Gail Chiasson, North American Editor
This month, we welcome Sebastien Obregón, Gerente General, Enmedio Comunicación Digital S.A., Bogota, Colombia
I believe that you were founded in Medellin as a new company owned by El Colombiano, the leading newspaper in Colombia, but recently moved to new headquarters in Bogota. What prompted that move? Does El Colombiano still own 100% of the company, or, if not, who are the other owners.
Enmedio was founded in Medellin, in February, 2006, by three young entrepreneurs: myself as CEO; Daniel Pelaez as CFO & COO; and Sebastian Molina as CCO. Four years later, in 2010, we received venture capital from El Colombiano Media Group, which is Colombia’s second largest newspaper, so that we could grow our business. Since then, the three co-founders – who still work at enmedio – own 40% of the company and El Colombiano owns 60%. We moved our headquarters in Q4 2009 because in Colombia, the advertising business is very centralized in Bogota.
- You have networks in airports, supermarkets, bars and restaurants, malls, clinics and hospitals, fitness clubs, elite hotels, salons and spas, corporate businesses and universities. In the U.S., there’s a movement towards concentration in one or several verticals and consolidation. Do you have much competition?
Enmedio has nine DOOH Networks which are, in order of importance and revenues: Office Buildings, Shopping Centers, Hospitals, Bars and Restaurants, Fitness Clubs, Beauty Saloon and Spas, Hotels, Universities and one Airport (Cali´s Airport). All these networks, except for the Airport, are in Colombia’s five major cities: Bogota, Medellin, Cali, Barranquilla and Bucaramanga.
I personally think that Enmedio´s success is due to having a national and multi-DOOH network platform because we build packages and attract big advertisers. We also think there are groups of advertisers for each of our networks.
In 2009 to 2011, there used to be a lot of competition (more than 50 companies) but today I would say that, aside from Enmedio, eight serious companies remain.
In order of size, they are: Exito TV (supermarkets), Publik (digital billboards), Air Media (airlines), OnTV (public buses), Efectimedios (traditional OOH company starting to go digital in airports and shopping centers), Marketmedios (traditional OOH company also moving into digital in airports and shopping centers), T-Activa (supermarkets), Pixel Media (shopping centers).
- Please tell us about the digital out-of-home situation in Colombia.
In Colombia, the DOOH industry is still very small. We have a country were there is an oligopoly where only three media companies control 85% of all the advertising budget which is approximately USD 2.2 billion. These companies are all concentrated in traditional media outlets like TV, radio and newspapers. So there is only about 15% of the advertising budget to distribute in magazines, Internet, OOH, DOOH and other alternate media.
OOH has about 7% of the ad budget which is approximately USD 165 million.
Then, I estimate DOOH’s 2012 total revenues to have been only USD 6.5 million. This would only represent 4% of the OOH market and a mere 0,3% of the total ad market in Colombia.
In 2011, we saw a 100% spectacular growth of the industry, but then in 2012. DOOH´s growth was only approximately 10%, due to the shutting down of many companies as the natural process of industry consolidation. Also, 2012 was not a good year for advertising in general in our country. Enmedio´s revenues for 2012 were USD 2.28 million, up only 17% from 2011.
Transit has decreased since the largest Taxi DOOH Network shut down last year. Retail also decreased as Exito´s Network decreased.
- What are some of the problems you see for DOOH?
The problems of why DOOH is so hard to sell and why it is taking so long are:
•Traditional media is still very strong;
•Media Brokers are not our allies because we don’t make them any money;
•The lack of proof of the effectiveness of this new media.Another interesting fact is that Colombia is very rigid in regulation for the deployment of Digital OOH billboards. We have all been trying to deploy this big format in the streets, but it’s been very hard to convince the regulators which want to have an advertising clear atmosphere in the streets. I only count about 30 digital billboards in the whole country.
- In all countries, as their DOOH industry matures, there is a request from advertisers for various types of measurement. What all does Enmedio use?
In Colombia, Enmedio is the only one concerned in using some type of metric. In the past, we have done Mass Surveys with many marketing intelligence companies, but this year we are deploying something more serious. We are the first to deploy Intel’s AIM (Face Recognition Software) and have signed an alliance with IPSOS to be the one to audit these metrics and send them to media brokers and our advertisers.
We are installing AIM Kits, in about 10% of our network so we can at least have something to give our advertisers for them to believe more in us. We have also always done something that we believe to have been successful and that is to take pictures of each ad, in each venue, and share these with our advertisers in the cloud. If a client is advertising on 1,000 screens, he will get the 1,000 photos within a week as a proof of play.
- You seem to have many of the top global advertisers as clients. Who is Enmedio’s oldest client?
Our oldest client is Bavaria (SabMiller) and I think this is because our first DOOH Network was Bars and Restaurants which has always been very strategic for Bavaria.
- And who are some of your biggest clients? And your biggest Colombia-based client?
There have been, particularly, three industries which have taken us very seriously during our seven years. The Automobile industry is actually the strongest, then the Retail industry, and then the Telecommunications industry, especially with mobile phone brands.
Last year, our biggest clients were: Olimpica (retail-supermarkets), Mazda (automotive), Claro (mobile phones), Sura (insurance) and Renault (automotive). Of the above, Olimpica and Sura are 100% Colombian companies. We are starting to see more mass products advertise, such as Coca Cola, which, for the first time in our history, is coming in strongly this year.
- On your web site, you mention something called ‘Life Pattern Marketing’. Could you explain what you mean by this in some detail?
What we mean by this, is that we are engaging audiences in their everyday activities when they go to work, to the gym, to study, to shop, to dine, to party, to travel, to take care of themselves etc.
But we are doing so with products or brands that actually matter and are relevant to them in that specific time, place, occasion, moment, mood and activity. This means for example: Beer in Bars, Shampoo in Beauty Salons, Sport Beverages in Gyms, Airlines in Hotels, Insurance and financial services in Office Buildings, Fashion in Shopping Centers and so forth.
- It also seems as if you offer a complete turnkey solution, all the way from consultation and exploration of sites right down to installation, service and client reports. Whose software do you use? And for screens?
Yes, we look for the locations, negotiate them, install the hardware and then we go searching for advertisers. We have all our hardware custom made for us in China and for the screens that we have online, we use BroadSign as our digital signage software.
- You have your own production studio for animations. What percentage of your clients use it? Can you mention a couple of specific animations that have been specifically popular from both a viewer and sales results point of view?
Yes, this came naturally since the beginning when we saw that a major obstacle was that advertisers did not have commercials or animations to use in our screens. When they quoted production with their ad agencies, it was more expensive to produce than to advertise with us. So we started with something simple and gave it for free as a right for being one of our advertisers.
Today we have a team of 14 people dedicated to this and I would say about 40% of our clients use it even if it’s only for minor adaptations to something they already have. We have become very good in production for the automotive brands which have actually used them in national TV and South American cable TV stations such as ESPN and FOX Sports. Some of these examples are Chevrolet, Mazda, Ford and Yamaha.
We strongly feel that a normal TV commercial does not work in DOOH. We think that the more it is customized to the DOOH ad network, the more effective a campaign will be.
- I notice that clients can rent multiple formats for special short term events such as trade shows, promotional events, exhibitions, etc.. Does this mean you keep a certain number of different size screens on hand just for that? Can you tell us about that side of your business?
Last year, we grew from just being a DOOH media company to being more a Digital Signage Services Company with multiple business units. We did this because DOOH growth has been slower than we expected and because we have seen great new opportunities using the same platform we already have. Today we have four business units, three of which are new. They are all, in my opinion, sub industries of the Digital Signage Industry as a whole:
Enmedio DOOH Networks: Which you know and I have already talked about.Enmedio Institutional:
This new business unit consists in installing and operating a full digital signage system for companies for corporate communications. Here the business is different because we don’t sell advertising. We charge a monthly fee for the service which includes the hardware, software, content production, content management and technical assistance and maintenance of the private digital signage channels.We started in mid-2012 and, to date, we have nine clients for whom we operate more than 214 screens in more than 126 locations in14 cities of Colombia. Our major client here is Citibank with 100 screens in all of its branches and offices in Colombia. Amongst others, we also operate this service for CocaCola and Dupont.
Enmedio Digital BTL (Below the Line):
Enmedio is also helping customers with BTL marketing activities but mostly based in digital signage technologies. We offer a wide range of hardware for rent but more than that, we offer the complete package or solution starting from the idea to the execution. Products and services include: 19” to 65” displays, Indoor digital posters, outdoor digital posters, touch screens and their respective applications,3d displays with no glasses, videowalls with interactive applications, gesture interactive technology, integration with social networks, interaction via smartphones, and trans lucid LCD applications amongst others.Enmedio Content:
It’s a transversal business unit for the above three. We are starting to charge for content production. - In total, how many networks and how many screens do you currently have in total? Do you manage most of them remotely from a central location? Or are most locally managed?
Installed, in total, 1,803 screens in 942 locations.
Enmedio DOOH has 1,589 screens in 816 venues, including:
212 Bars and Restaurants with 405 screens.
192 Office Buildings with 256 screens.
173 Beauty Saloons with 257 screens.
83 Fitness Clubs with 161 screens.
62 Hotels with 105 screens.
55 Hospitals with 100 screens.
21 Shopping Centers with 232 screens.
17 Universities with 71 screens.
1 Airport with 2 screens. - I notice that you offer 2D and 3D, interactive touch and multi-touch, gesture, custom-made furniture, videowalls, practically everything that’s up-to-date in the industry. How much do you and your staff travel to trade shows and/or conferences to keep you up-to-date? Can you name a couple that have been especially helpful in the development of Enmedio?
As pioneers and leaders of the industry in Colombia, we strongly feel we have to be the ones to be one step ahead and have a unit of R & D constantly working in innovation. Since 2006, we have been going to China every two years to visit specific providers and trade shows and we have been going to the Digital Signage Expo for five consecutive years.
- Can you tell us about the biggest installation you have ever done? And the most exciting or avant-garde?
At Enmedio DOOH Network: In Shopping Centers, we have been installing large format 55” digital posters, multiple videowall formats and interactive touch maps developed in-house. Its all top of the line with revolutionary designs, powerful i5Players, Intel AIM, amongst other things.
At Enmedio Institutional: By far, our biggest challenge and project has been Citibank. Within 2 months we installed more than 100 multi-format screens in 86 locations in 14 cities in Colombia.
- I believe that you have offices and installations in Medellin, Cali, Barranquilla and possibly Bucaramanga as well as Bogota. Does that cover the main cities of Colombia? Do you have plans for further expansion in or beyond Colombia? What is your expansion strategy?
We have direct offices with employees in Bogota, Medellin, Cali, Bucaramanga and Barranquilla which are Colombia’s mayor cities. We operate our DOOH networks only in the above but since we launched Enmedio institutional, we have installed screens which we remotely operate in other nine secondary cities of Colombia: Cartagena, Pereira, Manizales, Cucuta, Pasto, Neiva, Villavicencio, Ibagué and Pasto. For now we don’t have plans to go internationally as we feel we still have a lot of consolidation to do with what we have today.
- Are any of your network clients using Near Field Communications? Why or why not? What are your thoughts on the role it will play in the industry?
Unfortunately, we have not used NFC in DOOH or Institutional, but we have done so in our BTL business where customers have been willing to pay for these types of applications. I think that as we evolve and the buyers of our multiple products mature and better understand all these technologies, it will certainly play an important role.
- I didn’t notice anything on your web site about mobile and social media and their connection with or use by your clients. What role do they play in Colombia at the moment?
Same answer as the last question.
- Please forecast for us how you see the development of DOOH in Colombia and in South America over the next two years.
I cannot talk much about South America as I only sort of know the market in Colombia and Brazil. In Colombia, as I have mentioned, it has been hard and slow for DOOH and I don’t expect it to suddenly explode in any given moment in the next two years. I think it will be a slow process and that perhaps in five-to-10 years, it will be a lot more relevant when many things will have changed: traditional media will have lost audiences and effectiveness; there will be a new generation of marketing managers and media buyers who will not be scared of pulling apart from traditional media; digital signage’s hardware prices will have dramatically gone down; our culture will have become a more digital one; and there will be a lot more complementary technology and at reasonable costs.
In Brazil the case will be the same only that they will do it at a much faster pace than us.
But what I think will be the aspect that mostly drives growth in the DOOH industry not only in Colombia or Latin America, but the in the entire world, will be that conventional OOH companies will simply evolve to DOOH. Already having the real estate, with time, they will just simply replace their static ad surfaces with digital signage displays which will come in all sizes and flavors. This is what we are starting to see now with giants like JCDecaux and Clear Channel. As they are today’s largest OOH companies, they will certainly be the largest DOOH companies in the future, extending their global presence even more intensely thanks to technology.
Enmedio Institutional has 214 screen in 126 locations.
As of today, we also have about 50 special formats to use for our Digital BTL business unit.
About 30% of our screens are centrally managed from our headquarters but the others are still locally and manually managed.
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