Woolies forks out $150m for targeted ad company Shopper Media
The grocery retailer told investors on Monday that its retail media business Cartology had inked a deal to buy Shopper Media, which has a network of more than 2,000 advertising screens in 400 shopping centres across the country.
Shopper Media chief executive Ed Couche said the deal was a strong result for the company’s investors but was also a melancholy moment in light of the death of his friend and co-founder Ben Walker earlier this year.
Shopper Media was launched by Walker and Couche in 2015 as an out-of-home advertising business that uses data points, including free shopping centre Wi-Fi to help target digital billboards to consumers. The company was backed by private equity firm Fortitude Investment partners.
“Today is bittersweet in that we’ve got a fantastic result for our shareholders and our business, but it’s not lost on me that there’s a big gap…a great personality and the key founder of the business, and my good friend, is not here,” Couche told The Sydney Morning Herald and The Age.
Couche said Woolworths had first looked at Shopper Media in 2019, but conversations about an acquisition were put on hold during the COVID period.
“We always knew that we’ve got a really fantastic business. It scrubs up really well and it has a blemishless balance sheet.”
Cartology managing director Mike Tyquin said the deal would diversify Woolworths’ existing retail advertising business, which is currently focused on “fast-moving consumer goods” suppliers.
“Almost all of [our] networks are in-store or owned assets…
This opportunity will allow us to offer a physical, offline network proposition,” he said.
Woolworths launched Cartology in 2019 as a retail media business which offers brands advertising opportunities across its stores as well as in its company-owned magazine.
Couche said that Woolworths’ access to consumer insights would also be of benefit to Shopper Media.
Woolworths’ interest in out-of-home media comes as the industry starts to bounce back after COVID-19 related disruptions.
Industry group, the Outdoor Media Association, outlined earlier this month that year-to-date media revenues are up 19.5 per cent to $478.6 million. This is 3.9 per cent behind the revenues seen pre-pandemic in 2019.
Shopper Media has around 50 team members and a presence in Brisbane, Sydney. Melbourne, Adelaide and Perth. In a statement Woolworths chief executive Brad Banducci said the company was excited to bring Shopper’s expertise in to complement the Cartology team.
“We have got to get through to completion yet —the businesses will operate on a BAU [business as usual] basis,” Tyquin said.
Woolworths shares dropped 1 per cent at the start of Monday’s session to sit at $37.12 at 2:45pm.
Source: Emma Koehn