Lumo co-founders Phil Clemas (left) and Kent Harrison now run a business with 71 digital billboards and 26 staff. Photo montage / Oliver Rusden
In a media industry facing many challenges, an Auckland pair have made an audacious move, buying their outdoor advertising business outright. Shayne Currie reports on the glow of digital billboard firm Lumo.
Their first billboard stood as a physical marker – a single digital screen on a corner opposite Auckland’s Victoria Park. It represented a new, cool kid on the block, literally.
It was December 2016 and a few months earlier, Phil Clemas and Kent Harrison had quit high-paying jobs at one of the biggest outdoor advertising companies in town, APN Outdoor.
The pair and their new start-up venture, Lumo, were the focus of cynicism from some within the industry when, after several months of planning and consents, their first screen emerged.
“We were too small, we only had one billboard – all that kind of stuff,” says chief commercial officer Harrison, recalling the niggle.
“It was expected and it didn’t deter us at all,” says chief executive Clemas.
“It didn’t motivate us any more than how we were already feeling.
“We were very focused on doing something that others hadn’t done – we were all about being a new, disruptive brand and to change the status quo.”
With one screen, it was hard, early graft – difficult to break through with some advertising agencies.
However, the pair had several key advantages on their side – a mission of innovation and creativity with their digital focus, a more surefire way to measure the audience, and well-established contacts, some of whom were willing to give them a chance.
They remember literally cheering for early wins: “Woohoo! A $30,000 campaign,” recalls Clemas.
Over time, their focus and tenacity started paying richer rewards. They swept all-comers in 2017 to win the contract to run a large new digital screen at the bottom of Anzac Ave in Auckland city.
Clemas’ pitch, says Harrison, was something to behold, drawing upon the importance of a Kiwi-grown company to win the contract.
It was to be the third screen in Lumo’s inventory after Victoria Park and another in Hamilton.
Today, the Victoria Park, Anzac Ave, and Hamilton billboards all still operate, as well as 68 other digital screens. In total, there are 40 Lumo billboards in Auckland, 17 in Christchurch, 11 in Wellington, two in Tauranga and one in Hamilton.
In the world of media, where headlines are often about cutbacks, impairments and revenue challenges, Lumo is a success story, with now 26 staff and plans for another 11 billboards across its network in the next 12 months.
But the biggest sign of confidence in the business has come in the last month from Clemas and Harrison themselves.
They’ve bought the company from fellow 20% shareholders Shannon Walsh, Connel McLaren, and Craig Greenwood, for an undisclosed sum.
The pair each now owns 45% of the firm; the other 10% is held by the man who helped them stitch together the deal, corporate-financier Andrew Christie.
“We’re excited about it,” says Clemas, over a coffee near the company’s Britomart headquarters.
Buying Lumo, says Clemas, gives him and Harrison the chance to accelerate the company’s growth plans, as it competes against the likes of overseas-owned companies like JCDecaux, MediaWorks, and Oohmedia.
“We see a really exciting, optimistic future for out-of-home, and we want Lumo to continue leading innovation and helping drive growth in the channel in our little way.”
Billboards are some of the oldest and purest forms of advertising – lighting up locations such as Times Square in New York, Piccadilly Circus in London and corners of our own biggest cities.
They started out as large and intricate posters to promote circuses in the 1830s – PT Barnum proclaimed his carnival as “The Greatest Show on Earth” – before transforming into full-colour artistic masterpieces (think Coca-Cola and Campbells Soup) and dazzling neon monstrosities.
People have worn billboards and in one famous case in New Zealand – a radio station stunt – lived on them.
Outdoor advertising is now enjoying a renaissance in the digital age. Many of our street corners, bus stops and previously vacant walls are alight with fast-moving digital imagery and headlines, trying to catch our attention in a fast-paced world.
Lumo has caught that wave, and some of its technology has helped pave the way in the local outdoor industry.
For instance, outward cameras installed on the screens can count pedestrians and cars, giving advertisers more reliable measurements of audience.
Harrison can call up live images of the billboards on his phone, using a special programme. Advertisers can also dial it up to see their marketing in action.
And with digital screens, there’s the ability to host more advertisers and attract more eyeballs than a traditional static billboard. There’s also less hassle – no cherry-pickers required to change the “skin” – but most importantly, Lumo can use technology to trigger creative ads bespoke to a billboard’s location.
Clemas provides a simple example of an umbrella manufacturer who might want their advertisement to screen when it’s raining.
With the use of an API plugged into the MetService – which provides up-to-date weather conditions at specific locations – Lumo’s ad servers can automatically trigger the umbrella ad.
“When the weather forecast or weather conditions say it’s raining, that information comes back to us, to our ad server,” says Clemas.
“While it’s raining, the advertising for umbrellas is playing, and when it has stopped raining, those ads come off the screen.”
That dynamic advertising is revolutionising the outdoor industry, says Clemas.
Outdoor advertising has certainly taken off in New Zealand in the past eight years, from annual revenue of $103m in 2016 to more than $203m last year.
While that revenue is not in the ballpark of the hundreds of millions brought in by digital advertising, and – still – television, radio and publishing, the outdoor sector is growing.
According to the Out of Home Advertising Media Agency, the primary growth driver last year was digital revenue – it increased by 14% year-on-year to reach $157m , representing 77% of total out-of-home revenue.
That percentage of digital outdoor advertising is world-leading, says Clemas.
Clemas and Harrison are well-known in media circles around town, by deed of their extensive background in the industry and their willingness for shoe-leather meetings.
Over coffee, they introduce me to their Westpac banker who happens to be in the cafe at the same time. He scuttles away when he sees the digital recorder, but the pair praise Westpac for the support of the business, and their buyout.
The pair say they complement each other.
“I’m an ideas man, Phil’s an executor – that would be fair to say, I think?” says Harrison. Clemas agrees.
They say the nature of their business and flat structure is that staff will be willing to tell them which of the ideas are good, which might need more testing, and which are bad.
Clemas says he and Harrison listen to that advice.
They have high hopes for the business now that it’s more fully in their hands.
“It provides for us the chance to accelerate the growth of Lumo, partly on the back of what we see as growth within the channel, within the industry, but also growth on the back of our ongoing development of technology, that helps support efficiency within the business, but also helping support our clients with greater creativity.
“That’s, in our view, a big part of what’s going to continue to drive digital out-of-home is not just the flexibility of the medium, but the ability for the creative to be more effective. It’s a combination of the two.”
Clemas acknowledges the stress within the media industry over the past year or so; that’s also translated to the likes of advertisers who might not be getting the cut-through they once did with, his example, lower television audiences.
He sees out-of-home having a big opportunity, using digital technology and measurements, to draw in more advertisers and revenue.
“So where do they [audiences] go now? Well if out-of-home doesn’t intervene by being more proactive and more able to deliver audience, in a measured way by providing a ROI [return on investment], then it’s all going to go to Meta and YouTube, all offshore.
“That’s not good for our economy and it’s certainly not good for media in New Zealand. So we’re doing a little bit to try and keep some of that money in New Zealand.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
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