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Why did Transport for London decide to take a
completely different approach when we
tendered the rail contract in 2015?
4
The media world had changed out of all recognition and we needed to change with it.
TfL was still stuck in a world of ;
asset based metrics of measurement
landlord / tenant relationships
non-commercial decision-making
a hands-off approach to advertising
5
Capital investment also was going to be key
And our money is cheaper than any potential
media partner’s!
7
TfL is now a more ambitious
organisation. We must take advantage
of the overlaps with other commercial
activity such as retail, sponsorship and
telecoms.
Our challenge was to appoint a media partner who
understood;
• our commitment to sharing the risk and reward of a
partnership
• the value we can add as a partner in broader
commercial conversations
• our desire for a customer focused asset strategy
while optimising our commercial opportunity.
• the strategic need to utilise our audience insights
and data led ROI metrics to add real value to the
OOH industry
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TfL decided to be hands on and add
value. OOH is not just about Media
Companies and Specialists.
Opportunity for Landlords to change the
dynamic and influence an industry.
If we force Media Companies to play the
same old games, we will see
diminishing returns OOH.
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The pace of change is accelerating the need for flexibility, and relationships that foster innovation
Source: Company Information
1. Digital Out of Home or DOOH refers to digital media used for marketing purposes outside of the home. This excludes TV advertising and radio advertising, but includes digital signage.
The relationship between Franchise Partner and Media Owner has changed beyond recognition,
driven by macro trends
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� The security of a minimum
guaranteed payment
� Shared risk and reward - revenue share model with
higher risk and reward to TfL
� Media partner bears cost of investment in Capex;
payback requirements slants profile to early years of
concession
� TfL funding Capex, and mechanism to invest throughout
life of contract
� ‘Parent-child’ relationship � Genuine partnership, with Partnering Board and working
teams co-located
� Multiple concessions across rail
transport modes
� Integrated concession aggregating London
Underground, London Overground, Crossrail, plus others -
-- delivering ‘London Audience’ across all rail transport
modes
ToFrom
Confrontational and transactional (pre 2012) Fully fledged Partnership (2016)
Which is why we’ve made a massive shift in the way the relationship
drives value
15
Financial structure
� Pure revenue share on gross revenue
� No minimum guarantee or performance bond
� Capex investment deducted from gross revenue
� EM responsible for Opex; Commissions; SG&A, and Direct costs
EM proposal and
commitment
� 5 Capex initiatives totalling £82.5M
� 3 Sales, Marketing and Insights initiatives to support revenue growth
� 3 Partnering initiatives to unlock new opportunities
� Partnership governance structure to facilitate joint decision making
Overview of Structure
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Assets going into the London Underground will re-define the sector
and provide inspiration that advertisers wait
And the deployment model is different
Significant
Market
Event
DOOH Value £
Enhanced targeting and effectiveness (DTE) Target outcome
� Enhanced and bespoke campaign targeting to increase advertisers’ return on investment, e.g.
- Journey based, geo/proximity-based, right-time and contextual targeting
� Essential to remain competitive given ad spend is increasingly migrating to mediums that
demonstrate ROI
Retain, grow
and attract new
ad spend
Audience Sell/packaging Target outcome
� Wholesale shift from selling panels and packs to selling audience impressions, priced in cost-per-
thousand (CPT) terms
� Align pricing/currency to other media to simplify comparability and
purchase and highlight OOH as a competitive alternative to other media
� Gives us flexibility to meet brief in most effective manner
Optimise inventory
and yields
New Routes to Markets Target outcome
� Introduction of automated and platform/exchange-based buying
- Simplifies buying/selling process
- Makes OOH accessible to broader range of clients
- Provides gateway to video ad budgets
- Creates outlet to monetise perishable unsold inventory
Steal share from other
media
Sales, Marketing and Insights initiativesFocus on enhancing ad effectiveness and equipping us to access new budgets (e.g. programmatic and video)
17
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Partnering initiativesCreating a new media channel for London, and a joint co-located TfL-EM team selling as one in the market
New Media Brand Target outcome
� Create the newest, most valuable, contemporary consumer engagement channel
- Transforms and clarifies our collective position in the market
� Begins with a focus on business-to-business; will then evaluate learnings before potentially extending to
business-to-consumer
� Need to ensure brand is flexible to house partnerships with other third parties
The one-stop
shop to engage the
London Audience
Team For London Target outcome
� Physical co-location of Exterion Media and TfL market facing functions…
� …and creation of a single team with an integrated commercial approach
� Team will:
- Create, market and sell an integrated product portfolio spanning media, sponsorship,
experiential, etc
- Offer Brands bespoke solutions
- Launch an innovative investment model: provide start-ups with media space in return for
revenue/equity share
Broader,
long-term,
higher value client
relationships
Data For London Target outcome
� Pooling Exterion Media and TfL data and insight to underpin all commercial initiatives
- Joint Data Forums and proof-of concepts
� Compliment EM investment in campaign targeting and flexible content playout with TfL data to measure
actual audience delivery
Most effective and
accountable media
channel
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Provide
guidance,
challenge and
approvals
Data Forum
Ensure the Partnership is maximising
the value of all internal and external
data sources
Innovation Steering Board
Arm the Partnership with broad
external perspective and view on
innovation, technologies and market
trends
Partnering
Board
Set strategic
direction,
allocate
resources
and empower
Working
Groups
Commercial Innovation Working Group
Maximise advertising revenue and unlock wider
commercial opportunities
Operational Activity Working Group
Oversee the delivery of capital programmes,
provision of services and driving of efficiencies
Technology and Innovation Working Group
Ensure TfL estate is at the forefront of
technological developments for commercial and
consumer gain
Contract Management Team
Ensure compliance to contract and provide
robust reporting
Outlined in Schedule 5 of the Commercial Advertising Partnering Contract
Activities supported by Innovation Landscape Reviews and Strategic Away Days
Partnering structureThe new structure requires joint working and decision making spanning investment, commercial strategy, innovation, and
operations
Additional proposed
Submit
� Capex initiatives
� Annual Business Plan
� Ongoing updates
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The vision is ambitious…We established multiple initiatives with revenue sizing and capex requirements, and demonstrated we were
already progressing the highest value proposition
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We believe in making the
everyday inspirational
We aim to transform ordinary
journeys into extraordinary
experiences
Every journey matters: the
service, the information, the
experience and the environment
Work with ambitious partners
who can help better serve the
customers and optimise the
commercial income for
reinvestment
It’s been a long process to get here, but we’ve created something unique.