JCDecaux's former Digital Transformation and IT Director Stephan Lavollee believes the outdoor advertising company's new VIOOH spin-off business is going to be a disruptive transformational game-changer for the industry as he takes up his new role as Chief Operating Officer at the programmatic outdoor ad-buying platform.
Launched officially today in the UK, Belgium and US but two years in the making according to Lavollee, the VIOOH platform enables media buyers to buy digital advertising inventory and have it live on Out Of Home advertising panels in the hour, and is led by former Yahoo EMEA vice president Jean-Christophe Conti.
Paris-based outdoor advertising giants JCDecaux will be offering the VIOOH service to its competitors in a bid to provide the platform for the sector, while describing how "the new platform heralds a new era of cooperation across the out of home industry, connecting media owners and buyers".
Lavollee told CIO UK that JCDecaux had been working on the platform for some time - the company's digital transformation initiatives were anticipating such a shift in the market, and JCDecaux was determined to be a leader in the field.
"This is going to transform the market," he said. "The digital transformation in this industry is happening, but at a much faster pace. VIOOH aims to become the leader in this activity between digital advertising inventory and digital media buyers."
"We want to be able to do this not just for JCDecaux, but also for all media owners."
Figures suggest that with 20-30% of outdoor digital advertising space going unsold, other players will be able to optimise their own inventory on the bidding platform with VIOOH earning fees for a licence and a slice of the pie.
Lavollee said that as the market's global leader, it was up to JCDecaux to push the industry forward, especially during a period where traditional Out Of Home advertising was being seen as less desirable for media buyers compared to mobile and other digital channels.
The CIO turned COO said that the JCDecaux board eventually came round to the programmatic ad-buying platform because of the threat of disintermediation and to make outdoor advertising a more attractive proposition to media agencies.
"It's up to the industry to drive the change," Lavollee said. "JCDecaux demonstrated two years ago that they were able to create this kind of market but at that early stage of development, while the JCDecaux board was supportive, the industry was not yet ready - the traditional way was profitable and didn't need to be revolutionised.
"What was the trigger was the threat of disintermediation and someone else building a platform and aggregating the market to the point that we would have to join it.
"The challenge is to make sure that Out Of Home media owners are still relevant and still an attractive proposition in 10 years' time."
Lavollee stressed that the new entity would not replace traditional media buyers or cannibalise traditional business models, but would be complementary by creating new revenue streams and new ways for organisations to transact. "It's not replacing media agencies at all, just aggregating Out Of Home inventory and making it easier for digital buyers," he said.
Some 55 developers have been working on the new product, with software engineers in London, India and Paris. The new VIOOH outfit is particularly lean, with not even a dozen other staff working with the 55-person dev shop.
"We're going to be very successful," the new Chief Operating Officer said.
Like many other organisations JCDecaux has been vocal about how it has been rolling out initiatives which put data at the heart of its processes, and last month set up a Data Division at a corporate level which the company said was part of the next phase of its transformation. Lavollee said that VIOOH would be able to leverage the expertise in the JCDecaux data team, which will eventually be led by a Chief Data Officer, for its own campaigns.
Preparing for disruption
At the end of 2017 Lavollee was Digitial Transformation and IT Director at JCDecaux and spoke to CIO UK about how he had been helping turn the multinational outdoor advertising company into a digital business, developing new revenue streams which do more than cannibalise its existing business - while also rather poignantly discussing preparing JCDecaux for disruption from external threats.
Lavollee had joined the family-owned $3.4 billion revenue company in 2006 as an IT project director in Paris, becoming CIO for the UK a year later and IT Strategy Director for the group in 2014. At the beginning of 2017 Lavollee was appointed Digital Transformation and IT Director, a newly-created board level position reporting to co-CEO Philip Thomas.
He described how digital advertising revenues had started to outperform its much larger portfolio of outdoor advertising panels, a shift that started to take place after the London 2012 Olympics when "suddenly everybody wanted digital".
"We went from probably less than 1% digital revenue at the start of the Olympics to more than 50%, and growing fast. Digital has really overtaken the core of activity; we have 35,000 panels in the UK where you can advertise and 4,000 are digital - but with these 4,000 we're making more money than with the rest.
"The business has completely changed."
Now based in the Paris suburbs and operating in 75 countries, JCDecaux was founded in Lyon in 1964 by Jean-Claude Decaux whose three sons Jean-Francois, Jean-Charles and Jean-Sebastien make up half of the executive board - with granddaughter Alexia Decaux-Lefort and brother Jean-Pierre part of the supervisory board. Jean-Claude Decaux, the son of a shoe salesman, died in 2016.
Lavollee said last year there had been buy-in from the highest levels of the organisation about the transformation it would need to go through.
"They didn't need any arm-twisting, they wanted the change," Lavollee said. "The problem was in changing a profitable business model. The top management knew what they wanted and were very much in favour; the challenge was how to make that happen at the local director level because, rightly, they were preserving their existing revenue."
At the time Lavollee also discussed security with CIO UK, explaining how he did not believe any organisation could truly stay up-to-date fast enough with its own resources, and how he did not see a solution to security challenges in hiring a Chief Information Security Officer.
"We are relying on external resources," he said. "We have a regular security audit and a long-term partnership with two companies who are giving their views on how we can improve our security.
"I don't want a CISO; you have to rely on more people to tell you how to do things. What matters is that you understand what they are saying, trust them, know what you want to accept from them and what you don't want - and challenge them.
"With security it's not just having a CISO to take the full responsibility. I know the CISO should be independent, but they rarely are. They should report to the CEO, but the CEO doesn't care about this so at the end of the day the CISO is one element of the IT team and then it's partial, so I'd rather externalise this."
Lavollee also described how his previous CIO and transformation roles had changed during his time at JCDecaux when we spoke at the end of 2017, and praised his team for being the platform that allowed the most senior technology executive to play more of a business role and making sure IT and digital was driving real value to the organisation.
"Five years ago, how much of my time was I spending talking to directors and CEOs? Very few, when I joined I was reporting to the finance director," he said. "Now I rely on my team to make the right decision. I try to follow them - I'm staying up to date but I build this team that I trust and then I let them do it.
"I'm planning the business, making sure what we are building is understood and is going to be used in the right way. It's no good having the best technology if it's not going to be used properly. It's coming to market too early where we're much at risk of delivering something which is very good on paper, but totally useless."
Working as a CIO in a privately-owned company, Lavollee also noted that fundamentally and unashamedly "it's about how you make more money" and that business savvy is to be celebrated as such.
Fundamentally Lavollee said that CIOs need to be the chief conduit that links enterprise digital, IT and technology services with business needs - and pre-empting the June 2018 VIOOH launch - envision disruption and how to tackle it.
"I think you have to have a link between the technology and the business," he said. "Because in the past, technology was very often managed by the finance director, and it's probably still the case in many companies.
"It's something for me which is a total nonsense today. It made sense a few years ago because IT was a cost, mostly. If we didn't take advantage of new technology in our business model - for JCDecaux we would have been dead in the next two or three years. That's a given. Someone would have done it on our behalf.
"So are all CIOs able to be this link, or do you need someone - this digital business transformation director - to do it? It doesn't really matter to me, but someone's got to do it."