Danoo Acquires IdeaCast
Manolo Almagro, Q Division Managing Partner
The folks at Danoo have been making some very provocative moves this year. Here’s the past 6 months in review, in January 2009, they scored a major partnership deal with Trophie adding Airports to their roster of coffee shop and deli venues – In Februrary -they released the astonishing effectiveness results from that partnership. Then in June, Danoo releases the details from what seems to be a very successful mobile marketing campaign.
In today’s press release – Danoo announces the acquisition of the Chicago based DOOH company- IdeaCast. formerly owned by National CineMedia (NCM). -In June 2007, NCM dropped $7 Million on IdeaCast and followed it up in May 2009 by aquiring 100% of IdeaCast’s senior secured debt as mentioned in their Q1 2009 earnings call transcript. If you read it carefully, NCM drops some hints on its future plans for restructuring and selling this business unit.
The Danoo acquisition expands their network footprint in some interesting ways.
- Expands Danoo’s reach into 1000 healthclubs and 7800 airline seatback LCD screens, (JetBlue, Continental, Frontier)
- Provides IdeaCast’s advertisers access to the Danoo/Trophie Airport Networks in addition to Danoo’s coffee-shop and deli locations.
The new Danoo corporate entity will continue to operate and sell advertising across its digital media networks under both the Danoo and IdeaCast brands. Sounds good on paper, but I foresee a few imminent challenges on the horizon for our good friends at Danoo.
Firstly, cross-selling ads on several disparate networks will add a few magnitudes of complexity and require some additional content customization. Simply put, someone watching an ad the screen, while running on a treadmill needs to be “spoken to” in a vastly different way than someone sitting, cramped – in the middle seat on an airplane. Single brand message customized for different contexts.
Secondly, operation and corporate culture may be a bit more complicated for Danoo when they try to manage a single digital campaign across two very different (almost opposing) distribution strategies, On one hand you have Danoo’s nimble, real-time, flexible and cost-effective, IP-based, hyper-targeted platform, on the other hand, you have IdeaCast’s traditional satellite broadcast-based distribution model.
These issues that face Danoo aren’t new, in fact, Adcentricity and SeeSaw Networks have been dealing with this type of stuff for quite a while, on a much larger scale. Perhaps Danoo may want to sneak a peek at from these larger network aggregators playbooks?
Danoo’s M&A activity provides yet another example of the “era of consolidation” that the industry psychics have been predicting, for sure this is definitely a sign of the times.
July 6th, 2009 at 16:19 @722
While I agree with your assessment that the over-arching management team of the combined entity will have to work on streamlining the organizations for the greatest cohesiveness and efficiency, I think that there are a number of synergies that can be realized in operating networks with alternate content strategies and audience objectives.
There is no dispute that Ideacast’s health club network is very different from Danoo’s networks in cafes and coffee houses. But, in the same way that large media conglomerates manage diverse properties (i.e. Time Warner – TBS, TNT, Cartoon Network; Gannett – local and national newspapers, digital properties, etc.) and share best practices across each, so too will a combined Danoo and Ideacast organization identify and take advantage of content, advertising sales, and managment efficiencies that benefit all of the networks within the company’s fold.
There will certainly be a learning curve in determining the best way to operate the combined company, but once that phase is completed, I think there is great potential for Danoo & Ideacast to drive the entire industry to a higher level.
July 11th, 2009 at 18:48 @825
This will be interesting. What I have heard is that it is actually a rollup from an ownership structure – a combined NCM and Kleiner PErkins investment entity. If so, with backing and a couple more networks it could really be something. Otherwise it’s still pretty small stuff wrt what is really needed in scale to drive buying from agencies in force. The nasty secret in our industry right now is that no one is really getting enough advertising in their core DOOH business for large enough returns on capital in the U.S.