Marc Kidd: Getting a Lift from Digital Out-of-Home Ads
The CEO of Captivate reflects on making hard decisions and creating new opportunities during the pandemic.
“By the end of March we set a course to survive and said, ‘How can we take advantage of this time and accelerate the digitization of the network? Is there a product we can create that has a large screen on it, and also offers temperature scanning and hand sanitization?’ We introduced Captivate SCAN within 60 to 90 days.”
By E.B. Moss
Marc Kidd, CEO of Captivate, is candid about the nights he lost sleep thinking about the loss of foot traffic in office buildings when the pandemic hit. After all, the company specializes in programming the video screens in elevators. But this son of famed NCAA football coach Roy Kidd is not one to panic at the fourth down. Marc shared how the team at Captivate evolved their Digital Out-of-Home offerings to include home and play locations, with an upswing in results for sales and marketers alike.
You know something about change. Let’s start with your personal evolution.
It's been quite a ride. But change and evolution are constants in life. My father was a football coach at Eastern Kentucky University, so I grew up on a college campus. My mom was a championship baton twirler, and even today, I can still twirl a baton. After high school, the expectation was that I would go to Eastern on scholarship and be a manager on the football team. Then my dad was told that would be nepotism, and at that point, we hadn't saved for college. So, my mother's baton classes, along with the money I got from high school graduation, paid for my first semester at Eastern.
Since I wasn't able to be a football manager, I took accounting and realized I didn't really want to do that for a living. But I was fascinated by listening to radio stations coming in from San Antonio, Louisville, and Chicago. I became a broadcasting major and, after graduation, went to work for Jim Host [Ed. Note: Founder of Host Communications, a pioneering collegiate sports marketing and production services company].
And that's how I started.
Fast forward to your work in Digital Out Of Home (DOOH). You’ve said that term has been an evolution as well?
When I came in, Digital Out Of Home was really place-based networks: digital networks located in specific places. In the case of Captivate, it was in elevators, and there were others—like Gas Station TV’s located on pumps. The defining factor was really the location of the screens. Since that time, billboards companies started to use the term DOOH because they created and converted their physical spaces into digital spaces where they could change the advertising from afar.
What Captivate is today is really a digital video network that's primarily located in office buildings. But since the pandemic, we've also focused on residential, and venues engaging that same audience where they work, live, and play.
“Having been in the media world I know that you really needed to create an affinity and engaged relationship with your viewers if you’re going to create the kind of environment that advertisers wanted to be a part of.”
And how has Captivate itself evolved?
When I joined Captivate, I learned that more people travel in elevators every single day than any other form of transportation. So, the reality is, they're very much a part of the transit system. I also learned that elevators are awkward social spaces. When you get in, most people don't talk to you; they look down at their feet or their belly button. In the early days, music was introduced as a way to settle and soothe people. Over time, the founders of Captivate put in screens that were like PowerPoint presentations to engage people. People would naturally look at them, so the engagement rates of our screens is in the 90 percentile for someone in the elevator.
So, when I got there, all I had to do was to push us from static into digital video; because I understood, having been in the media world, that you really needed to create an affinity and engaged relationship with your viewers if you were going to create the kind of environment that advertisers wanted to be a part of.
You mentioned high engagement rates. It seems intuitive that the screens would enable a lot of awareness for marketers, but how do you get folks in elevators to engage so you also support performance marketing goals?
When I came to Captivate, I heard it was an effective medium for brands, but other than Nielsen ratings, we didn't really have any attribution tools. I couldn't demonstrate, in 2013, that you could touch a screen and it would take you someplace that captured information about you, and tie the person in front of the screen with the advertising on the screen to some type of an outcome.
We started working with a company called xAd, which is now GroundTruth, and they were able to geo-fence buildings. Then, we could see the ad calls coming off of the devices and we got a lot of interest from the ad community and from advertisers.
But then it started to be adopted by a number of people and Captivate didn't have this special sauce anymore. So, we created a panel inside our footprint that we call Office Pulse, where we talk to about 7,000 of our viewers every month and ask, “What do you like, what don't you like? How do you feel about the content and advertising?” That gives us a tremendous amount of insights on how people think about work today and how they react to the things we actually put on the screen. We use that feedback to guide us both on advertiser effectiveness, and in the way in which we evolve our content strategies.
Today, Captivate has a number of attribution tools. We found that Placed Foursquare was able to deliver foot traffic store lift from our locations to someplace else. We have a business relationship with Kochava that helps manage and tells us about app downloads. We also have a way to measure whether or not we're driving traffic to websites and what the lift is.
This past year, we introduced QR codes. They had been used early on, but it was kind of awkward and went so fast that you couldn’t open your QR code app to capture it quickly. During the pandemic, one of the benefits was the development of a QR code reader right on your phone. You can hold it up and it's extremely fast and effective for any kind of digital screen. We believe that builds real attribution.
Our philosophy is that we won’t claim anything in a presentation or something we show an advertiser that we cannot footnote to a third party, because I wanted to be sure we could build trust in our brand and what we stood for.
How have you been able to evolve your distribution plans in our current challenging environment?
I learned from listening to our real estate partners the reason they put Captivate into the screens to begin with; it was a way for them to engage the tenants in their building. They knew the businesses because they had contractual relationships with them. But in most cases, they didn't really know the tenants.
And so, if they wanted the tenants to turn off the lights, flush the toilets, or to let them know there was going to be a Christmas drive for coats, they used to put up posters or stickers all over the building, and it didn't look very good. And then it was quite expensive and labor intensive. So, the business proposition to the real estate community was: Captivate will give you a tool to talk to your tenants on a daily basis and manage that relationship. And that has proven to be true over almost 25 years of service to the real estate community.
“The thesis was, if we could turn [Captivate] into a video network, we can deliver to this hard-to-reach professional and be able to monetize it. And that proved true. We repositioned the business, introduced video, changed the content mix, and we thought about it more like a television network, as opposed to a digital OOH network.”
What were your first steps to go from “like PowerPoint on a screen” to be more of a media company as a service to people in elevators?
When I was first approached about the job, I thought, “Nobody cares about screens and elevators. Why would I want to do that job?” But I had been in the television production business working with lots of associations, like horse racing, rodeo, and fishing and golf communities. I found that each one had a distinct affinity market with the consumers around those sports.
And I had been working for the Outdoor Channel, which was really a B, C, and D county rural cable network, reaching men that had a $70,000 a year household income, had a $50,000 truck, had a trailer, and had a bunch of stuff. I realized then that they were a really powerful group of consumers that advertisers, for the most part, on Madison Avenue were not paying attention to; so we focused on that.
And with Captivate, I thought, ‘this is the opposite audience: urban, luxury, really, in terms of their household income levels; working busy professionals.’ So, the thesis was, if we could turn it into a video network, we can deliver to this hard-to-reach professional and be able to monetize it. And that proved true. We repositioned the business, introduced video, changed the content mix, and we thought about it more like a television network, as opposed to a digital OOH network.
Looking back, Marc, you were running a company that was primarily focused on office buildings and then the pandemic hit, and people weren't going into those buildings so much. How did you protect the base?
On March 11th, it was clear that the business was going to be hurt because our audience was going to be told to work from home and not come to the office. And I remember sitting down with our board and said, ‘we're going to have to move from managing an EBITDA business, which we've done for the last eight years, and we're going to have to focus on managing the cash business. How much do I need to have to be able to be sure that we'll be okay as a business until audiences can come back into the footprint?’
So, we debated it, and the decision was: We needed to have, probably, a minimum of 12 months cash on the balance sheet to be able to manage through, and by that time, surely this will be behind us. We needed to reduce head count and take pay cuts and preserve the business so that we had enough free cash to get through 12 months. It was difficult. We lost some good people during that process, but we set ourselves on a course to allow us to survive.
We, then, started to say to ourselves, okay, well, how can we take advantage of this time and accelerate the digitization of the network and figure out a way to help our real estate clients, because we kept hearing stories that when people came back to the office, like at the Salesforce Tower, that it could be a two and a half hour wait, like at an airport, to get into elevators. So, I asked our team to find or build a product that has a large screen on it, and also offers temperature scanning and hand sanitization. Well, it turns out one of our suppliers had such a product. We had to figure out how to load in the pictures of all the employees that would be coming into a building and then, if they didn't have a mask on, or if they had a temperature, to flag that. So, we did all this work in about a 60- to 90-day period of time and introduced it as Captivate SCAN to help our real estate partners. Fortunately, a number of them liked it. In fact, Empire Realty uses the scan in all of their buildings across the New York footprint, including the Empire State Building.
We also pushed our operations team because, five years ago, we had started the idea of having a digital network that had programmatic capabilities in it. During the pandemic, we were able to accelerate all that, working with AWS to re-engineer the network. And today, we've gone from having six or seven generations of hardware in the field to two, and we'll have a refresh that will roll out for 2022 that will be HTML-enabled, and six programmatic platforms integrated in that service. The beautiful thing about it is it's screen-agnostic, meaning, it can play on any one screen that can take a URL and put it into the space. So, it has opened up a lot of new business opportunities for us, and it'll allow us to work with other screen manufacturers where they distribute our content in places that Captivate hasn't been able to go before.
We learned early on that content was incredibly important for engaging consumers. And most DOOH is a sequential feed of ads, one after another. It is content, yes, but once you get through that initial loop, you're just seeing the same ads over and over. We wanted to really get better at content. So, we found a company in France, which we had competed against about five years ago, that distributes content in 26 languages around the world. We had an opportunity to tuck that business into Captivate and we’re pretty excited about what that can do for our business.
You mentioned the ups and downs in audience and also in the size of your business, apropos elevators. Any life lessons that you picked up from your dad about how to “stay in the game?”
I'll never forget one really, really bad weather day for a high-stakes game. I was standing by him just as we were ready to go on the field. I said, “Gosh, dad, it's raining, the wind's blowing. What are you going to do when you make a decision about the coin toss?” And he looked at me and said, “You don't worry about the things you can't control...only the things you can control.” With that, he and the team ran onto the field. That always reminds me that there are things in life you have no control over—like a pandemic. You just have to evolve and react.
And one other thing: Every year, my dad's college teams were, of course, made up of new people. You had turnover in coaches, in athletes, but the one thing that was constant was the team culture of discipline he tried to create around understanding what was necessary for them to get better.
I think those foundations really helped me realize that life is always in flux and things are always changing, but if you stay disciplined on what you're trying to do, and mindful of the culture you're trying to create, then you'll be successful.
My first day at Captivate I told the employees, “Some of you are here because you want to be, some of you are here just because you have been here for some time. And one of the things that I want to be able to do is to help those of you that want to stay here and create a growing company. So, if you want to help me, then I want to coach you and help you be as good as you can be.Those of you that don't, I would encourage you to let me coach you out into something you really want to spend your time and your passion on, because you're spending all this time at work and, if you don't enjoy it, you should go someplace you want to be—and we would work towards a plan to have you do that.”
And that's really kind of the philosophy that I try to use when I'm looking at a business.
“There was a high stakes game on a really bad weather day and I said, ‘Dad, it’s raining, the wind's blowing. What decision are you going to make about the coin toss?’ He said, ‘You don't worry about the things you can't control.’ It has always reminded me that there are things in life you have no control over—like a pandemic.”
So, you netted out with a good bench.
You get a good bench and you get to coach people up and help them be who they are. We say to employees, no one's sure how long you'll be here, or I'll be here. But we do know you want to build your brand and we want to build ours. If we can do that for each other together, while we're both involved with Captivate, then whenever you leave here, you do so with your brand in a better place. And we'll benefit from that because you've helped Captivate get better.
And things are on an upside, so to speak?
We're seeing a really steady, solid return across our footprint. I'm really encouraged about where we are as a business—and where we are as a country, in terms of being able to learn how to live with coronavirus. Vaccines for children is making that even better. So, we're pretty bullish and excited about the future, and 2022.
December 14, 2021