfL taking shape, as the investment stagnated somewhat while the contract was under tender review”.

“The great performance of digital in OOH shows that advertisers - looking for flexible, powerful methods to deliver their message - recognise the campaign exposure that the medium can offer brands. In particular, given that online advertising landscape has been recently mired in confidence and transparency issues, we know that our growing medium will continue to attract spending,” heads.

Ambitions to rival Facebook and Google

Like with other media owners, Exterion and TfL’s success hinges on their collective ability to prove their value at a time when Facebook, Google and Twitter dominate media plans alongside TV. All three online players are set to outpace the average growth of the UK digital advertising in 2016, according to eMarketer,

“People over-complicate this business,” opined Gregory. “It’s very simple; you need to provide advertisers, agencies and specialists with all the right information to a granular level and then secondly you need to make it easier for them to buy.”

As seen on The Drum.