Digital Outsider: John McMenamin, Ripple
Digital Outsider: John, you're a veteran of the first place-based media wars back in the early 1990s. We saw a lot of high-profile casualties back then -- NBC On-Site, Turner's Checkout Channel, the McDonald's Channel. What's different about the business today that's fueling such tremendous growth?
John McMenamin: The problem is that it was putting linear television in public places. It was the whole concept of captive television. Consumers were leery of that. What's changed since then is, No. 1, technology which transforms all media. And what we are able to do is customize content between TV and the Internet. We are now able to deliver content to a location based on a very specific Internet address. The second driver is consumer adoption between the end of the Turner-type place-based networks, and now, when the Internet came along.
During that window, consumers saw that they could go to their Yahoo home page. They would be getting the crawls across their television set. And they would be getting information on their cell phones. They saw all the different ways to get information, and they said, this works for me. Consumer adoption to receiving information the right way at any point in time.
DO: Clearly the consumer has changed. Has Madison Avenue changed as well?
McMenamin: I don't think that Madison Avenue is looking at this as a square peg in a round hole. They are involved, and they want to be more involved in out-of-home video. That's where the transitional metrics are integral in terms of getting them to feel more comfortable with this. And what [the Out-of-Home Video Advertising Bureau] is doing to make this happen.
At the beginning of the day you have the home. And at the end of the day you have the home. If you can find the way to find those buckets in between, then you have a legitimate way of delivering information to consumers.
DO: Tell us about Ripple. How is it positioned in this market?
McMenamin: Ripple is a little bit of all three. It's a technology company in that we've built a hyper-targeted delivery system. It's a content aggregator, working with programmers ranging from ESPN to Yahoo Sports. And we are a distributor in that we distribute it in specialty retail locations.
We have a local content strategy, a regional one and a national one. You can be at Avenue X in California and we can tell you what movie is playing in the vicinity -- and in a different location a mile away, we would be telling you about another movie playing in another theater.
Our focus groups show us that the consumer feels this is their local content. That drives a lot of trust. Then it goes up to regional and national. But it is our local content that makes them feel this is their local community and their local content. That's a big differentiator for us. And it all starts with content.
DO: Before Ripple, you were working for Dow Jones & Co. Why would you leave an established company like that for a start-up like this?
McMenamin: I love start-ups. If you think about where I've been -- at Turner's place-based networks, which was a start-up division within Turner; then iVillage, basically during the start-up phase; and then NBC Internet -- my history is very much about start-ups.
DO: In a nutshell, what's the value proposition for national advertisers?
McMenamin: The value proposition for Ripple is that we are in small footprint establishments specifically, and we are in lifestyle locations where they have high household income, and the lowest quintile viewers of television. We're also in an environment where people want to be. They're places they go to sort of treat themselves, as opposed to, I've got to go to Costco, or I've got to go to the supermarket. They want to be in these places. There's a true dwell time. Nobody is doing anything else other than the fact that they want to be there.
If you think about living room TV, this is kind of what they're doing in our environments. They're doing nothing else but dwelling.
DO: What is your strategy for acquiring distribution partners? Content partners?
McMenamin: We're pretty full of content partners now, about 30 of them. Noah's and Einstein bagels. Coldstone Creamery. We're doing very, very well on the distribution front. We want to build out a national lifestyle network that will have coffee, juice and other high-profile locations.
DO: Tell us about the AdSpot system. What is it?
McMenamin: AdSpot is part of the technology platform we developed. It allows very local advertisers to come in. If you're a local florist, you can come on to our Web site and see where your flower shop is and where our outlets are and you can swipe your credit cards and place a buy. It's just another way for local advertisers to use this platform. Like Spot Runner. The local advertising is important for another reason. It brings that community feel to our network. Right now we have an 80/20 split of national/local revenue.
DO: What's the next Ripple effect? Where do you see this going next?
McMenamin: By the end of this year, having our lifestyle distribution line pretty much built out into 2009, a national network reaching 50 million people per month. And then our quick serve network, reaching 4,000 outlets and about 50 million people.
We've got about three or four things we're looking at, but they won't be multiscreen TV in big-box situations. It's all about intimacy and dwell time. The three criteria we look at are: transactions, frequency and dwell time.