Signs of the Times
John Laramie regularly bikes around Manhattan, but in 2008, he briefly wished for a car. One of his small brand-consulting agency's first clients wanted to buy outdoor advertising near Bed Bath & Beyond stores, so Laramie was forced to spend hours pedaling from one store to another, cataloguing the nearest billboards and scrutinizing them for any hint that might identify their owners. Then he contacted dozens of billboard companies, which drowned him in massive documents and pricing spreadsheets.
"I had no idea how that system worked," he says. "The whole messy and horrifically fragmented industry was run on Excel and PDFs."
Laramie's solution was to launch ADstruc, a web-based exchange where advertisers and billboard owners can hook up without the need for messy document swaps and epic location-scouting. As he learned, it was something the $7 billion "out of home" advertising industry desperately needed. According to Laramie, about 30 percent of billboard inventory in the U.S. sits blank each month, losing billions in revenue.
While advertising agencies know how to reach national billboard titans like CBS, Lamar and Clear Channel, Laramie found a huge pool of local advertisers who had no clue how to get their message on the building down the street, and a pool of smaller, regional billboard owners struggling to attract national buyers.
"Let's say a national brand wants to target all the ballparks in the nation," Laramie says. "But what if a mom-and-pop company owns the 10 signs on the way to the stadium in Arizona? A New York agency is never going to find those guys. With ADstruc, they can drill down on all the billboards in all the cities with stadiums, no matter who owns them."
Since launching ADstruc in 2010, Laramie has lured 700 of the country's outdoor advertisers to sign on. He hopes to have the rest locked in by the end of 2012--that's when he'll move from billboard matchmaking to a full-fledged industry shake-up. "We'll eventually have a totally transparent marketplace where companies post their inventory and pricing. Then advertisers can rent billboards with a single click," he says.
It took Laramie three years to convince Baton Rouge, La.-based Lamar Advertising, which manages 155,000 outdoor ad units across the country, to sign on. He says there has been resistance from sales departments at other companies, which face being laid off by online shopping carts.
But Sergio Fernández de Córdova--who recently sold his interest in billboard-advertising company Fuel Outdoor, operator of 4,000 units in nine states--thinks it's something the industry will just have to deal with. "There are a lot of old dogs in this industry, and change scares most operators, because it means replacing bodies," he says. "But I think ADstruc is way ahead of its time and has a brilliant business model. In the future you won't need Clear Channel and CBS and Fuel Outdoor. You'll just need ADstruc. They're onto something very big."