Advertising is hard - and a lot of companies, from startups to majors, have found out the expensive way that creating and running a screen network that's funded through booked ad spots is no walk in the park.
There are lots of programmatic advertising options out there to make access to brand advertising easier for network operators, but a start-up called Screenverse is going down a different path - basically saying to a lot of companies that have screens: "You focus on what you're truly good at, and we'll take over the ad sales and management of your network."
So in the same way that some solutions providers are the outsourced digital signage operating units for companies like QSR chains, Screenverse is doing the sales and related work for companies that happen to have a screen network as part of much larger businesses.
A great example would be TouchTunes, which has 1,000s of digital jukeboxes in bars, with screens on them that support booked advertising. Screenverse now runs and sells the ad display side of the business, so TouchTunes can focus on what it is super-good at - music content curation, licensing and overall ops.
The company was started by a couple of guys I have known for a long time in this industry - David Weinfeld and Adam Malone. While less than two years old, started just in time for a pandemic and nuclear winter for out of home advertising, Screenverse is making money and recently announced a quasi acquisition deal to bring on the sales experience and business ties of The Danaher Group, a boutique media sales run by Sue Danaher, who many industry people will know from her days running the DPAA.
David and I go back to the days when we were consulting partners on The Preset Group. It was terrific to catch up, and get a better understanding of how his company fills what is a pretty obvious need in the market for companies that want to monetize the screens in their network, but struggle (or would struggle) trying to run ad sales and media operations within the walls of a company that otherwise knows very little about advertising.
David, thank you for joining me. It's been a while since we've caught up. The first thing I wanted to ask is what you've been up to? Cause we've known each other for more than a dozen years and you've done a few things lately and then got into starting Screenverse.
David Weinfeld: Yeah, absolutely.
So prior to starting Screenverse, I had been working in different startups, largely in the digital, out-of-home, and digital signage space. Most immediately, I was at Vistar Media leading their global supply-side sales team, and that was an incredible experience, really being able to see across the whole of the landscape, building out their enterprise software business that included their ad server and player software and building that out and enterprise relationships with companies like Top Golf, RedBox, etc.
But even as I was doing that and playing on a lot of the experience that I had in the industry, even dating back to our days at the Preset group, understanding that there continued to be this prevalence of networks that at their core weren't media businesses, and so they might've had thousands of screens in grocery or Walmart stores or in office buildings, but really weren't in a position to maximize the revenue that they could generate.
They were seeing success by connecting to an exchange like Vistar, but I just saw so much more potential in the way in which they could monetize those assets, and as I started seeing that, I really got the idea for this vision of the business, Screenverse, playing on my time, working with you at the Preset group, consulting to major display manufacturers like Samsung and LG and others, but then really looking at the networks that I most enjoyed working with were networks that were just entirely new to the media side of the business, and as you and I both know, and most people listening to the podcast, there are so many stories that we can tell of the digital out-of-home networks that have come and gone. The skeletons of past networks that otherwise you would've thought, there's a foundation for success here, and sometimes it's the expectation of, if you build it, they will come, and the advertiser is just going to knock on our door, and what I've since learned is that's obviously not the case, and programmatic, there does open that door to a degree and create some of that opportunity, but really Screenverses exist to really blast that door wide open on behalf of our network partners, and so when I left Vistar pre-COVID, it was with a very clear vision of the business that I wanted to start.
I was lucky enough to found the business with another great industry professional in Adam Malone, a friend who I've known for over 10 years, and in doing so, we built up a company whose entire focus is on ad management and monetization for digital screen networks and really taking networks like Pursuant Health and there are 4,600 screens in Walmart stores nationwide. Our partners at Corner Media, Touch Tunes, Touch Source, Paramount, Smartify, Spin, and others, and really being able to best package and position their inventory, no matter however a brand or agency wants to transact against it, whether that be through a direct IO or by way of a programmatic channel.
If you had to do your elevator pitch, the 25 words or less of what all that you do, what would you say?
David Weinfeld: Yeah, I would say that we turn our network operators' side business, which is bringing third-party advertising through their screens, to our main business.
So that includes everything from ad operations, media packaging, CPM management, optimization of deal flow and management of their inventory, both through the direct and programmatic channels, in such a way that's going to maximize the revenue that they see from agencies, brands, and demand-side platforms. There are some analogous companies in the digital space. Some of those companies are Inc.’s 5,000 fastest-growing companies in 2019. There’s a comany by the name of Freestar, who I really admire the way that they've grown and built their business.
Cafe Media, Adpushup, are all examples of companies that exist to really demystify for publishers and companies, how to maximize their revenue generation and take advantage of existing technology. So we're not trying to reinvent the wheel. We're most certainly not trying to be a supply-side platform. But our goal is to be the best possible service layer, leveraging technologies like a Vistar or Place Exchange and others, and being able to build lightweight technology on top of that, whose entire purpose is to realize greater revenue and greater efficiencies in the sales and ad management process.
So you've got companies who have screens associated with their business, for whatever reason, like during waiting rooms or in Touch Tunes that have digital jukeboxes that also have screens that you can sell ads on, but it's not their core business so effectively they can outsource all of that to you, to people who understand the game, understand the process and everything else, instead of trying to understand that internally and be a skunkworks and a business that spends 98% of its time on other matters, right?
David Weinfeld: That's exactly right, and what I've seen historically is that it's very hard for those types of businesses to hire really strong and capable media salespeople, and for good reason, because they're not media businesses, and so they ultimately are challenged from the outset, whereas it's much better and actually a lot less costly and creates a lot more opportunity and potential against their inventory to bring in a company like Screenverse where that's our entire focus.
I really like to think about companies and their capabilities. What can you be the best in the world? What is your superpower? Well, our superpower is monetizing digital screens in the physical world, and so if we have companies like Touch Tunes who are incredible in building out distributor relationships and building out the largest footprint of digital jukeboxes in the US and globally, or a company like Pursuant Health, who has kiosks in every single Walmart store nationwide for blood pressure, BMI assessments, and other major health assessments. That's what they're best at in the world, so let us manage the media business and the media side, and especially as programmatic becomes an increasingly important part of the digital out-of-home landscape, understanding the nuances of that channel and how best to navigate different SSPs and DSPs, agencies and the way in which they're transacting, whether direct or programmatic becomes really important. And it ensures that their inventory is getting in front of the right buyers and that they're seeing the greatest value from their inventory and by packaging partners together, we're able to create some really unique audience segments, such that, by itself, a network might not have the scale to get the attention of a major brand, like Starbucks or Unilever, but together complemented with other assets and other inventory, it tells a complete story.
So a digital out-of-home network, in something like let's say waiting rooms or whatever, they could do direct sales themselves, but they're going to have to hire people to do that. They could get a rep shop, but they rep all kinds of things that might not even be digital, or they could think that they could just use programmatic, but the reality is programmatic isn't going to fill their inventory.
So you need to have this hybrid and you either do it internally, or you go to somebody like your company, right?
David Weinfeld: That's exactly right, and there are a lot of companies who really media or being ad supported is their core focus. So you have companies like Doctor's offices, patient points, or you have companies in gyms, Zoom media, right? Those are not our target partners because they already have in-house sales teams and the entire business is built on how do I monetize those assets? But we really look at companies that otherwise might be in similar environments.
So we have a partner in a company called Touch Source that is one of the largest providers of office building directories and screens and major healthcare offices to the tune of 10,000 screens nationwide, whose superpower is building out these great solutions and interactive experiences and managing tenant databases and directory user experiences, but there is an advertising opportunity there, and one that in order for them to hire an in-house sales team and think through all the nuances of how they marry that against their existing business, is we formed a partnership with Touch Source, such that we can really manage and own that and act as a consultative partner, and we certainly work together to strategically think about which screens within their overall portfolio of 10,000 make the most sense to bring third-party advertising to, and we're not recommending or saying that, “Hey, our expectation is to light up advertising on all 10,000” but we are in the process and we're at a hundred buildings today, but our expectation is to be in the not too distant future at a thousand buildings, where you're talking about is a network that has multi-million dollar media sales potential in a post-COVID environment, and one that otherwise would have struggled to access those dollars, even by just connecting to programmatic pipes like a Vistar Media or Place Exchange.
You still need people, even though it's technology-based and there are automated workflows, you still need people to manage these systems and there are still relationships at the core of the transactions that happen, and so that's really what we say, there's an opportunity to connect to an exchange and gather low-level dollars but you understand CPM, you understand the dynamics of the demand and supply within the ecosystem and what the competitive landscape looks like, and all of a sudden we became not just a cost center to our business, but we realized success in partnership with our network operators, such that it hopefully is an easy decision for them to work with us.
Yeah, it's been interesting to listen to this because I admittedly didn't fully understand what Screenverse did, but now I do, and one of the reasons I understand it is I've lived it. Years and years ago, I started a network in the pedestrian corridor system underneath downtown Toronto. There's like miles and miles of walkways with retail down there and everything, and hundreds of thousands of people. Great media environment, in a lot of ways, but this is 2003-2004, and people didn't get it. So I needed professional salespeople to do that for me, and I tried doing partnerships with companies who were already digital out-of-home, and while they understood the pattern and everything else, they just weren't fully invested in it because they had their own product to sell, and at the end of a meeting, they went, “Oh, by the way, we have this thing too. I'm not quite sure what it is, but are you interested? No? Okay. Bye.”
It just didn't work. You need somebody who's focused.
David Weinfeld: Absolutely. It's really where opportunity meets execution.
And the understanding and we're entering an environment and thanks to programmatic, and I really, especially the more time that I've spent on the demand side, I have a much greater appreciation for the work that Michael Provenzano and the earliest employees at Vistar did, and frankly, building out the programmatic market.
But now that they have, and now that it's much more robust and it's still in its early innings, there is an opportunity for networks like that to get access to dollars that they otherwise would have been challenged to, but to do it entirely on your own and not understand the advanced capabilities or options that are available to you, it is essentially leaving dollars on the table and programmatic is all about minimizing loss and maximizing gain, and so if you can be in a position where you can bring in the right partner, and again, we're a partner. We don't physically own any screens. We haven't invested capital in building out screens. So we don't have any interests that could otherwise be muddied by bringing on additional networks.
We curate the partners that we work with. We say more “No” than we do “Yes”, and it's really important that we think about how they fit within our portfolio, not just in the near term, but in the longterm and how our sales team, frankly, can be successful on their behalf because the last thing I would ever want to do is set unrealistic expectations, which I think can very easily happen, not just in this industry, but really any media space of well, I have this many millions of impressions that equates to this media value so I should generate a million dollars a month and that's nice on paper, and it's nice when you build out projections, but the reality tells a very different story.
And one of the things that, myself, Adam, our team prides herself on as being very open and transparent with our partners and setting very clear expectations of this is what we believe your network is worth, this is what we believe that we can deliver in terms of value. Our hopes far exceed those numbers, but we also don't want to go into a relationship where the numbers far outweigh what we think the market can bear. We do have very high hopes, or as optimistic as I think anyone in this space around where digital out-of-home can grow and what it can become in the media mix. But the reality is that programmatic is still a small part of digital out-of-home spending, it's around 5-6% of our overall spending, and thanks to COVID in industry and out-of-home in the US that was approaching $9 billion, got knocked down to between $6-7 billion and is fighting its way back. But I've long believed that in order to unlock the greater demand and revenue that should be coming into out-of-home in general, it's going to be by way of digital buyers. It's going to be by way of buyers who understand that, layering in contextually relevant digital playspace like with a partner of ours, the bulletin who was in a high rise, residential apartment buildings in major cities in the US, layering that with targeted campaigns, it's hard to beat for a D2C brand like a GoPro or Hell Fresh, or Uber eats, but right now they're not really thinking about that within their total strategy. That of course incorporates Facebook and Google and Instagram and connected TV, and so if we can get any access to those budgets, we should become a much more important, incredible part of the total media landscape.
Is there a distinction between endemic and non-endemic advertising at this point or is it all just like data flags?
David Weinfeld: We really think about it on a network by network and kind of category of venues standpoint. So with the network, like Touch Tunes and, by way of our acquisition of the Danaher group and bringing on incredible talent in the form of Susan Danaher, former DPAA President, CRO at Ad Space (now Lightbox), SVP at Viacom, Victor Germaine, who was a VP at Screen Vision and major sales leader at GSTV and bringing those individuals into our business, but their specialization and where they really focus their energy were on vice categories naturally like beer and alcohol, who were endemic brands through the bar and restaurant category, just as much as you might say for an office building network. That would be B2B financial services or a retail-based network. Endemic brands are much more CPG-focused, but we do see also across all categories because we see a lot of otherwise non-endemic spend from insurance companies and others that you might not immediately connect with a bar and restaurant environment, but who make a ton of sense, just the nature of the audience.
So it really depends upon the brand and agency and what their objectives are. If their objective is to really be where the product is sold, well that's why we do a lot of business with Anheuser-Busch and Heineken. But if you're also thinking about a brand that has a relationship by category adjacency, or just reaching that audience. So think about any of the brands like Uber, Lyft advertising in a bar or restaurant, or a brand like a USAA advertising in a Walmart location, the product itself isn't sold there, but certainly, the constituency that they're looking to reach, that they target by way of other channels are very present in those environments, and so we have a mix, but it really speaks to how we position different networks, and the reality is when you undertake a business like Screenverse, you end up having networks across a variety of categories. It's our responsibility and job then to figure out how best to package and curate that, not just for ourselves, but for the market et all.
So we're not just going to an agency and presenting a disparate menu of offerings but we understand their client mix. We understand the way in which they buy and what their objective is. So we might just say, “Hey, for the types of brands that you represent, and the fact that you're looking to reach a millennial audience, then you're best suited reaching them in bars and restaurants or reaching them in high rise apartment buildings in cities like Chicago, New York, and DC” versus a brand like USAA, that's looking to reach a much broader population across the entire country, and that's where you start pushing them into inventory, like in Walmarts or grocery stores or convenience stores where they can segment potentially against an older demographic or certainly a broader segment of the overall population.
So if I did a spreadsheet exercise of costs of taking ad sales and media operations, in-house versus outsourcing to Screenverse, how is that going to look?
Is it going to be more costly to do it internally or more costly to do it through you guys?
David Weinfeld: Yeah, so we actually, in many cases do this modeling with our partners and it's definitely more costly internally to make that happen. But the other aspect is even if the model shows that it might be less costly, by way of, “if I hire three people, I can build up this sales organization”, you have to look at it and say, what is the success you're going to yield? And that to me is even more important than just doing your cost exercise and saying, all right, I'm going to need two senior sellers and an ad operations person to build up any type of sales business unit, but that alone isn't really going to be successful and do those individual sellers. It's not an easy thing to find people that know the digital out-of-home space and know how best to navigate out-of-home agencies and digital agencies, and are they going to be equipped to really tell a story that's large enough to get your network noticed, but that's also why we look to have our model based on success, such that we're not a hard and fast cost against the business at the outset, but we see success when our partnerships see success. So ours is really a percentage of revenue-based model, such that it's not, you need to make this large upfront investment. We actually believe as much as you do in the potential of this, and we're going to invest a lot of time and energy upfront to get our team trained upon the inventory, to package the inventory, to leverage our relationships across the industry to tell your story and activate you on programmatic platforms if you haven't done so, help you build out those integrations, if you don't yet have them.
And so there's a lot of nuances in that, but I would look really to what's the totality of success that a network could realize trying to go it on their own versus trying to partner with a company like Screenverse, and what we found with a lot of those partners is it becomes a very large challenge to try to do it on their own. And I give everyone the absolute best of lock-in and I support any network that wants to build out their own sales team and thinks that if it's core to your business and you can be the best in the world at selling your inventory, then you absolutely should be the ones to do it. But if it's something you're trying to do on the side, and it's really not part of your brand value, it's not part of your overall culture, overall story, I've seen that very hard and it feels like an extra appendage that doesn't necessarily fit within a company. What we can do is say, we're going to be here and consult you. You don't need to worry about becoming experts in this because guess what? We're thinking about this day in and day out, hour after hour, and we're going to meet with you regularly. We're going to provide you with updates. We're going to demystify the industry in a way that I'm hopeful that, even if we have a network relationship where after two or three years they go, you know what, you've helped us so much, we've actually now had the confidence and belief that we can do this in house, I still see that as a successful outcome because we delivered on the promise of helping them grow their business. I, of course, would love to be with our partners for 10+ years and really build out the highest level of success. But if they decide to bring that in-house, after we've helped them level up their understanding and connections with them, that's successful.
Yeah. Everything you said is so spot on and I wanted to say something about cultural fit and you did, just cause I have seen that as well, where you see a media operation bolted onto the side of a very traditional company and I've watched it play out and it almost never works just because, as one person described it, we’re the land of misfit toys, you just don't fit!
David Weinfeld: What's funny too, and I look at it this way and I wake up every day energized by trying to change this mindset. But even if you look at out-of-home overall, so out-of-home is a marginalized part of the media industry. Overall, it really occupies sub 5% of total media spend. When you look across all channels, then within out-of-home, digital out-of-home is the minority of revenue. That's certainly changing and shifting in the US and other parts of the world. But then within digital out-of-home, digital place-based, this is very much the marginalized aspect then is looked at as a subcategory, knowing that digital billboards take up a lion's share of dollars.
And so I wake up every single day excited because I'm in the area that is that diamond in the rough that has the greatest potential that is maybe being undervalued and underutilized, but it's growing, and it's in an area that I do believe in its efficacy and value, and there are so many studies and so many data points that I know you've read, and the readers of your blog that you published, that people have talked about on this podcast of the efficacy of marrying digital out-of-home with mobile, with social, with connected TV. I just believe in my heart of hearts and I know it's taken longer in many cases than a lot of people have expected. But I so directly believe that once more people start seeing those studies and realizing the results for themselves and leading into space and thanks to programmatic and DSPs, like the Tradedesk and Verizon media and EMOBI and Adelphic and others leaning in and ushering those digital buyers that have access to larger budgets into our space. That's really what's going to drive a sea change and that's what I wake up each and every day, knowing, we're nowhere near where we need to be or where we can be even as a company or as an industry overall. But boy, if I can be part in any way, shape, or form of ushering that forward for my team, my partners, the industry overall, that's what drives me because I look at it as if we can bring more revenue to our company that otherwise looked at advertising as this headache, or this is a tough thing to manage.
But all of a sudden, by working with us, they're seeing seven figures of revenue and they're much confident with understanding, right? It can be hard when you look at programmatic and you see peaks and valleys of revenue and disparate spending come through, and it can be very confusing. But once you have someone that can walk you through the dynamics of how people are going in and spending and how we build deeper relationships with them and what's happening indirectly. Now all of a sudden you're part of a business that, maybe you're not driving the car, but you're a much more confident passenger. And when you're a much more competent passenger, the great news there is you're much more willing to then make investments and build out your network and build out your infrastructure, and ultimately that benefits the networks, it benefits the advertisers, it benefits the SSPs. It benefits the DSPs. And that's what really drove me to start this business and why, when I was at a company in this space, like Vistar that was innovating and driving change and was very successful, that I just felt this push, that there was an opportunity for someone with my background and experience and with Adam and now bringing on Susan Danaher and Victor Germaine and our larger team and the expertise that each of them brings to the table, we have the opportunity to really build a company that has staying power that can ultimately bring an enormous amount of value and also create some efficiencies for SSPs or create efficiencies for networks that they otherwise might have been challenged to find on their own.
Are you bootstrapped?
David Weinfeld: So we've raised a small friends and family pre-seed round of just around $400,000, but actually we'd been profitable in 2020.
We officially incorporated the business at the end of April 2020. We were profitable in 2020, we're profitable today and, we're thinking about it what does raising funding against this business look like? And we look at it, not as a requirement, but as a mechanism to accelerate growth. You know the most important pillars of our business are great people and great network partners.
So the deal you did with Danaher Group, it's probably more like a joint venture sort of thing in a lot of ways? Because obviously, you couldn't buy them out in the traditional sense of a private equity deal or something.
David Weinfeld: Yeah. So I would definitely categorize it as more of an acquihire, and so really being able to bring those individuals in-house. Thanks to our growth and thanks to the revenue that we build, our equity has value. So there are definitely mechanisms within our partnership that involve that, and so that the Danaher group team that's now joined with Screenverse can participate in the success and growth, and that's really ultimately how we were able to put that together, and it was on the back of getting to know Sue for many years in this industry and really aligning on the vision.
I had such admiration for the business she had built at the Danaher group and the importance of the relationship that she and Victor and their operations lead, Taylor had with touch tunes so much so that they were truly an extension of that company, and I said that's so much in line with the vision that we have for the partnerships that we form on the supply side at Screenverse, and we would love to bring your leadership, your knowledge, your experience into our business, and oh, by the way, we get an incredible network in the form of Touch Tunes, and we can just have that part of our overall growth and at a time where bars and restaurants have been challenged in light of COVID.
But now that we're starting to come out and restrictions have all but been eased across the entire US, Los Angeles and California were the final metropolitan areas that had any restrictions on bars that have since been lifted and really say, “Hey, bars and restaurants are hopping right now”, and so if I'm going to double down on any piece of inventory, it's going to be in that segment. And if I'm going to double down on talent, it's going to be with people like Sue Danna, her Victor Germaine, and Taylor, and that team and their knowledge and so much of what they bring into our business is fueling growth, not just against Touch Tunes, but against all of our partners, and as we bring on additional sales directors, as we bring on additional operations, team members, it's really all geared toward how do we maximize success for the network partners that we work with and how do we ultimately build campaigns that are going to drive tangible results for those brands, such that they continue to invest, not just in us, but in digital out-of-home and digital place-based in general
All right, David, that was terrific. We could have talked a lot longer, but I'm afraid we gotta wrap this up. Great to catch up with you.
David Weinfeld: Yeah, it was absolutely great to catch up with you, Dave. You're someone who I have absolutely, in the past, love working with, who I have such great respect for in this industry.
Thank you for having me on the podcast and really look forward to being able to continue having these conversations and sharing the growth story of Screenverse with you and your audience.