Advertisers are pursuing people wherever they are. That’s why two digital “out of home” advertising firms are merging today. Danoo, which operates flat-panel ad displays in Starbucks cafes, is acquiring IdeaCast, which operates ad screens in health clubs and on airplanes. We recently wrote about how Danoo is expanding by sending promos from its digital displays to cell phones via Bluetooth.
The purchase price was not disclosed. National CineMedia (NCM), a movie theater ad company and the prior owner of IdeaCast, will take a significant stake in the combined company, as well as Danoo’s big investor, Kleiner Perkins Caufield & Byers. Kurt Hall, CEO of NCM, will join Danoo’s board. The combined company will be called Danoo and will have 75 employees. IdeaCast and Danoo will continue as separate brands.
The acquisition is part of a consolidation that has to happen in a very fragmented market, said Aileen Lee, chief executive of Danoo in San Francisco. Ad agencies are undergoing consolidation themselves. They want to invest in digital advertising, mainly because TV audiences are shrinking. The advertisers need to find where people are and hit them with ads in those places. Since consumers are bored out of their minds in places like the Starbucks queue or the gym, they’ll watch ads.
Danoo has digital displays in five major metropolitan areas and is installing them in 40 of the nation’s biggest airports. Lee says the company can reach about 15 million consumers a month. But that audience isn’t necessarily big enough for some advertisers, and Danoo’s reach has been more local than national. IdeaCast reaches about 15 million consumers a month through its national ads on airplanes and on the TV sets atop exercise bikes and ramps in gyms. Putting them together gives advertisers a chance to reach a national audience through one network, Lee said.
The consolidation trend was evident when two gas-station ad firms, Outcast and Adtek Media, formed a joint venture so they could reach a larger national audience. Lee said that, although there’s an ad recession, the opportunity for digital out-of-home ads is big and untapped. Hence, Danoo has been able to grow on a small base as digital out-of-home ads take share from traditional media.
IdeaCast has deals with airlines such as JetBlue, Frontier, and Continental Airlines. Danoo, founded in 2006, has rivals such as Ripple, Channel M and Captivate.