Mereo’s platform helps OOH advertising companies manage their revenue
Guest post by Mel Stott
Friday, April 20, 2018
Mereo, a global OOH (out-of-home) revenue management company, joined DPAA in 2017. Mel Stott recently spoke with David Giudici, the company’s Finance & Sales Director.
Tell us about what Mereo does in the digital out-of-home ( DOOH ) space.
Mereo has a unique position in the DOOH industry as a worldwide revenue management expert in out-of-home since 2000. Mereo was founded by consultants who had implemented revenue management techniques for Euro Disney, Eurostar and TF1.
Initially our company was created to develop revenue management tools for the radio-TV (Lagardère Group in 2000) and out-of-home (Avenir in 2002 and JCDecaux) industries.
Throughout our 18-year history we have worked side by side with our clients as close partners, deploying tools and processes that serve intelligence and increase revenue.
This journey has brought us to design Price&Place, our new DOOH revenue management solution. Price&Place is the result of everything we have learned so far, materialized in one tool in the service of the DOOH industry.
Price&Place provides a complete suite, with different modules: media-planning (a real challenge up to these days), booking (internal & external), dynamic pricing, forecasting and profitability analysis (on both inventory and clients).
Price&Place modules are directly plugged into the sales house’s IT system. We have a dedicated site for Price&Place at www.price-and-place.com.
Mereo positions itself as a revenue management platform for digital OOH ad companies. However, we know that the ad pricing modules are already built into most DOOH ad management software.
Does this mean that Mereo is in competition with those software providers? Or is it an add-on component that “sits” on an existing full service DOOH platform?
We do not directly compete with existing DOOH network management software, but we add a modern, data-driven component that helps OOH companies better understand their sales process and improve it.
It’s important to make the distinction between revenue management that is based on dynamic pricing and pricing modules.
In traditional booking systems, it’s normal to have prices to be able to quote. But the price is “basic,” based on simple rules (premium, discount on volume, etc.) Those pricing rules are static or can be manually adjusted.
Revenue management based on dynamic pricing defines the price of each asset dynamically daily, as explained above.
As far as we know, Mereo does revenue management at a different level of precision and implementation. We have been implementing these techniques since 2000 (and for instance developing and using IA since 2002).
Other software providers announce they integrate a revenue intelligence module in their offer, but that is quite new, and we have no visibility on their offerings. So, yes, we could somehow be competitors.
Another difference is the consulting which goes with our revenue management system. Revenue management software is not relevant without an organizational transformation of processes, sales habits, and so on.
Finally, everything we design is meant to acknowledge and assess value, client behaviors and client satisfaction. We did not see that in the systems we studied in our different consultancy missions.
If it’s an add-on, what digital OOH platforms is Mereo compatible with? Could you give us any examples of such integration?
As we are accustomed to working with big actors, we adapt to their IT systems or platform. We mostly have integrated with in-house booking systems. We did it with Salesforce, for instance. We have the expertise to integrate our modules to the sales house IT system.
Price&Place is the result of what we observed and learned through our interface and integration experiences.
Today, the sales processes and pricing in the DOOH industry are client+data+audience-centric. To make the process smoother and more efficient, we directly integrate planning and booking solutions to the revenue management pricing module. Integrating all the data (inventory + audience + pricing) and using AI allows to get rid of long and complex interfaces.
We have seen the limits of the systems we integrate with and thus created the Price&Place Media-Planning and Booking systems.
Also, Mereo is not a programmatic sales platform; we are not an SSP. We support SSP and contribute to their intelligence.
Revenue management applies to any business. Why do you favor the OOH industry particularly?
Because we saw a bigger stake there, with more transformation to achieve in this area. Traditional OOH sales houses must integrate an IT & data mindset in a sales culture.
That’s tough and it’s our specialty, so there is more value for us to serve, which is motivating for us.
The important thing is that thanks to Price&Place, we bring more than a software, we bring a new mindset to this industry. The tool itself was designed to serve that ambition. Our goal is to help sales people increase revenue and better serve their buyers’ demands.
Can you offer an example of your dynamic ad space pricing capabilities for DOOH networks?
Mereo Price&Place defines the price of each asset dynamically on a daily basis.
Generally, two kinds of prices are provided (price bracket):
The targeted price, which says what the sales house could aim to achieve realistically based on data and strategy (more efficient and realistic than budgets).
But also, a floor price, which says under what price the deal has big chances not to be profitable (the sales house will probably lose opportunities later – e.g. additional deals because of a lack of cherries or more profitable deals for the same asset).
Those prices are calculated based on lots of parameters: day, hour, panel, screen, audience, geography, size, historical prices, incoming demand, buyer profile, buyer sector and sales house strategy, volume, specific price agreements with the buyer, cost of the panel for the sales house, and more.
As a philosophy, the price will also depend on what the buyer wants to buy. If the buyer knows exactly which assets and time slots he wants, he can buy by cherry-picking and will pay a premium.
If the buyer wants to commit on an audience / share of time / impressions count, he buys based on a brief and will then benefit from a specific discount as the sales house preserves the ability to reshuffle its planning.
Price&Place provides pricing information, explanations and counter-proposal scenarios.
But whatever Mereo Price&Place recommendations are, the sales team always has the final say.
Who are some of your OOH clients?
All our clients have a mixed OOH / DOOH inventory.
Historically, Mereo has dealt with major OOH actors like JCDecaux and Mediatransport in France. We are currently deploying Price&Place for Ocean Outdoor in the UK, which is mainly DOOH.
We also work with Imediacenter (sales house of Auchan) in retail to help them design their sales processes.
What is the biggest mistake sales teams tend to make in pricing their inventory?
Hard to tell the biggest. Here are some usual sales team mistakes:
Book easy deals first (prime time, for example) without taking care about how they, as a sales house / company, will then sell the rest of the inventory without having any cherries left.
Only trust their “sales intuition.” Intuition is great, but with no rational data and metrics it quickly tips the scales in favor of emotions (please the client, fear to miss the deal, etc.).
Data helps bring more rationality into the process. They put sales people in the best conditions to value and negotiate their products.
Lack of creativity due to a lack of visibility in negotiations. When a client wants to negotiate a low price for a product, it is important to assess if this product really fits his needs.
If someone is only looking for cheap products, the sales house may have “non-premium” products that will fit the buyer’s demand. But this requires having a dynamic and smart media planning visibility; knowing what is of interest for my client, if it is available and at what price.
Lack of reactivity in negotiations. During negotiations, it can take days discussing and analyzing to work out a counter-proposal or alternative scenarios, while having clear media-planning options and KPIs should produce a good answer within the hour.
The design of the inventory may sometimes limit the ability for sales to stimulate the market (too few offers to be attractive). There is a risk of cannibalization within the company (for instance a local deal that blocks a national deal because it involves a critical asset).