Sean Reilly, CEO of Lamar Advertising Co. (NYSE: LAMR), joined REIT.com for a CEO Spotlight video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
After deciding to operate as a REIT in 2012, Lamar made the conversion in the fourth quarter of 2014. “It was a long, but ultimately very fruitful, journey,” Reilly said.
Reilly said the move has generated a favorable response from investors, although he admitted that the company “has some work to do” when it comes to explaining the firm’s business model to investors.
“But as we get the word out, we’re beginning to get more and more interest,” he commented. “There are some great real estate attributes to the advertising business.”
Turning to the company’s performance. Lamar’s strong operating results are coming in part from the growth in the number of people driving, according to Reilly. Time spent in traffic increases drivers’ exposure to billboard advertising, he said, which is a plus for the company’s biggest customers.
Some of Lamar’s most significant growth as a company is coming from its digital advertising business. The firm is on track to add 200 new digital units in 2015.
“It’s a very simple value proposition for our customers and our tenants,” Reilly said. “You don’t have to change your copy. You don’t have to have any production costs. You can take your message and change it instantaneously from your desktop.”
The ability to change advertising immediately appeals to companies that want to show instantaneous price changes, for example, Reilly explained.