Digital & Dirt
00:25:05 · Ian Dallimore, Bobby Switzer
[00:25:05] S0: So you basically created a Hollywood set. That's one of the reasons why I stayed with Lamar in the very beginning. I was like, wow, that's cool. They even have a Red Bull refrigerator. [00:25:16] S1: So that was to keep everybody awake. This was at the beginning where we didn't have a lot of units. And so now we have so many... I mean, there's so many innovations that happened that I had no idea was happening. I mean, they they were doing a lot of things in the NOC, and and Rachel runs that, and she got it down to exactly how many people you needed in there to all these different things to control the content. We wanted to push that control out to the customer. And how do you then control it from them putting on anything? She developed a lot of those techniques in that process. So, you know, it is the the sexy side of our business, but remember that as far as revenue, it's in the 20% of our revenue. And as far as number of boards, I think it's about 3% of our boards. So it's sort of the tail wagging the dog a little bit, but I think it is the future of the medium. But we don't... We're still doing innovations on the static side.
00:26:26 · Ian Dallimore
[00:26:26] S0: Yeah. The old network operating center. It was definitely a really cool spot, and now it's used for more efficient things. But I think it set the standard because in the beginning a lot of other competitors that came into the space, they leaned more on the vendor of the screen and a lot still do today. Daktronics has a great network operating center package that you can buy. But Lamar, like a lot of our IT stuff, you decided that it was best for us to control and to manage it. And I know that was the selling point. Hey, we are selling you the product. We've developed the back end as far as how to get your message live to the board. So therefore, if a screen goes down, if your content's not displayed correctly, we're going to own the customer portal, the login, the entire experience, and it's going to go up as fast as possible. And now obviously the industry has evolved and everyone has set those standards, but you kind of set that into play. One of the questions that I also had was how quickly after Lamar launched its first digital in Pittsburgh and then in Baton Rouge did competitors follow? I know you had mentioned Clear Channel in Cleveland. Was it a year, two years? How far advanced were we ahead of our competition on this?
00:27:40 · Bobby Switzer
[00:27:40] S1: I would say we were probably a year and a half to two years ahead of Clear Channel. We don't tend to toot our horn, but they came out hard in Cleveland and Albuquerque, and I congratulate them on that. But by that time, we already had probably 40 boards. And in 2000, I think, four or five, we had a a regional managers meeting, at which time I challenged the regional managers to put up 300 digitals over a three year period, and it was an interesting conversation from let's go, let's do it, let's get it done. And it can't be done from the other spectrum. There's no way. You can't get it. It's not legal. So the proof's in the pudding. I think we're closing in on four thousand now. And our competitors, the independents that we go against... Because we don't really go against the clear channels. I think we have a few places in competition with them, but I don't really worry about what they're doing. We believe that we're out ahead. One of the things that you touched on is that we do all the in house sort of knock. We also do in house maintenance of all the signs. So we're the only company that I know of. I'm not probably wrong on that, but we have the largest digital display maintenance company in the world, and those guys are the best in the industry. One of the things that we really wanted was... Now I'm gonna take you back a little bit, which we don't have anymore are flags. And flags were when we had paper and they would crack and start to peel, and so we eliminated that. But when you have a digital and one module's out, I consider that a flag. And the longer it sits there, the more it just hurts our image. And so that was one of the things that we wanted to work on is to have the highest quality out on the street at all times. And that's what having your own maintenance and tech guys. And those guys are called digital techs, and they are the cream of the crop of our industry.
00:30:03 · Ian Dallimore
[00:30:03] S0: Yeah. So a couple of things on that for our listeners. I'm giving you the high level version, but our NOC says, hey, panel one, two, three, four is down. The market, local market is also identified, and each one of our digital screen sizes are made up of a certain amount of modules that go in. But now today, it's not just roadside digital. It's screens are all over the space. And you guys have paved the way for all these other different media types. Did you ever envision in the beginning like, hey, this is going to be the future of not just roadside billboards, but but this is gonna become the future of the industry itself.
00:30:43 · Bobby Switzer
[00:30:43] S1: Well, one of the questions I have that always... The people are asking me are, when is it gonna be all digital? And I don't think it'll ever be all digital mainly because the static board is a very effective board, and it will always be there. Now is there gonna be more digital? I think there's probably, you know, the definition of, are we a digital company or we're a static company? And it'll come when we're 50% of our revenue comes from digital. You know, right now, 3% generates 20% ish, I guess. So would that mean that 10% would produce 50%? That may be. I think that as you add more and more digital, the rate will not be robust as it is today, and occupancy won't be as high as it is today. And you just gotta watch that. So... And one aspect, should we just take all the boards down and put them... Put all digital back up? And we did models of that. And every year, Lamar would have a regional manager meeting. And every year, I would have Bill Rip, who is our sort of smartest guy in the room, and I'd have him develop these models of if we did this, what would this? And every year, I would throw it out at the regionals to sort of be provocative and try to evoke some wow factor of, man, that's cool. And so one of the things that was very interesting is when hurricane Michael came through and knocked out Panama City, we decided to not build back any just static boards. Now I'm sure there wasn't one or two that we did that, but it was the real goal of... Because all the boards are on the ground, let's increase the number of digitals and to see what happened. And we we did the scenario of what does it take to get back to that same revenue that we had before the storm. And what we found was if we did the digital, it was quicker and it was less expensive to get back to the same revenue. And so today, I haven't followed the numbers, but it would be interesting to follow exactly what Panama City done and where they are, because you run the risk of putting too much digital too quick, and you can destroy your rate and occupancy. So it's interesting. Little old Panama City is probably one of the highest percentages of digital in our footprint.
00:33:41 · Ian Dallimore
[00:33:41] S0: Yeah. And it it has evolved over time, but as we continue to evolve as an industry with digital, we're inviting, whether we're... We like it or not, we're inviting new tech companies to come into the space and help improve improve it. And it's our job at Lamar, at Clear Channel, at OutFront, or these other place based companies to invite these tech companies to come in and say, hey, how do we evolve Bobby Switzer's thought twenty years ago to today? And a lot of different companies have come out of it the way that we sell. Not only do we continue to sell it local, regional, and national, but now we have introduced programmatic over the last eight years. And one of the things that we're going to celebrate over the next three months of twenty years in digital is a timeline and all of the great campaigns that have revolutionized the creative aspect. And that... That's one of the things that I think the industry can thank you for and obviously the team behind you over the years. But I'll kind of leave you or ask you one last question. Where do you see the future? I know you don't like to talk about where we are today, but where do you think the industry is headed towards the future in this sense? Is it gonna be a hologram on the side of the road? We've seen drones flying that produce LED lighting. Is there something that you have in your back pocket?