DSE2011 – Thoughts on the Harris 7-11 deal

February 24, 2011 by Dave Haynes

Harris Corporation had a press conference on the trade show floor at DSE Wednesday to announce its rather large deal with Digital Display Networks, a DOOH network that has a deal to install in 6,200 7-Eleven stores.

The project, if fully realized, is worth $75 million. It is a 10-year agreement that sees Harris providing InfoCaster™ and Punctuate™ software, as well as Managed Services.

7-Eleven TV, fully deployed, will reach more than 200 million shoppers monthly. 

The partners suggest that based on an analysis of various Nielsen ratings data, the GRPU (gross rating point units) of 7-Eleven TV will make it the fourth largest broadcast TV network when fully deployed.

Harris is supporting 7-Eleven TV with its Managed Services offering for 24/7 monitoring, data hosting and support via dedicated Network Operations Centers in Dallas, Texas, and Melbourne, Florida.

“With the partnership of Harris, the nationwide deployment of 7-Eleven TV will become complete, and a milestone for the DOOH industry will be reached,” said Darren Mann, co-CEO of Digital Display Networks.  “This network truly signals the arrival of this advertising platform as one that can efficiently and effectively motivate purchases on a very large scale not unlike broadcast networks.”

First, congratulations to my industry friend at Harris. Not sure who drove this, but big points for tenacity. The release says DDN just bubbled up in 2010, but I met with DDN about this deal three DSEs ago, in 2009, and that was after chats in late 2008.

The deal has been around forever and most serious people in this market have have had discussions about it and spoken with a guy who was DDN’s technology bird dog, or the two co-CEOs.

There are suggestions Harris made an investment that helped win the day. But others, and more of them, are suggesting Harris won on merit alone. I have no idea but will just plain ask when I see the Harris folks today. I do know it took a long time to raise the money to green-light this thing.

My primary thought around this deal is that it has one big price tag and I would suspect it will roll out in chunks, with expansion driven by ad sales revenue perfect milestones.

DOOH is a really tough game and you will find a wide range of opinions out there from knowledgeable people about c-stores as an ad medium. The dwell times are very short, the audience profile is very broad and hardly prime. But the medium can influence purchase decisions at an opportune moment for brands in beverage and confectionary.

The big question is whether the major guys like Coke and Pepsico will allocate periodic launch money to this (not so good) or make the network part of the year-round media mix.

If the latter happens, then this is a big moment for DOOH. I’m not sold on this and the investors are adventurous, but with this profile its important that it does succeed.