Looking for Scale, Digital-Out-of-Home Industry Consolidates

National CineMedia Takes Stake in Danoo

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NEW YORK (AdAge.com) -- As the digital-out-of-home industry works to come up with better metrics for advertisers, the more challenging issue is scale. Of the dozens of companies that specialize in place-based media, only a handful, including National CineMedia, Premier Retail Networks and Walmart's in-store network, can be considered national.

The newly merged Danoo will reach an average of 30 million consumers a month.
The newly merged Danoo will reach an average of 30 million consumers a month.
It's fitting, then, that National CineMedia is behind one of the largest acquisitions the digital-out-of-home-media industry has seen yet. The cinema rep company, along with venture-capital firm Kleiner Perkins Caufield & Byers, has taken a minority interest in the newly merged Danoo, a company that combines digital-out-of-home players Danoo and Ideacast.

Danoo CEO Aileen Lee will continue as CEO of the new company, and Ideacast's Jason Brown will head ad sales. The company will reach an average of 30 million consumers a month by combining Danoo's network of 850 coffee shops and cafes with Ideacast's network of airlines and health clubs. Each network will keep its respective brand name.

For the relatively young Danoo, a company founded in 2006 that just opened ad sales in fall 2008, "getting scale was always critical, as the reach of your footprint and the impact is critical to marketers -- especially in today's world, where people have less resources and the category has a lot of fragmentation," Ms. Lee said. "To be able to reach a lot of consistent audiences has always been our vision."

For media buyers, the new company presents the opportunity for a scaleable alternative where they can place marketers' TV and digital dollars. Annette Cerbone, Universal McCann's senior VP-director of national TV and radio, said the new firm fills another need. "We want someone to create a daypart for us. We don't want to have to go to so many different services to get that done. There are so many consumers that are upscale and educated and on the go, so the opportunity to service them better is very appealing."

Danoo has some competition in the rapidly expanding place-based-media market, most principally from Zoom, a company that has acquired several midsize health-and-wellness digital signage platforms in the past year, including the Wellness Health Education Network and ClubCom, totaling more than 1,350 digital venues in the U.S.

Aileen Lee
Aileen Lee
Outcast is another recent digital-out-of-home acquisition, combining gas-station-based networks Fuelcast and AdtekMedia's PumpTop TV to create a network that comprises 12,600 screens and 15 of the nation's top markets, totaling 20 million monthly impressions. Outcast CEO Matthew Stoudt recently told Ad Age the merger made sense for the two similarly structured companies, particularly for advertisers who assumed each company already sold the other's inventory in key markets. "They literally said, 'Why don't you just do this together?'" he said. "This enabled both companies to focus on our core competencies and build our sales and marketing together."

Universal McCann's Ms. Cerbone said she welcomes the continued entrance of newer, bigger players. "Competition's a beautiful thing. The more we can go to one or two or three different sellers and have them compete for pricing makes it easier for us. With downsizing on the agency side and reduction in fees, there's fewer people on our side to get things done too."

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