Clear Channel, Interspace Merger Combines 'Best of Both Worlds' -Advertising Feature

Synergy of diversity is expected to benefit airports as both units and media

Interspace Airport Advertising (IAA) is reknowned throughout the industry for their ‘work hard, play hard’ approach to managing advertising contracts at 200 worldwide airports.

Since Interspace was founded in 1974, a spirited, family-fun approach and ambitious plans have fueled the growth of the Allentown, Pa., entity that prides itself on creating a sense of place and branding for the respective airport communities held within its portfolio. Through a method that focuses on both a quality product and responsiveness to airports’ dynamic program needs, Interspace has reputably attracted large local and regional players to be sponsors within its contracted airports.

In addition to unarguable business savvy, Interspace is also notorious for workplace idiosyncrasies to include the lack of professional titles.

“Internally, we all work for each other,” explains Marianne Lieberman, who – despite no proprietary designation for herself nor her business partner and brother, Mark Lieberman – co-leads a non-titled staff of 140 airport advertising specialists. “We operate as a team and we’re all fired up.

“We do not have titles, we will not have titles and we’re going to work that way and try to spread that joy.”

Albeit unorthodox, this ‘joy’ is spreading into corporate territory as former competitor Clear Channel Outdoor Holdings (NYSE: CCO) completed acquisition of IAA at an $81.3 million cash purchase price this past July. The 17-airport Clear Channel Airports division remains, and Marianne and Mark Lieberman continue to lead the Interspace operation as an independent unit of CCO under a five-year employment agreement.

“Clear Channel has said that they love our culture and they have brought in staff members to see how they can implement some of the concepts of motivating people,” Lieberman said of the $2.8 billion ad empire which operates outdoor airport, rail, taxi and mall advertising businesses worldwide. “We worked hard and it is a huge compliment to us that Clear Channel Outdoor was interested in our little Interspace, Allentown-based company out of the cornfield. They liked some of our practices, and see how they can work well in synergy with the Clear Channel Airports product.”

Lieberman said CCO has embraced Interspace’s business model complete with teams, spirit and enthusiasm.

“Clear Channel Outdoor does a fabulous job of essentially leaving the best practices of a company intact and running them as branches,” Lieberman said, “so we will be doing that. They will be taking our best practices and infusing them in other Clear Channel branches.”

CCO is now the home to both Clear Channel Airports and Clear Channel Interspace, two branches of the same company bringing advertising services to airports.

Specific to Clear Channel Airports’ strengths and Interspace’s strengths, the goal is to bring the best practices of each company to a combined effort. Clear Channel Airports has excelled with national sales packages featuring backlit static displays and Interspace’s expertise lies in bringing local and regional advertisers into technology-based, advanced media applications themed to match their community.

Lieberman believes the benefits of integration are largely reciprocal, with an end-goal to offer tremendous opportunity for incremental revenue at airports.

“Our two business models are entirely different, and while the integration of those models into business practices is something that will take us a while to execute, airports have never been in a better position to have the best of both worlds.”

Airports as media

Lieberman emphasized that CCO didn’t simply acquire Interspace for its sales volume. “Clear Channel is committed to the airports, committed to the business model, and they want to see how much that business model can contribute across all airports. Lieberman attests that the merger was a big move for her company, but believes it to be an even bigger move for the airport industry.

“We’ve done a lot to move revenues forward, but I think it is a big compliment to airports that a company of the stature of Clear Channel Outdoor is interested in really making airports a mainstream media.”

Lieberman said, “airports need to recognize they are a media company in and of themselves competing for ad dollars against radio, tv and off-airport media.”

In the world of ad spending, out-of-home media – the category which airports fall under – is traditionally represented by a range of 3 percent and 4 percent of total ad spending annually. Airports have been a minute piece of that, but are making attempts to bring more of those dollars on airport.

“Clear Channel Outdoor’s commitment to not only to own Clear Channel Airports, but now our portfolio of airports which includes origination and destination (O&D), small and mid-size airports as well as hubs, is a sign that CCO – the largest out-of-home company in the world – wanted to be a part of the airport industry. That is a clear sign that there will be increasing exposure for airports on Madison Avenue,” Lieberman said. “Airports will, as a result, start getting a greater and greater piece of that advertising budget and that out-of-home budget.

“CCO is a big media player, and even the acquisition in and of itself has sparked interest in airports as a real media.”

Synergy to date

Since the merger, Lieberman said the Allentown outfit has been, “working fast and furiously. It is an airport-by-airport rollout, but we do have overall plans in place to begin to bring Clear Channel Airports’ national advertising into our airport portfolio and vice versa for us to bring our technology and theming and local and regional sales into their airports.”

Lieberman, with veteran Interspace employee Robert Lovell, said the Interspace team is not only working on these packages alongside Clear Channel Airports, but is also coordinating with Clear Channel billboard divisions city-by-city in an attempt to bring more advertising on airport.

“For at least half of the airports, their property borders a major highway or major throughway of some kind,” explained Lieberman. “Right across the street or highway are billboards on someone else’s property and they are making the money. Why wouldn’t the airport want to put them on their property and take the revenue?”

Lovell said development of airport outdoor grounds is a natural transition for airports.

“Now we are working with the biggest outdoor advertising company that has 185,000 billboard faces in the United States, and we have the infrastructure to build a digital billboard on airport that is facing a major roadway system,” Lovell explained.

Clear Channel Outdoor has successfully transformed its Cleveland program to a digital billboard program, and is in the process of opening a similar model in Albuquerque. While there is yet to be a digital billboard on airport, Clear Channel Outdoor and Interspace have put together combined product redevelopment proposals for both Cleveland Hopkins International Airport and San Antonio International Airport, both of which are out for RFP.

WOW™

Another product being tested is WOW™ locations, or large-scale and exclusive advertising packages.

“Interspace has taken the first step in what we would call sponsorship or naming rights in airports, which is a hot-button right now,” said Lovell. “We have been doing it, but it is now an expanded package throughout the terminal with bigger advertisers like jetbridge sponsorships, concourse naming rights, business centers and the like.”

These are big, dominant advertising packages, where, in the case of the Minneapolis/St. Paul International Airport, a major law firm has branded a giant location that clearly recognizes that they are the sponsor of the concession area. Robins, Kaplan, Miller & Ciresi LLP Law Firm represents their foundation in MSP’s Concourse C.

“Sponsorship is going to be a big issue,” Lieberman said, noting Interspace and its airports are already headed that direction and have gotten pretty far. “Interestingly, some of these models have occurred at smaller airports, and now we can export some of these ideas into larger airports.”

New ownership, original plans

Interspace has always invested capital into its airports to continue to grow revenue. While this is somewhat of a newer concept to Clear Channel, the bottom line is Interspace will continue on with this tried and true model.

Lieberman appreciates the fact that small airports are very concerned about revenue, and their opportunity to gain non-aeronautical revenue is, in many cases, more of a challenge.

“Interspace has played a more significant role in the sense that revenue is so precious in these communities, and the growth that we have brought to that revenue has two elements: Not only is it cash back to the airport, but it is also bringing these local and regional companies into the airport, which helps provide a passenger base,” Lieberman said, noting that it is almost as if major advertisers are buying a brick in the building or making a commitment that they are going to fly those airports, helping them develop air service.

“It is important that both small and large airports recognize that Clear Channel is committing to our portfolio of airports, and that is a really nice step forward.”

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