Very Odd: “Strategic Partner” Buys Ad Rights To Macs C-Store Digital OOH Network

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This is very odd, but then again there is no end of Very Odd in the Digital OOH (or whatever we’re calling it this week) space.

iSIGN, and over the counter-listed tech and media play based in Toronto, has sold its advertising rights to the Mac’s c-store network in Canada for $1.5 million a year, plus a royalty.

This is a network, if you look at the financials, that doesn’t appear to generate anything remotely close to $1.5 million in ad revenue annually, and presumably whoever bought the rights thinks the pot of gold is many times that of $1.5M, to make it worth their while.

Unless they’re nuts (see opening paragraph).

What’s also very odd is the announcement doesn’t say who has bought the ad rights.

I have been watching this company for a couple of years because they promote themselves through investor relations PR with the intensity of a classic stock promoter, announcing pretty much anything. I also dip into the OTC investor boards, which has shameless cheerleaders trying to boost the share price and others who have been steadily railing against the management team and said crappy share price. I’d taken a particular interest lately because the company’s contract with the group that owns the c-store guarantees an annual minimum royalty to the store of $500K, and based on the financials I didn’t know how that was going to actually happen.

One bit of speculation about the buyer is that a brand’s agency has bought the rights to dominate the environment (which is pretty tough with two or three screens in fairly big footprint stores).

So someone or something has all but rescued this and let iSIGN – which had bought the network a couple of years back in what looked like a deal to show someone was buying their proximity marketing tech (even it was really themselves) – go back to being a tech company.

The company that was selling the network and had the rights – Pinpoint Media Group – failed badly. Many, many people have tried c-stores as a medium, and most and maybe all have failed (see 7-11 US for latest example).

With that context, here’s today’s announcement:

iSIGN Media Solutions Inc. (“iSIGN” or “Company”) (TSX-V: ISD) (OTCQX: ISDSF), a leading provider of interactive mobile advertising solutions that serves advertisers, manufacturers, retailers and advertising agencies throughout North America, is pleased to announce that it has successfully concluded negotiations to grant exclusive advertising rights for the signage network and mobile network located in the Mac’s Convenience Stores (“Mac’s”) across Canada with a new strategic partner.

The strategic partner is a company with a strong background in the digital signage industry and a successful history of selling digital network advertising. This agreement will enable the strategic partner to add the Mac’s network, which is the largest digital and mobile network in North America consisting of approximately 6,000 screens and 1,400 antennas in about 1,400 stores. This expansion of their existing footprint is to increase their advertising sales.

This agreement, commencing July 1, 2013 will mirror the length of iSIGN’s contract with Mac’s with an option for a five year renewal. The strategic partner has agreed to pay $1,460,000 annually, commencing July 1, 2013, for each year of the contract in order to maintain the exclusive advertising rights. iSIGN will also receive a commission of no less than 5% on the gross advertising sales generated by the strategic partner throughout the term of this agreement.

“We are very pleased with this agreement,” stated Mr. Alex Romanov, iSIGN’s Chief Executive Officer. “It moves the responsibility for the sales management of the Mac’s network to a company with digital advertising sales background that is strongly committed to significantly increasing sales in the Mac’s locations.”

“The partnership provides us with a significant and regular cash flow that will be used to expand our core business of data gathering through mobile messaging,” added Mr. Romanov. “We look forward to working together with our new partner and will continue to offer our mobile messaging solution to enhance or establish other networks.”

I really doubt any of the big guys, like a Pattison or Astral, are part of this.

Big, big Hmmmm on this one.

9 thoughts on “Very Odd: “Strategic Partner” Buys Ad Rights To Macs C-Store Digital OOH Network”

  1. Mathematically you would think this deal makes sense?

    Yes, $1.5M sounds like a lot money, buts its only about $1000/per screen/per year (based on the 1400 locations). That is less than a $100/month/location.

    So theoretically, if the Buyer can lock down 3-4 brands at a nominal $50/month/location each, plus some complimentary advertisers…they can make a nice ROI.

    BTW….this is the foolish back of napkin math most DS vendors think about when getting into the advertising game.

    Realistically, getting ad dollars is very hard work. Damn hard.

    Don’t do it.

  2. Don’t know where the author is coming from or why he is so needlessly negative about a very positive development in the DOOH chanel.

    Firstly, the iSIGN networks are all integrated with IMS and Smart Antenna equipment which not only identifies but sends relevent offers to mobile devices that come into proximity of Macs stores and receive shopper response to the offers. This data is valuable to advertisers and brands. Four and five years ago in Singapore iSIGN was receiving up to $1500 per DS per month until the recession hit from name brand advertisers.

    Now years later and in North America the recession is ending and big brands are interested in capturing data on their ads to improve ROI and offer better offers to shoppers.
    Macs locations service 1.5 million shoppers per day and each store has 3 to 4 DS per location plus ability to message mobiles and capture data. It works out to about $30 to $25 per DS per month plus the captured data and about 1 million devices per day as an audience with messages costing as low as .001 cents ea.

    The recession is passing and getting boring and big brands want measurement and are ready to pay for it. iSIGN has the solution and the partners to back it…so come on Dave do yourself and your readers a favour and get positive as you have no reason to be negative on a Canadian start up that has worked so hard through this recession to get where it is.

    The iSIGN Smart Antenna can add measurement and enhance any OOH, DOOH advertising network and give measurable ROI to all. PS the reseller doesn’t want to be recognised yet to avoid the barrage of inquiries and negative slurrs that an aggressive smart company does not need at the start of this engagement but it has put it’s money down and has clients. In my opinion it is smarter and quicker then Pattison and Astral who would do very well to engage iSIGN to add value to their advertising clients as well.

    Thanks for the article Dave…any news is Good News but positive is better…I suggest readers do some math to appreciate our solution and partnership.

  3. Your reseller doesn’t want to be recognized because they are taking a big risk. This deal can seriously hurt their business if they are not careful…and if it is their first time selling advertising on a DS network (which it seems like it is) they better be focused on how these DS displays and antenna’s are going to drive sales. That’s it. That is all that brands in the c-store category care about. BTW: the delivery of coupons to mobile devices in proximity has never really worked in Canada, and probably never will. Tell them to stay away from using this in their sales pitch.

  4. Alex thank you for your response, its very clear to me that there are some still stuck in the past.

    As little as 5 years ago we did not see everyone with a smartphone in their hands 24/7

    I see plenty of markets that can benefit from
    proximity solutions along with valuable data isign HW/SW offers to any one brand or retailer to prove roi.

    btw ,Carol Barnes great article on where mobile couponing when in proximity .

    Isign and partners in the usa are developing another major footprint called Nationalnetwork with National oil and Marathon whom already have proven campaigns with as high as 30% redemptions on gas coupons. I ‘d say that is great response and proof that mobile users are infact adopting and accepting deals when offered at point of sale or within proximity.

    Mobile is not going away and isign has a very effective way to reach consumers as long as relevant content or valuable promotions are offered.

    • There will be much much more confirmation of the adoption of proximity messaging by both enterprise and shoppers to benefit from bargin hunting the “GREEN WAY” without messy and expensive print. Certainly all of our billion dollar partners are on side and continue to promote and value our backend metrics for ROI increase and shopper insight.

  5. Thanks for the responses and debate, though I would encourage the stock promotion go back to the OTC bulletin boards.

    • David,

      There are only 5 comments to your recent blog.

      Its either you appreciate reponses or comments or you don’t.

      Btw, I highly doubt this method would be used to promote any one company. It will be my last comment here on this subject .

      Cheers

  6. When I am not appearing in movies, I frequent malls with my kids. Actually, not only malls, but every major venue you can spend money with your family such as amusement parks, airports, movie theatres and so on. I wanted to be the first to tell you that no one is doing proximity couponing to mobile devices. More importantly, you are day dreaming if you think that proximity couponing is going to catch on now – or in the future. An acting buddy of mine nearly lost his shirt in the bluecasting days of 2007-2008 by offering to send coupons over bluetooth for retailers. It didn’t work. Consumers didn’t want them because they were annoying. And for myself, if any retailer ever sends me a coupon without my permission they are really going to piss me off. So back to the story at hand…if you want your Buyer to succeed at selling ads on Mac’s DS network tell them to purely focus on great content that sells products. That’s it. Stick to that story. If your Buyer can consistently demonstrate a 5-10% sales lift through the DS network – they will have a winner. If they can’t, you will all be losers. Giddyup!

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