The new star of two capitals
- The advertising market is always wary of new players. Ilya, please tell us about your company and your decision to work in advertising. What is your connection to outdoor advertising?
- This story began a year and a half ago. Then I worked in the banking structure, in the department of work with problem assets. As a result of a non-performing loan as collateral, we got an office building at 2, Shchelkovskoe Highway. It also housed the headquarters of the new company, which I moved to the position of Deputy General Director, where I began to manage the business center. I immediately noted the successful location of the building in terms of visualization, good visibility and other parameters. As a result, it was decided to place a media facade on it. We have collected all the necessary documents, obtained a permit and installed the structure with the area of 2500 sq. m. This was our first project, thanks to which we plunged into the wonderful world of advertising, which we liked very much.
- So you had enough time in practice to evaluate advertising as a business?
- Absolutely. In spite of the fact that there was a drawdown in almost all areas due to sanctions, crises and other complex processes in the economy, advertising has retained its profitability. And it is higher than the one we generate in other industries - development and a number of other investment projects.
We feel very well in this market. We are building up our positions. We have launched a project in St. Petersburg. Several new projects are about to be launched in the Moscow region: five digital supersites have already been installed on the Moscow Ring Road, and another 30 designs will be installed in the Moscow Region in the first half of the year. This will be a mixed address program of digital billboards and supersites, mainly in the western direction. There are no miracles here - most of them are tied to the objects of our property. Therefore, it was only a matter of time before all the necessary permits were issued.
- Please specify, within the limits of new projects only digital-constructions will be established?
- Yes, in Moscow and the Moscow region they are exclusively digital. We are a small company, not rich and we do not see any sense in competing in the huge advertising market of static. Most of our colleagues have thousands of advertising constructions. And the digital outdoor advertising has not yet reached such a scale, there is an opportunity to develop even with small volumes. I hope the advertising market will accept us, and we will be able to occupy its niche. We will be glad to cooperate with everyone on mutually beneficial terms.
- How did you start your business in St. Petersburg?
We started by buying lot number 17, which was won by Vintage at the auction in 2017. We acquired it and opened a new company - North Star Media. It happened at the beginning of September this year. The name turned out to be so successful that it was decided to make a single sales house of all our media capabilities with two offices - in St. Petersburg and Moscow - under this brand.
Our address program in St. Petersburg includes 64 places for advertising. Digital screens are installed on 42 of them - almost all of them are put into commercial operation. As of the beginning of November, only three designs were still in test mode, and the necessary commissioning works were being carried out. The others broadcast advertisements in the normal operating mode.
It should be noted that at the time of the project launch in early November, 30% of the airtime was sold. Among the advertised brands that could be observed in the first days were Pyaterochka, Rive Gauche, Karusel, etc.
I would like to note that this is the first major project for us. We are new people in this market, but we treat everything with the soul, with the owner's approach. We keep track of all the details and are very worried.
- Were there any doubts in the implementation and further work of the project because of the difficult situation with the bidding for advertising space in St. Petersburg? Are these risks still present?
- I personally did not participate in the auctions, I bought the business for real live money - not in debt, not in credit, not in installments ... And I did not plan to be a party to any lawsuits. Therefore, it certainly upset us. But we were ready for all kinds of lawsuits.
- I am sure that our judicial system will understand everything. We are personally convinced that everything will be the same as it should be in the beginning. To date, there is only one cassation left, which I am sure we will win. Now we have written a complaint with a request to impose interim measures and to cancel the decision of the Ninth Arbitration Court of Appeal on the appeal of the Federal Antimonopoly Service on the suit against the Committee on Press and Media Relations of the St. Petersburg administration and outdoor advertising operators working in St. Petersburg. I would like to remind you that earlier this year, in May, the Moscow Arbitration Court, a court of the highest instance, dismissed the claim of the Federal Antimonopoly Service. Obviously, this story will last a very long time. Certain risks remain. But, of course, all this time we will be working.
- I have heard that you were the first in Russia who had to get certification from the Federal Service for Supervision in the field of radio-magnetic compatibility of your media facade with their transceiver stations. Share information? After all, many market participants have yet to do so.
- Yes, this wave has risen at the very moment when we were installing our media facade. As a result, the cost of the design has risen to 700 thousand dollars. But it is really very important, and all this story with obligatory certification from FSO, which is unfolding today, is not groundless. And it is not only in the government corteges, special communication is used in a variety of very important situations. In an era of mass digitalization digital designs along the roads create huge obstacles to all the traveling special services.
The process was very difficult, as well as many of the things that have to be done by the pioneers. It was obviously impossible to get the range of FSO communication frequencies (jammers, transmission channels, etc.) - this is secret information. We brought samples of our future screen cabinets from China from the plant and gave them for testing to technical specialists at the FSO. Time after time, we made the recommended adjustments, wrapping each of the rooms in copper film. As a result, we have developed a frequency that is quite the opposite of that in which the FSO operates. And we have full 100% compatibility with their radio-electronic means. That is, the radiation from our media facade to the FSO devices is exactly zero. And all their devices can work without problems even from our media facade. This is also proven in practice!
By the way, we have also conducted research in the interests of the general public. Our tests have shown that there is no harmful radiation, even if the LED blocks we use are placed on the window sill. And all the office workers in our building can also work quietly without any risk to their health, relying not just on our words, but also on the actual tests.
- I'm sure many market participants are interested in who is on your team. How are the relationships with the agencies going? What pricing principles do you follow?
- We have attracted many specialists from the advertising market, including those with experience working with major operators of the outdoor advertising market. We have a team of our own in St. Petersburg, and it's too early to talk about the results. St. Petersburg is a very popular market for advertisers, and there should be no problems with sales.
We are open for communication and actively participate in advertising life, as well as in specialized events. This is also the September Congress in St. Petersburg. And the National Advertising Forum in Moscow in November, where our company acted as an official UN partner of the event of the Association of Communication Agencies of Russia. We actively get acquainted and communicate with major network advertising agencies and are always ready for a dialogue.
Pricing is a delicate issue. The principles that we see in the advertising market, we are not very clear. Why inflate the price, and then giant discounts to demonstrate loyalty to one or another? We would like to be absolutely transparent if possible here. Set stable prices. Of course, the system of discounts is also planned, which will depend on the occupancy of our network, the scale of the repurchased address program, terms of placement and other objective parameters. In any case, we will have good affordable prices.
We perfectly understand the laws of competition and know the advantages of our colleagues in the advertising shop - in the St. Petersburg market we have to compete with the huge whales of advertising. And price is one of the main survival tools. We will be dumping, but not too much.
- Will you sell advertising spots according to the same standards that are now accepted in the market?
- Yes, of course. We have a standard advertising block - 1 minute, inside it spots - for 5 seconds. Techniques are also common. But if the client wants to implement non-standard solutions, we are ready to join the project.
- And who is your technical partner in the project?
- This is an HD company. Cooperation with them began with the launch of our first media facade. In the course of their work they proved to be good - even when choosing a contractor, I was impressed by their project on the facade of the Hanoi - Moscow Shopping Center building with the area of 730 sq.m. with a high resolution picture, since then HD has been our technical partner for all digital projects.
The Russian partner provides all technical works, commissioning processes and additional warranty. The digital solutions themselves are supplied by the well-known manufacturer Dicolor, which is one of the top-5 world's best manufacturers of LED screens. For us, it is crucial that the technology does not fail us. Therefore, we choose the best solutions based on LEDs Nichia, which differ not only in high luminous flux and efficiency, but also durability. Quality and warranty from the manufacturer and additional guarantee from our Russian technical partner protects us from failures and unforeseen expenses.
- Will they be equipped with systems for measuring the quantitative and qualitative composition of the audience/passenger traffic? If yes, what are they? Is it planned to develop this area in the future?
- We think about this topic very actively. This is what the future is all about. We have already equipped the media facade with the equipment of "NPO Analytika" - these are the so-called Wi-Fi traps. Wireless analytics makes it possible to measure the behavior of the audience passing by the advertising media equipped with Wi-Fi sensors, gives an opportunity to reinforce the contact with those who saw a certain advertising message in the outdoor advertising with the same advertising in the Internet, as well as to analyze the physical profitability (how many of those who saw the advertising message in the out-of-home then really came to the advertised location). Thus, the toolkit "NPO Analytika" gives the opportunity to provide absolutely transparent information to our customers, to optimize both the placement itself and the creativity on the basis of the received data. Similar technologies will also be used in St. Petersburg constructions. In the future, we plan to constantly improve the technical means used on our designs and from other companies to be better and more convenient for our client.
- Which factors determine the pace and scope of further expansion of your digital construction network in Russia?
-We are going to systematically develop. By the beginning of 2020, we expect that our network of two capitals will consist of 120 advertising structures. I will note at once that we do not carry out any Napoleonic plans, we are not going to collect credits.
- Are there any plans to be present in other Russian cities?
- They do exist, but they are not related to North Star Media. This project is developing in parallel. There is another company, GMG, which is developing a network of media facades in large Russian cities. It is planned that by next summer 25 media facades will be installed in Ekaterinburg, Omsk, Novosibirsk, Chelyabinsk, Saratov, Samara, Sochi... And eight of them are already working. In each of them my participation is 10-15%. I won't disclose all the details now, but we will make an official presentation of this project in the near future.
Source: NARUZHKA. Advertising edition #208 for customers