Outdoor furniture advertiser Adshel is expanding to a full-service outdoor media firm to fill the void left by the sale of APN Outdoor by its parent company APN.
The $60m sale of the last 50 per cent of APN Outdoor to a private equity firm in December makes Adshel the only remaining out-of-home advertising company left on APN’s books, unleashing it to pursue other niches with renewed vigour.
Chief executive Rob Atkinson says the departure of APN Outdoor gives Adshel more attention, focus and support from its parent company.
“We now have a closer relationship and more access to APN, we always wanted more attention and now we have,” he says.
“It allows us to have a more open mind and pursue markets outside our current expertise. We are ambitious and want to accelerate our growth.”
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Atkinson says the company now has no limits and where feasible will at least consider just about anything on a per-tender basis to give the best result for clients, whatever that entails.
The expansion starts with an exclusive contract for advertising in the concourses and platforms of the Sydney Trains network.
As with other outdoor heavyweights, one of the company’s major diversification efforts is to develop a digital portfolio, which it only began offering in April.
Adshel has put about 200 digital panels on the 51 Sydney train stations, including 11 major stations that are now digital-only, and has begun installing digital advertising panels in 7/11 convenience stores around Australia – one of the country’s fastest-growing retailers.
It is also expanding its outdoor furniture advertising to include wraps of transport shelters, digital screens and augmented reality integration.
Atkinson says though its digital coverage is expanding and is a rapid growth area for the business, it is still less than 10 per cent of its business and only makes up 200 of Adshel’s more than 16,000 sites.
He says print is at the core of Adshel’s business and its print suppliers – The Print Centre, GSP, Clegg Media, Visualcom, and Direct Image – will still have plenty of work.
“Digital is the fastest-growing part of out-of-home, but we want to expand both print and digital – print is still the best way for advertisers to get the best reach and frequency,” he says.
“There is always going to be a place for print. We have to use digital in the right way in areas of high consumer dwelling and with good potential for interaction.
“Mediums need to be used in their fullest way and there are a lot of places where digital isn’t worth it, you need to have a good mix of products.”
Atkinson says the convergence of print, digital, interactivity, online, and social media is a focus going forward as the company offers a wider product range and can create multi-channel campaigns.
He plans to couple it with real-time data research and programmatic ad buying on digital assets, and that ad agencies are already interested.
“We have grown up on being disruptive and being first to new things, and we will continue that tradition,” he says.
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Adshel had seen two years of record growth, increasing EBITDA by 14 per cent to $40.2m and revenue five per cent to $149.3m for FY2013, but erased those gains with a five per cent drop in revenue and 19 per cent hit to EBITA for the 2014 half-year report (APN reports by calendar year).
However, APN chief executive Michael Miller says this was because of rental payments associated with the Sydney Trains contract beginning several months before the rollout.
“However, this has resulted in good digital revenue growth; with strong advertising spending towards the end of the half,” he says.
“Consistent improvements in bookings since the launch of the network have generated positive momentum into H2.”
Atkinson too thinks things are heading in the right direction and the company is ‘looking at a good year’ with a ‘smooth transition’ into diversified operations.
“We are growing our revenue and resources and we have had a very good couple of months,” he says.
He says Adshel has insourced much of its operations this year and added 90-100 staff over the past 12 months.
“We have gone after quality people too, like oOh! Media’s Mike Tyquin becoming our new chief operations officer,” he says.
“The people we have employed are from diversified experience backgrounds to help us do more things, and it has already had a positive effect.”
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