CEO Spotlight: Jorg Cieslok, Cieslok Media, Toronto
This month, we welcome Jorg Cieslok, president and CEO, Cieslok Media, Toronto, Canada.
Cieslok Media has a varied out-of-home and digital out-of-home inventory. How many of your screens are digital? And in Toronto’s Dundas Square, where you own 80% of the inventory, how much of that is digital? Any conversion plans?
Our legacy inventory has been in and around the Toronto Market since 1990 and consists of various OOH media formats, such as wallscapes, ground signs and rooftop signage, be it a tri-vision, such as our domination at Yonge and Bloor, or static faces throughout the city. All of these locations are best known for their high impact at major intersections, high visibility, and larger than life executions.
As it relates to Dundas Square, we have held media in the square for well over 10 years now, including one of the first full motion digital LED screens located atop the Hard Rock Café. We are about to enter contract year three for Canada’s largest signage development, which we refer to as 10 Dundas, on the north side of the square. This location currently features a 40’x60’ digital screen. We are in discussions with the property owners to convert two of the existing static faces into digital, which would then increase our total screen availability to seven, including our latest development at Yonge and Gerrard, which is located at the very entrance of the Yonge and Dundas special signage district.
- We first met you over 20 years ago when you were a relatively new immigrant from Germany and, if I remember correctly, were in the process of launching advertising banners. What were your expectations then, compared to now?
At that time, I was 23 years old and needed a job. I stumbled upon the outdoor advertising industry and immediately fell in love with it. I had no experience and my only worry was to make a living and survive the recession at the time. I was not aware of my surroundings. I had nothing to lose and everything to gain. Fast forwarding 25 years later, clearly a lot has happened between then and now. My experience spans between the US and Canada and encompasses many OOH media products.
I feel fortunate that I have been given the opportunity to be engaged in, and could develop DOOH from the very onset, bringing this most exciting OOH opportunity to life for our customers.
- Cieslok Media is very concentrated in Toronto, with a few screens in Montreal, Edmonton and Vancouver. What are your plans for expansion? And what impediments are holding you back?
Toronto is clearly our key market and we do not expect to outgrow our Toronto dominance in any other US or Canadian city. We have been operating in Montreal, Vancouver, and Edmonton for just over one year now. Considering this very short time frame, I am extremely pleased with our overall experience and success in each of these markets.
We have implemented Business Development teams across all major Canadian markets and our development pipeline is very strong. For the remainder of 2014, we will be installing a minimum of eight additional digital screens. We do not feel that there are any impediments that hold us back on our growth. I only believe in challenges that must be overcome. We have the right team in place to do just that, and are actively pursuing the #1 position in the Canadian Digital Outdoor market.
- You have worked with many types of outdoor media in your career. What made you decide to concentrate on large format boards and screens?
When I first started out, we were hand painting murals. I always had an admiration for the creative and artistic execution of a hand-painted advertisement. There was only one other company that painted murals at the time, so the competition was limited but the knowledge about the medium was almost nonexistent, which was a great challenge in itself.
Simply said, basic billboards are not interesting. They don’t stand out, are a mass product, and cheapen industry standards. We have been combining large format and LED screens, which the Canadian market in general is not used to, unlike our neighbors in the US. With that said, our strategy and focus on large format, in my opinion, is a perfect combination of our experience with the medium and digital technology, which is destined to become the premium digital billboard category in Canada.
- You bought the Titan Canada inventory. Are you looking for investment dollars to help your growth? Why or why not?
We have great financial support from our private equity partner, the Clairvest Group. Clairvest was founded in 1987 and is a Toronto-based private equity management firm with approximately $1.2 billion of equity capital under management. They have an underlying philosophy of partnership; they succeed when we succeed. Clairvest is the perfect partner for us and are committed to our growth and we will not require any additional outside funding.
- How do you handle advertising sales: in house or through which company?
All of our media sales is handled in house. We have a hand selected sales team, which is supported by our sales and marketing administrators. All of our sales professionals are highly experienced and specialize in selling large scale static and digital OOH media formats. I personally take great pride in training and teaching through my own experiences over the past 25 years and participate in many presentations with my individual sales leads.
- How do you integrate mobile with your offerings? Do you use partners? How often do your advertisers ask for mobile inclusion?
Over the past two years, we have worked very hard to build a standalone profit center for mobile media. With Cieslok Media, you can integrate a mobile campaign with the OOH, or simply purchase mobile on its own merit. Our geo-fencing and hyper local targeting capabilities have proven to be technologies we use to differentiate ourselves from the many very basic ‘vanilla’ Real-Time Bidding network buys we find in both online and mobile today.
We have multiple partners in the US, who provide us RTB impressions, based on strategies we develop in house for our clients. The inclusion of mobile is at the very forefront of every single media pitch we develop. At times, we receive requests for mobile only, which now gives us the opportunity to speak to a different audience within the advertising agency, the digital planning and strategy teams. Being able to communicate with a digital team broadens our ability to educate on all of our offerings.
- I see mobile integration a lot with street posters and in buildings, but how do you integrate it with large format billboards and screens? Can you give an example?
We have the capability to integrate short-code messaging via a call to action on our digital boards and deliver user generated content directly to our digital network across Canada. A basic example would be a call to action that prompts viewers to text 123456, the message is reviewed, filtered and distributed across our network in virtually real time.
- I see that you also offer such things as floor and window graphics, column wraps, etc.. Do you use partners for these or do you have an in-house department that handles them?
We operate one location where we offer window graphics, column wraps, or floor graphics, which is the interior of one of our Yonge and Dundas real estate holdings. The multi-floor levels within the building are sold as dominations, which include the aforementioned media formats in addition to 15 interior digital screens. All of our print production is outsourced to various vendors across the US and Canada.
- What types of social media such as Twitter, Facebook, etc., have you integrated into your offerings? Can you give us a couple of examples?
We have a robust offering when it comes to social integration with our boards. Our capabilities in this area really set us apart from our competition. We have a technology which gives us the ability to pull in, filter, review and distribute to our digital boards, seamlessly, social feeds from any social platform. Whether it’s Facebook, Twitter, Instagram etc., the platform is able to pull content from all social forms and display it in a look and feel that matches your brand. The filtering automatically removes obscenities, etc., via a white list and black list developed by a combination of default words (i.e. profanity) and client-driven words. The filtering will also remove variations of black-listed words.
Another offering we have is the ability to add in algorithms to display certain content.
For example, Winners ran a campaign where it had specific creative which was to be displayed, based on the weather conditions outside. The algorithms allow us to enter a variable range into our software, ie. If today’s weather equals 21 degrees, play this creative. The program reads the algorithm and automatically displays the relevant creative.
Other uses of social integration would be our live streaming video and photo capabilities, specific to our Yonge & Dundas video screens. We can stream, in real time, video footage or still images of an event happening in either the immediate vicinity or across the country.
- Today, advertisers and agencies are asking not only for proof of performance but analytics that involve things like gender, dwell time, real-time and more. What measurement tools do you use?
This is definitely something that the industry is hearing more and more about. Agencies are not simply after reach and frequency anymore, they are looking for targeted buys, with strategic planning behind them to reach their target audience. This, for us, is something that we have been pushing for in order to evolve the industry’s way of thinking.
We have a number of tools and resources which we reference in order to provide clients and agencies with the demographically relevant information they are after. We have a unique mapping tool internally which we are able to plot our inventory and layer in some of the information clients are after, such as market concentration or age brackets, in order to identify the locations that are best suited for their campaign. The data itself is sourced from several providers; some comes from municipal, provincial or federal data, Neilsen, OAAA/Tab or COMB, etc., along with a number of other resources.
Our marketing department is always searching for relevant studies and statistics and examining new opportunities to expand our internal research, which inevitably expands that of our agencies and clients.
- It seems that in Canada, when you mention digital, people only think of online. What do you think has to be done in Canada to make people more aware of DOOH?
This is very true. Unfortunately, the Canadian market has not been exposed to DOOH in mass, like the US or Europe. While our country is very large, the Canadian population of approximately 35 million is very small, considering Toronto is now North America’s fourth largest city, ahead of Chicago, but still receives nowhere near the same advertising budgets by brand, which, if that was the case, would sustain faster digital growth.
In totality, Canadians only consider six markets to be of national media buying interest to clients. In reality, only three markets end up making the list and if budgets get cut, the likelihood of only Toronto being considered for OOH is high.
Our company advocates DOOH on a daily basis because DOOH is at the very forefront of our growth strategy. I cannot speak for my competitors, but I am of the opinion that unless standard 10’x20’ billboards are being removed and replaced by digital boards at a minimum of a 5:1 ratio, our competition will cannibalize their very own revenue generating opportunities. The awareness of DOOH will continue to advance on its own merit as the industry altogether is moving more towards higher quality boards.
What I mean by that is, building a digital board comes with a high capital expense in comparison to a standard billboard of the same size. With that said, we must be prudent about how we invest our dollars and therefore will only build on locations offering the greatest visibility, the highest traffic and in combination with that, the appropriate market distribution in each location we enter or continue to grow. This strategy, unlike a billboard GRP development strategy, will allow us to create a premium national digital network.
- Do you have your own creative department? Who mainly uses it?
Yes, we have an in house marketing department, which is led by our Marketing Director and two additional staff on the creative and research side. This department works closely with the sales team to identify creative solutions for our clients, to assist with building out creative for campaigns if necessary and also to provide the most relevant research on our media format.
The agencies use our in house creative personnel to brainstorm ideas for RFPs, unique executions and to be a point of contact for their creative agencies when building specialized OOH creative. Local clients and client direct business often rely on our in house department to produce their campaign creative in its entirety.
- You’ve worked in Chicago heading Titan there. Do you find that agencies see and/or buy DOOH differently in Canada versus the U.S. Please explain.
My time in Chicago allowed me to help build a digital network on various stations throughout the Chicago loop. This experience and the knowledge I gained in pitching a brand new opportunity to advertising agencies across the US, has given me a lot of positive insights into DOOH and how it was perceived and integrated among static media at that time.
In Canada, OOH buying specialists do not exist. I believe that there is a real market and need for specialists in Canada who will bring in depth OOH buying experience and perspective to the Canadian market, and with that help to increase OOH market share.
- Why do you think that, with all the tech and innovation hubs in Canada, there are relatively few making strides in Canada with DOOH? And why do we see so few companies at the big trade shows and conferences where they can see and learn about new developments? Even the Dx3Canada gives short shrift to the DOOH sector. Your thoughts?
Over the past decade, the outdoor market in Canada has been dictated by as few as three major companies. DOOH has a relatively strong presence in Canada outside of billboard networks. The reason for this is that growth is limited, due to challenging municipal bylaws.
Innovation in DOOH within the billboard category is driven by software developers and LED manufacturers. Innovation does not coincide with commonly available indoor LCD products. Many tradeshows cater specifically to a retail environment that is not feasible for outdoor viewing.
The OAAA Tradeshow in Orlando this year was, in my opinion, a great success, well attended, and gave tremendous insight into the various types of LED technologies developed by a number of manufacturers from Canada and the US. These tradeshows are a valuable tool to better understand the direction digital technology will take in the future.
- I believe that you attended the OAAA show in Orlando recently. What thoughts and ideas did you take away from it?
I have enjoyed the OAAA show over the past six years and also was present this year in Orlando. For me personally, it is a great time to catch up with my friends from the US, meet new partners, and source new opportunities. Staying on top of OOH development in the US is important to me. I follow many countries around the world, as I never know what ideas we may be able to bring to Canada that will help us advance our many offerings.
I recently returned from China, where I spent some very valuable time with one of our suppliers. I had the opportunity to gain insights into the technology that drives our LED boards.
- Are you open to acquisitions? Or being acquired? If you were acquiring, for what type of companies or services would interest you?
We are open to making acquisitions and are consistently looking at opportunities to acquire. As a matter of fact, we are in the process of closing our first acquisition since the inception of Cieslok Media in September, 2013.
The companies we look to acquire would have to meet specific criteria to be in line with media formats in our sweet spot, including digital media.
- From what I have seen CODACAN, which seemed to be the trade group for the Canadian DOOH industry isn’t very (or at all) active. Do you think an organization is needed? Why or why not?
This is a really good question. It appears that CODACAN markets itself as the DOOH Industry Association for place-based digital media. Cieslok Media is not a member nor have we been approached by CODACAN. I would, however, agree that an organization is needed which represents outdoor digital media. Such an organization should be active in helping to lobby the positive attributes DOOH brings to the market place.
Historically, it has been challenging for the outdoor industry to work together as a unified body. I will always be open to, and embrace working with members of the industry to further the growth of DOOH, as together we are stronger and more efficient together, than alone.
- How much cannibalization are you seeing in Canada by DOOH screens taking over OOH boards? And in your own company?
This goes back to what I touched on briefly earlier. I believe that the outdoor industry in general is oversaturated. There are too many billboards, street furniture, transit media opportunities, and others available across the country. Holding rate on inventory and not undermining the quality of OOH media is not exactly a negotiation technique most of our industry partners are employing.
Municipalities across the country look at outdoor in a negative light, unless the municipalities can profit themselves. For our industry to grow in digital OOH and to make our financial projections work, digital outdoor needs to be maintained as a premium product. Quality over quantity, fewer amounts of advertising faces, and better locations must outweigh reach frequency programs from the past.
As for Cieslok Media, we are not in a position and never will be to remove non-performing billboards to gain performing digital boards. Our company, unlike other leading OOH providers, will not cannibalize existing inventory, as we do not have an overabundance of under-performing inventory available to trade up to.
- Where do you forecast Cieslok Media being by the end of 2015?
If you had asked me, “Where would Cieslok Media be within the next five years”, I would have said, “The third largest outdoor operator in Canada.”
Currently, the gap between ourselves and the third spot is too great to achieve by the end of 2015. My belief, though, is that by the end of 2015, our company will grow to at least a $40 million annual sales organization, which represents approximately half of the revenue of the #3 spot. Beyond 2015, I do foresee doubling my company from that position.
Categories: CEO SPOTLIGHT
