Learning a lesson in how not to plan a media network

The AdLab blog has a post up that is a near perfect representation of the struggles of this industry – particularly the ad-driven side of it.

A college freshman has done all the legwork to start up a network in Las Vegas airport shuttles, and at the 11th hour is discovering this ad sales stuff is a bitch.

When I went inside a Vegas shuttle bus and saw a TV that was not being used. I did some research and came to the conclusion that none of the Vegas vehicles utilize their TVs. So I created a horrible slide show video presentation, which has since became very well done, and began to make agreements with limos and shuttle bus companies to allow me to own the rights to their TV’s and play the videos. I get advertisers and give them 25 percent of the revenue the ads generate

I currently own the rights 300 vehicles that go from the Las Vegas airport to down town and will reach over 175,000 captivated Las Vegas tourists a month. I am finalizing all the contracts /production of the videos/ as well as our advertisers packet. Our goal launch is in 2 months. Only problem is getting advertisers. I am having a hard time due to very little experience and knowledge. Over the past 6 months I have worked very hard to build my business, from relationships with all the limo/ shuttle bus companies to building all the systems (equipment for the buses to track so we can make sure ads are being played, deal with number one production company in Vegas, and figuring out pay scale) I have received interest from a lot of people but can’t seem to find advertisers…. Any ideas? Do you think what I have is an asset? http://transvertise.com/

I believe out of home digital marketing is a growing trend. My goals is to eventually install TV’s in the Vegas vehicles that don’t have them and expand to other tourist locations all over the country. I would also like to have our custom branded advertising in Rental Car buses such as Budget etc… Small steps first. 

Now, I have a lot of admiration for a college student who’s probably not even old enough to legally buy a drink in Vegas to be out there trying to build a business while also taking classes. If he’s taking business classes, he’s getting a great set of real world lessons.

That biggest lesson is very likely that the first step in planning an advertising-driven network is figuring out whether there really is money to be made from advertising. If there is, who has it and how do you get at it? And then, if your very conservative estimates still make for a workable business model, then go out and start winning contracts.

This is a young guy who is going to win from this no matter what, because of the lessons learned. What gets my head shaking is the number of times I get calls or emails from people far older and far more experienced in their careers, who are doing the same thing — seeing a pot of gold in ad-based media networks and pouring their energy and savings into the things, only to start asking WELL into the process what the going rate is for ads, and who might sell for them.

Stressing what should be obvious, and advice that is not all that hard to find anymore, anyone building out a media network that will rely on advertising sales to live or die needs to spend ALL of their initial time researching the opportunity and challenges first, if there does indeed appear to be pent-up media buying demand, THEN find someone who has direct experience (and demonstrated success) selling media. Figure out what that looks like in revenues, realistically, and THEN figure out if still works if you have to give up a revenue share.

My biggest advice to anyone looking at ad-based networks right now, in an economy in which mainstream media is struggling mightily, is quite simple. Don’t do it. Not right now. The opportunity will still be there in six to 12 months, and if someone else swoops in and takes that opportunity, you might well be able to pick up the remnants of that deal when it implodes under the weight of initial capital and operating costs.

Dave Haynes

Dave Haynes

Editor/Founder at Sixteen:Nine
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for more than a decade. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He's based near Toronto.
Dave Haynes

@sixteennine

Decade-old blog about digital signage and related tech, written by industry consultant and shit-disturber Dave Haynes.
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Dave Haynes