Neo exits Canada, sells network to partner

September 14, 2010 by Dave Haynes

Neo Advertising has sold its mall food court network to its mall media partner Traffic, effectively ending the Swiss-based company’s activity in North America (having earlier abandoned once aggressive US expansion plans).

The deal has been in the works for several months and I kept hearing chatter about it being on and off, on and off. But given that Neo and Traffic have been ad sales partners since Jan. 2008 – selling both conventional backlit and digital screens in mall – there was a certain inevitability about it.

The move is a huge step forward for Traffic, says the release, which had been looking in recent years to incorporate digital signage into the range of services it provides. With this purchase, Neo-Traffic gains access to 16 new Canadian advertising markets while acquiring 500 digital screens. The firm now boasts a full range of signage services in shopping malls–digital and static signage, both indoors and out–all under one roof.

“We are very proud of our growth. In the space of only five years, we have added 120 malls to our network across the country. With this acquisition we are now in a position to reach 2.8 million consumers a day from coast to coast. Neo-Traffic now holds nearly 65% marketshare of Canada’s shopping malls with 70 or more stores,” added  Ronald Tapiero, Vice President and Co-founder of Neo-Traffic.

Shopping mall signage is an effective way to reach audiences who are ready to buy and seeking information. When you consider that 90% of Canadians visited a shopping mall in the past four weeks and that when they did, they were in consumption mode, it’s only understandable that advertisers want to take advantage of the strategic media Neo-Traffic has to offer.

Despite being active in the industry for only five years, Neo-Traffic has earned an excellent reputation among shopping mall owners and managers for its outstanding service, innovative product designs, and specialized expertise dedicated exclusively to shopping malls.

Traffic is in and around more than 120 shopping malls in Canada.

The company will be trying to make a go of it in venues where DAN Media and Neo both struggled mightily (though Neo at one point was saying it was profitable). Food courts are a difficult environment because they’re big and anything but intimate, and people are usually there with someone else, chatting or wolfing down their burgers and Chinese buffet selections. I’ve been paying attention to audiences in those venues for a decade and there’s rarely many people looking at the screens.

When Neo acquired a bankrupt DAN in Oct. 2006 they then did a national retrofit that changed the technology and packaged up the screens really nicely, bring them down in height and using a tandem set up that ran full-screen content on one side and full screen ads on the adjacent screen. The automated news and weather content Neo was doing – using Flash scripting and motion graphic backgrounds – is easily among the best I’ve yet seen in the sector. When they were clients, I told them they should license that stuff.

Traffic’s big competitor in malls is Pattison Outdoor Advertising and OneStop Media Group, who have a long-term partnership with large portrait screens positioned along the walkways of many major malls. Even Pattison, with its well-established sales force and deep media ties, struggles to sell time in the malls, though it seems an ideal medium for reaching consumers when they’re ready to buy stuff.

As the saying goes, let’s hope the third time is lucky for this food court network.