OOH Insider - Episode 025 - John Laramie, CEO of Project X (formerly ADStruc)

Welcome to the out of home insider show, the loudest voice in out of home. We're bringing you tips tricks and insider insights and today's guest Inc. Number 65 CEO, John Laramie, project X, formerly abstract. John. Thanks so much for being. Yeah, no, it's great to be here. Thank you. Appreciate it. Absolutely.

So where we'd like to start with every guest is about that origin story because out of home is such a unique community. It's really the most fun, medium it's meant to entertain. And everybody's origin story is sort of unique. Tell us a little bit about how you came to start ad struck and ultimately why, why project X exists?

Yeah, no. And, and again, thank you for, for giving me and the company an opportunity to talk about what we do. And, um, you know, I think the, the fun for us, uh, as we started the company, uh, 10 years ago now, um, and. Uh, my co-founder Josh and I were working at a, at an Omnicom agency doing something completely different than advertising.

We were in brand licensing. Um, and I started doing things on the side. Uh, I started my own little agency on the side, just like the sort of like brand consulting think tank. Like I just really always want to do things on my own. Um, and, uh, you know, one of the clients that I worked with was spin, which was, you know, It was ping pong club that then became spin, uh, which is now a global brand.

Um, and so those were a couple of my friends and we started doing things together. Um, and then I started working with some brands and one of the first brands that I started working with wanting to do outdoor and I had no idea what it was. Um, and they were launching a L uh, linens line at bed bath and beyond in the city.

And they wanted to be. On media, outside, bed, bath and beyond. And so, you know, I, I did what I had to do. I got on a bike, I rode around the city. I figured out where inventory was. I called the media owners. I stitched together my own media plan and sold it into the brand. Um, and it was that experience where I said, wow, this is really broken.

I can't believe this, this inven, you know, this industry in the. Media that you see everywhere, certainly in our bubble of New York city, but obviously in a lot of other places in the United States and in the world, um, operates in such a fashion. And so I just spent basically a year, a year and a half while still employed at this Omnicom agency.

Diligence like doing a ton of reading, understanding the way the business worked. Uh, I probably spoke to four or 500 outdoor companies, cold call outdoor companies, um, cold called car dealerships and brands and asked how they did their outdoor and spoke to agencies. And like really just sort of started a map with this base look like, and I had this small little studio apartment, um, in Greenwich village that I was living at at the time.

And I basically plastered. Whiteboards or, you know, uh, all over the, all over the walls and just kept all my notes. Um, and that's when my co-founder Josh and I just said, listen, like there's something here. Um, and let's go, let's go after it. Um, you know, and those were the early days of, of ad tech, like early, early days.

Um, and what we saw as the opportunity was to build software. That I'm connected these pieces of data and connected this, you know, bumbled up workflow. Right. And, and really be able to think about, um, the long-term view of how introducing software into the way you plan and buy media in the outdoor space can create all sorts of efficiencies around, you know, the value that you're delivering the data and the insights and the speed at which your.

You're building plans. Um, and that was, you know, that was our origin. Right. Um, and you know, you date back to 2008, 2009, 2010. Uh, you know, those were the early days of, for us, obviously in, in the outdoor space and really just seeing the excitement of media owners and brands about this, this opportunity of having everything existing one place.

And that was, you know, that's. We were just so excited about what we're building and, and, you know, ever since then, we've been really focused on what we're trying to accomplish and where. And you developed this great program, this platform that would allow agencies and planners to sort of consolidate and automate some of this process use, use the intelligence behind a lot of what we do in digital marketing, but for out of home.

Pardon me? Do you feel like there, the fragmentation within, out of home, is that a challenge for marketing technology companies that are trying to take on that fragmentation? Yeah. Yeah. In outdoors. Yeah. Without door specific, because it's a theme that comes up a lot on the show is the fragmentation. So many folks have great ideas.

They've got good technology, but we've still got thousands of individual media owners across the country. How did you deal with that challenge of putting all of these pieces together into a platform that you could use to play?

I think we paved the way for ad tech companies in the outdoor space to be where they're at today, plain and simple. The work that we did in 2008, 2010, and obviously even still to this day was fundamentally at its core about. Educating the outdoor community about why being online would be so impactful for their business.

Um, and listen, that was not easy at all. I mean, we call difficult conversations with, with a small guy too. You know, I remember my, my early conversations with clear channel and out front and Lamar and Lamar was the first, they were like, let's do this out front struggle. Clear channel thought the most. And the, the position at clear channel had was that you are going to commoditize, uh, our inventory.

And actually when you dialed back the way it was being bought, then, um, there were commoditized anyways, because at the end of the day, agencies were just taking their spreadsheet that had their logo on it and another 20 other vendors and putting it into one spreadsheet. Why don't we just collapse that process and make it easier.

And like so many more things come out of that. Um, and so it was for somebody to me, which was a horrible student, my entire life to be on the other side of this and being like this teacher, uh, trying to help the industry understand what this was going to do. Um, it was great to see that. You were able to get these guys on board, you're able to deliver a clear vision of what you're going to be able to do for them, and then actually be able to accomplish that.

Right. Um, and you know, I think today being on sort of the other side of this business, uh, you know, 10 years later, um, it's a great fruitful partnership between the value. We deliver media owners with our software and the value that we bring them from our media buying. Right. Um, and. No, I, it was not easy.

It was tough. Um, but I, but I credit it to being clear about what we were trying to accomplish. I think there are a lot of other ad tech companies that have come into this space that we're not clear about what they're trying to accomplish. Their revenue model flipped 13 times. Um, and everyone was confused by that.

Like do media, which also was in very early stages when, when we started as well. Flip their models so many times. Um, and you know, I think it really created a question to that the end consumer or user, or the customer of the, of their business, of like, who's supposed to get value out of this, um, because I'm paying for it and I'm not seeing value and I'm not paying for it.

And I'm not seeing that. So like, how does this work? And we were very clear to the media owners is that our job is to make it easier for you to sell media and to introduce, um, the buy-side, but at its core is to, to make it easier for you. And so we're not going to charge you never charged a media owner because we were focused on the goal.

Here is if you roll them all up and you bring them into one environment, you're going to be able to create a lot of efficiencies off of that. Um, and so there's no value in trial. Makes sense. And so it started as ad struck for me again. So we've got this great platform it's being licensed. Was it not being used, what ultimately led to the decision, right?

Project X was sort of a second revenue stream for, to support the ass truck business. And then you made the decision that said, Hey, we're going to pivot. We're going to go in totally different directions. So you just comments on, do media changing the revenue model multiple times. What led to you changing your mind about how ad struck and project X, you know, work together?

Question? Um, listen, we, we had. Multiple licenses. We're doing hundreds of millions a year in gross transactions through the platform. Um, but there were two things that occurred. Um, one is our learnings from watching those agencies use the platform. The other was in sort of our directional belief about where this space was going to go.

So I'll, I'll address the agency side first. Um, at the end of the day, what we were seeing was agency. Trying to basically use software, but not change the way they thought about planning and buying the media. And so it's sort of like, you know, Giving a, a car that's a manual to somebody that doesn't know how to drive a manual.

Um, and just being like probably with the radio, we put the windows up and down. That's not what this is about. This is about fundamentally changing, the way you approach media. Um, and you know, making that button green is not going to do shit for you at the end of the day. Like, and so you just started to see this, this road of feedback from multiple agencies using the platform, being.

That's not a sustainable business because the agencies are, are so compressed on margin. So their investment budget into is incredibly limited. Right. Um, and then you have agencies. Doing it their own way, multiplied across the number of consumers, you know, users you have, and you just basically cannot be like, this is the only way to fucking buy out because they're not going to do it.

Sure. So the scalability of the tech across the, uh, industry was very difficult and it was a lot of, you know, I spent a lot of time on like 2010, 2012 with the old AAA and TA at that time, basically being like you guys need to anoint a apply. And make one platform be the way that this media is bought and sold and they refuse to do it because if they need to be sort of agnostic to, you know, fair competition across this industry.

And so I respect that, but I think it held back the industry a little bit. Um, but I also think it held it back because the industry has been growing so well for those years that they're like, well, why would we change? Right. And so like, no industry has ever grown without changing. And in those times, revenue is continuing to grow on a quarter to quarter basis and 30 quarters of consecutive growth.

And so they weren't willing to make a move in that way. So, um, one was just basically seeing the business and understanding that, um, you can only get so big in a SAS business. Uh, And in its current state, right? In 2010 to 2020th, you can only get so big. I think that changes in the future for various reasons.

And we can talk about that. Um, so that's sort of the answer, the first part of the answer. The second part of the answer, um, was fed a little bit by the fact that we have so many brands coming to us. Wanting to use the software or agencies that wanted to use a software, but didn't know how to do outdoor.

And so they needed help. And so we just started to see this trend line of like this blend between a SAS business and a managed services business. Right. When you, when you look at that, coupled with what we were tracking against on the sort of feedback from the agencies, we sat there and said, you know, The future of this space or the future of our company is going to be in the merging of technology and people.

Um, and it's where we saw this massive opportunity to basically build an agency. And you know, you and I had talked about this earlier, but it's way easier for a technology company to become an agency than it is an agency to become a technology hub. And every agency in the last five years, let's say maybe a little bit more, has been trying to figure out how to build technology.

And it's, it's a DNA thing. It's a genetic thing. Like they, it is, they're not going to be able to just go find eight engineers or 20 engineers or 50 engineers in Jim in a room and be like, go build software because this is how we're going to tell you the way the software needs support. You're actually just further perpetuating the problem by having 30 years of experience of being in the outdoor world and telling people how to build software.

Right? No, we're just going to build a software to do the thing that we're already doing manually. And it's still, you know, the beauty for us was that we were a team, you know, our, the majority of our team when we started I'm, I'm not an engineer by trade, but the majority of our team was 99% engineer. We didn't know shit about the outdoor space.

So we got to learn and poke around and play and, and, and ideate on things that, that were there or weren't there, you know, had been there and learn why that worked and why that didn't work and what if it could do this. Right. And so that's where we just saw this future to be like, you know what, let's bet on ourselves.

And let's bet on the technology. We. To go be a better agency and to change the way fundamentally, like back to our vision, the way this media is planned and bought. Um, and that's when we double down and saying, you know what, screw the licenses. Let's get out of the license game. Let's use our software, let's continue to invest in our software and let's build the agency of the future.

Right. Um, and I think the, the legacy specialist. I have done a great job for the last 30, 40 years, but they're dinosaurs and like dinosaurs did great for awhile and then they weren't there anymore. Um, and I think the challenge is industry we'll see in the years. And certainly the months ahead will be the stress on those legacy specialists as business, um, because of the way they've been run and the compressed margins and the structure of their organizations, that's going to limit, uh, the number of.

Uh, in the outdoor space in the years ahead. Um, but it's going to create great opportunities for consolidation and, and, um, increasing the output of value to clients. Uh, and that's what we're really excited about with project X. And that was going to be my question. Do you foresee consolidation, which it sounds like, yes.

Do you see that consolidation coming from, within, out of home or do we start to see maybe players from outside of the. Come in. We've got under-priced value opportunities right now. Uh, I mean, shoot, if we just looked at, uh, who's it clear channels lost like 80% of their market cap, um, who who's that player are there?

Is there, is there somebody in mind that you think comes in and changes out of home through that consolidation? Or did the big guys just get. Um, so I think, uh, a bunch to, to break down there, I think on the agency side, you know, one of the things that we're really excited about is, uh, the position we're in as an organization to really lead consolidation in the outdoor space right now.

Um, so we're going to go do a bunch of M and a deals in the future, uh, and are actively engaged in a lot of conversations right now about looking at businesses where the end of the day we have, we have a shared vision, right. Which is how do you. Increase the value and the output of your service to clients, right.

If we're able to do that as an industry, um, then we're all humming in the right direction. Um, but I think the, the interesting thing here is, you know, how we can come into some of these legacy specialists that don't have technology, um, and really elevate their output, um, and increase the way that consumer, that their clients are experiencing.

Great synergies. Right? Um, on the media owner side, um, you know, coronavirus in a couple of industries are, is making businesses get bigger. The Amazon's of the world on, you know, for good or bad are going to absolutely. You know, nail they're gonna, like, if they could fire a nail out of a new weapon, they would be firing that into the coffin of hardware stores and everybody out and bed bath and beyond of the world.

Like there, all those guys are, are, um, in the outdoor space. I think it's interesting just because of the position, some of these guys are in. That, you know, I think they will largely, there will be some consolidation or, or some of these guys will split off a lot of their markets and sell them to one another.

Um, JC to Cal will probably become bigger in this space, um, outside of its airport, uh, division in the U S um, you know, I think Clair channel will move some markets. Um, but I think, you know, you can look at Lamar and say really interesting business, um, you know, the stability of their organization, the way they've run it is fantastic.

But the majority of their sales are local businesses. And so that's going to have some pressure, um, out front, right? Which major presence in, in the big markets, uh, has, you know, major revenue deals and investment deals that they've got to make into the MTA. And so it'll be really interesting to see the investments they continue to make, but those are, these are stable businesses that, um, you know, I think in the long run will, will remain.

The general identity of the way they look today for the next couple of years. But, you know, Google stepped into the space with the intersection, you know, years ago. And that's been an interesting experiment. Um, I think every business today in every vertical and every industry should be focusing on what they do well and nailing their core and protecting their core.

Um, I think it's too early for, for. Brands to step out of that and go into industries that they're not in. Um, but I think that will come in in due time. So what do you, what are you suggesting to brands to advertisers right now? It's, it's an interesting conversation. I would we're in out of home, but everyone stuck to their homes.

We know that there's still some value in some plays. What's your advice to a brand right now? Is it load up for Q3, Q4? Are there opportunities? How are you advising clients or congregation? I mean, I think there, there are opportunities now for the right brands in specific markets where, uh, they can have a contextual.

Sort of difference in, uh, that market and then the message that they're delivering to their consumers. Um, and what I mean by that is, you know, not every brand should be advertising right now. There's no question about that, but there are brands that can be communicating to their consumers in a way that they will remember that brand and the way that brand communicated during a time like this, when we all get out of this.

Um, and so I think you can build. Great trust and credibility and empathy, um, with the right messaging from the right brands, you can totally fuck that up, um, and really hurt yourself. Um, but if you work well with your agency partners, both from a content and creative and the output and the media channels, I think you can have a really interesting play here.

Um, a lot of our guidance, uh, has really just been around. What are we seeing in this space? How are brands utilizing it? What should they do about media that they had planned to run into to, and what should they be doing about me that they have planned running in Q3 and Q4? I think there is a disproportionate, uh, opinion in this, in the outdoor space today that the second.

You know, uh, our, our doors are able to open again. Uh, and were they able to go out on the streets that everyone is gonna want to be outside and everyone's going to be eating at restaurants and be traveling and going to the movie theaters? I think that's a little ridiculous. Um, I think rightfully so, a lot of people have gotten, uh, You know, the, their lifestyles, uh, and the way they have lived their life.

Um, they're gonna make some changes too. Um, and they're gonna think differently about going to movie theaters. They're gonna think differently about eating at restaurants or taking subways. I think there's going to be a lot of micro changes that happen in day-to-day lifestyles. So I don't think the outdoor industry is going to blast off in Q3 and Q4 because.

Coronaviruses, you know, we're able, you know, Trump says he's gonna open the country. Right. Um, I think the, the interesting thing is, um, on a market basis, some markets are, are easier to do outdoor and than others in a time like this, the driving markets are easier. Right. But in New York city, nobody's on the streets.

Um, the subway ridership is down like 80 some percent. Um, you know, so is there price softness? Yes. But, um, That's because there's not a great value in some of those assets. Right. Just because it's cheap doesn't mean it's a good deal. Exactly. And so, so sure. There's opportunities. Um, but I think, I think we all like our job as leaders in, in our businesses is to a, be thinking about the health and wellbeing, mental health of our, of our team, of our clients.

Um, and thinking about how do we support all of these people in a time like this, um, and outdoor will find its way to communicate that message and create support and belief. We're doing a lot of pro bono campaigns for clients right now that are just really about. Saying thank you to workers. Um, you know, being able to say thank you to their own workers who are keeping stores open.

Um, those things are really impactful and outdoor is a great vehicle for that. Um, but I, I have my doubts about how quickly this bounces back in Q3, Q4. Um, but I believe fundamentally that the media is a great channel to build trust and awareness. And brands will find their way to weave back into it. Um, so we're helping brands navigate that.

We're also, you know, media owners are being fantastic and in really revisiting or changing their cancellation policies on a case by case basis. So, um, you know, it, it helps to. Encourage the advertisers that we're planning on running Q3 and Q4 to be booking now, um, because you're going to be able to cancel the sooner we get to Q3 and Q4 and the, you know, 60, 90 days out from today, we're in an old lot more about what this world looks like and, and where we're feeling comfortable.

Um, and so brands should feel comfortable booking media now because there's probably a better price rate. You have a cancellation window, you have more viewability and what the world's going on and you're not going to run into any supply problems. If the media bounces back super hard in the industry, bounces back, definitely a buyer's market.

How would you describe the culture of project X? Yeah. Um, listen, I think one of the most important things we think about, uh, And the way we build our culture is transparency. Um, I think we're one of the few agencies in this space, uh, that really create a lack of transparency around how their businesses running, um, what our numbers are, what our expenses, what our revenue, what's our profit.

And being able to share that with the team, um, both in bonus structures and such, but also really when I think about it from helping people understand how a business runs. And I think that the biggest myths that business owners screw up is, um, you know, there are people that work at a business that don't understand how that business.

Like think if you change that, that they understand how the business works, the you can help them understand where they have impact, where they don't have impact where they should be spending their time. And, and there was returned from that. Um, that's a great investment in your people. It's obviously a great investment in your business.

Um, but fundamentally, like if, if people move on from our company, we just want them to be smarter, uh, from their experiences with us. We want them to have had a great time. Um, but ultimately at the end of the day, If you're investing in the information that you're sharing with your team, and they're using that to be smart about the way they're spending their time in the company, you're all growing well together.

Um, and that creates a fun engaging. Well, I can tell you that the culture definitely rains through and speaking with some members of the team, the, the line about it's easier for a tech, a tech company to become an agency than it is for an agency to become a tech company. It's, it's a theme that is a mantra that carries through.

And I think it's really important because. Right. Agencies typically solve problems by throwing more people at them. It's not scalable, man. It's not scalable. And it's not sustainable from an advertiser standpoint who is looking for more efficiency, more effectiveness. It's great to know that there's a partner like project X, like what you offer, how did, how did folks get in touch with.

Yeah. Um, email's pretty simple. Just John J O H n@pgxmedia.com. Um, yeah, happy to, happy to be helpful in whatever way I can. We'll make sure to link out to all of that is if this has been helpful, we encourage you to share with somebody else that could benefit John, any parting thoughts for the audience.

Yeah. Um, I didn't think I was going to see anybody for like a while, which is why I buzzed my head. Like I was back in. Uh, so you screwed this up for me, man. Now this is going to live forever, dude. I thought this was just going to be a little family secret and now everybody fucking knows 'cause I, I cut my own hair and I gave myself the fate put the back.

I don't even got to don't have a mirror the back probably list. No, but I'm just appreciate what you're doing. And, and this is a great use of, of everybody's time to be just sharing, um, their stories and their insights, but, um, really. All that I care about at a time, like this is just that our people are healthy and safe and, and supporting each other and, and being empathetic and, and thinking about ways, um, that, you know, you can help the less fortunate.

Um, and so those are all the things that, uh, you know, I just, I just hope everyone's doing well. And, uh, and that, um, At the end of the day, this is a people business and it's just about life is supporting one another. Um, and so that's what matters today. Uh, and so appreciate you being able to support us and, and us be able to return.