What you need to know:

• Cartology has acquired Shopper, including more than 2,000 digital panels and a team of 50 people.
• But more than 200 of the shopping centres in which those panels are located contain no Woolworths.
• Cartology Managing Director Mike Tyquin says that doesn’t bother him – Shopper will continue as normal, and next year it will become way to extend Cartology’s customer journey and build brands.
• It is also a crucial way to access non-supplier budgets, which US retailer media networks have been pioneering.
• But Tyquin says it’s unlikely Woolworths will ever show ads for non-suppliers in its stores – a car ad in a Woolies, for example. He’s had calls from car companies interested in doing so.  

More than 110 of the shopping centres in which Woolworths now owns digital out of home screens are home to only Coles supermarkets, raising questions about how Cartology handles the ad inventory amid conflicts and centre-specific restrictions.

In a deal that went through earlier this month, Cartology agreed to buy Shopper for $150 million. That included about 450 shopping centres, more than 2,000 panels, and a team of around 50 people.

Analysis shows 216 of the centres in which Shopper owns screens have just a Woolies, but 21 have both a Coles and a Woolies, and 115 only have a Coles. Another 94-odd centres have neither.

This is interesting because there are strict rules for out of home screens in retail environments, usually set down by the operators of the centres. Harvey Norman could not, for example, place an ad for a Samsung mobile phone on a screen directly outside a JB HiFi store.

Industry experts questioned whether Cartology would carve off troublesome screens or double down to forge relationships with non-consumer goods brands, expanding its client roster. Cartology’s Managing Director, Mike Tyquin, said it was the latter.

Stanhope Village in the NSW suburb of Stanhope Gardens in Sydney’s west is one example, housing 12 Shopper panels outside an ALDI, a Kmart and a Coles. Moonee Ponds Central in inner-city Melbourne has 18 screens, an ALDI, a Kmart and a Coles. Birkenhead Point Brand Outlet, a shopping centre in Sydney’s inner west, has 20 Shopper panels – and a Coles.

Interestingly, all three of these examples are retail centres operated by property group Mirvac.

Tyquin: Demand gen, brand building

Cartology will use the Shopper assets to access brand budgets and build demand generation among suppliers, Tyquin, who cut his teeth in the OOH industry at now oOh!Media-owned Adshel and EYE, said.

“Most out of home assets have some level of category or client restriction. That's not new news to me, given my background. We'll be respectful of that,” Tyquin said. “We'll be very respectful of those commercial arrangements that are arm’s length, those standalone arrangements with shopping centre assets.”

Cartology bought Shopper for two reasons, he continued. The first was it added an extension to customer journeys – the second was it would allow access to new clients.

“We knew what we were buying, and we'll obviously be in that space and we'll offer those what we call endemic brands, supplier brands, that opportunity. But the other place we will move into is something that our American counterparts have done, which is non-endemic, non-supplier brands,” Tyquin said.

“They're in that space, it's a space we'll move into very soon from a digital and an online perspective, and it's still something, and this is a really important point, that won't stop with Shopper. So automotive, banking, telco, other finance, travel, home goods – all of those things will still be able to access the shopper inventory.”

It’s “really unlikely” non-supplier brands will be allowed to advertise on the Woolworths network. “We don’t think there’s a logic there from a customer perspective to see a car ad,” he added. “There's no doubt we've got brands who would love to play in store. We get calls all of the time. Car makers, you name it, they'd love to be in that environment… if I wanted to be really blunt about it, probably what I would say is we've made a decision for the sake of our customers, so that's the best thing.”

Shopper lagging: SMI

Woolworths announced its plan to acquire Shopper on July 18 this year. Interestingly, Standard Media Index figures show agency spend with Shopper lagged well behind the rest of the market in July and August.

While oOh!Media, JCDecaux and QMS rose 35.6 per cent, 27.6 per cent and 35.5 per cent respectively, Shopper’s revenue from agencies fell by 3.7 per cent.

Against a sector average of 28.5 per cent, Shopper fell 3 per cent in August, banking $3.29m after recording $3.39m the year before during lockdowns. Tyquin said this wasn’t concerning, nor was it a message from the advertising market which has not spent much – through agencies – in Cartology so far.

“If you look at the two-year view or the three-year view and look at the amount of share that Shopper has taken over those three years and the rebalancing of audiences in market, there was probably inevitably going to be some resettling in terms of revenues across the industry,” Tyquin said. In August 2021, transport networks, CBDs and airports were empty. Shopping centres were still busy. “Logically, there was always going to be a spring back for the category. So I'm not concerned. When I looked into the forward revenues, but we didn't own the business in August, that's the other point to make. Having spent time with a team about where the forwards are and what they've got to do in Q4, I'm actually very comfortable with where the business is trading at the moment.”

Agencies, rivals watching

Making a play for non-supplier brands will likely mean more interactions with agencies. “We do have question marks about the panels outside Coles,” Magna’s Lucy Formosa Morgan said. “We know they want to extend out their current footprint beyond FMCG, we’re assuming they’ll need to talk to agencies as well. We’ll be interested to hear. We’re here.”

One out of home exec said the Shopper acquisition was always going to be complex. “My gut is you’re going to have this Woolworths retailer media offering, but a bunch that sit aside from that. Whether that’s sold as a separate offering or packaged up and made available to other retailers, it’s an interesting situation,” the exec said. “Cartology might look to divest that patch. When you pick up a network that large, there are going to be outliers. It is an interesting lease profile as well. Shopper are starting to get to the end of leases. Tenders picked up seven years ago are probably due. A lot of people are watching Woolies to see how they play it.”