Leasing Billboard Space for Wireless Connectivity: OOH's Unexplored Frontier

The typical locations of billboards and other OOH advertising structures include major thoroughfares city centers and other hightraffic areas amp160all of which coincide with locations in which wireless communications companies are eager to boost signals for their customers amp160With the advent of quotsmall cellquot technology radio access nodes so named due to their small size relative to the larger macrocells commonly attached to cell towers wireless communications companies are able to boost connectivity in areas where signals have traditionally been weak amp160Wireless companies need space to host this technology billboards and transit shelters offer a perfect host for enhancing cellular reception amp160For OOH companies leasing space for smallcell technology on these assets could represent a significant costminimal revenue streamHistorically cellular companies have exhibited reluctance toward using billboards as hosts due to issues like structural capacity and a lack of interest from OOH companies in offering the space amp160As wireless technology has matured however small cell nodes are now compact enough to fit on traditional billboard sites amp160and as a result OOH companies have begun to more thoroughlyamp160consider the optionMajor OOH operators including Outfront Media Clear Channel Outdoor and JCDecaux have all signed deals in recent years with wireless infrastructure companies to manage these attachment opportunities amp160Outfront Media signed an agreement with Diamond Communications in July 2015 to market the company39s leased and owned assets and assist in leasing billboards and other assets to wireless carriers amp160Clear Channel Outdoor teamed with Vertical Bridge Holdings in September 2015 giving Vertical Bridge exclusive rights to antenna and small cell deployment across CCO America39s footprint amp160JCDecaux has been exploring the opportunity in a big way with a number of wireless contracts signed globally amp160In 2014 it signed a 15year contract with Verifone to deploy small cells on its street furniture assets across 12 countries in Europe amp160an agreement that came on the heels of a successful pilot project conducted in Amsterdam where over 160 small cells were installed on the operator39s bus shelters In January 2016 the company signed a multiyear agreement with Verizon Wireless to deploy Verizon39s 4G LTE small cells across its street furniture assets in the USA amp160And just this month it signed a 10year agreement with Vivo to deploy small cells on its street furniture assets in Brazil amp160Additional contracts spanning from Italy to Spain to Panama have also been inkedPrivacy ConcernsUsers that connect to small cell wireless networks may be exposing their identity and location to the telcos that control small cell technology Because of the narrower range of small cell technology location data from the use of a cell can place a user in a very precise location amp160Although some consumers may welcome this as an acceptable tradeoff to receiving improved connectivity in a place previously bereft of it it may bother others unwilling or unprepared to forgo privacy for better service amp160For telecom carrier companies the data is invaluable companies could begin monetizing it to subsidize the buildout of the technology and rents paid to OOH companies amp160It is worth noting that if collected such data would likely be aggregated and anonymized amp160For this reason we do not see concern over potential infringement on individual user privacy as a stumbling block to widespread implementation of small cell technologyA Still Untapped Opportunity While the opportunity for OOH media operators to provide billboard structure space shows promise the process of leasing space is still in its early stages amp160In an August 2016 earnings call Outfront Media CFO Donald Shassian noted quotIt39s fair to say right now that the income that39s hitting our revenue numbers is somewhat de minimisquot amp160He went on to report that the company was working with multiple tenants on master license agreements with wireless carriers and cable tenantsOutfront CEO Jeremy Male echoed this statement at a Goldman Sachs event in September 2016amp160amp160quotRight now the dollars are relatively small and the interest is relatively highquot he said amp160However he did allude to future profitability amp160quotWe think this is a 50 EBITDA businessquot Male told attendeesAs smart phone proliferation continues domestically and abroad and wireless connectivity becomes even more integral to daily life we expect that wireless companies will look increasingly to leasing space on billboards in order to meet consumer demands for enhanced cell serviceThis column was written byamp160Mark Boidman Partneramp160Ben Zinder Associate Director andamp160Christian Bermel Lead Analyst ofamp160PJ Solomon39s Marketing Services GroupThis article was originally published at MediaVillage July 12 2017Click the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Leasing Billboard Space for Wireless Connectivity: OOH's Unexplored Frontier

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Leasing Billboard Space for Wireless Connectivity: OOH's Unexplored Frontier

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