Guest Commentary: Out-of-Home TV Ads Finally Coming of Age

Jan 27, 2008  •  Post A Comment

The first “upfront” presentation by NBC Everywhere held earlier this month to tout its alternative digital assets marked a significant coming of age for the out-of-home (OOH) TV arena.
I would suggest that it also helped to reverse the long-established historical trend of Big Media steering the ship, illustrating how NBC Universal and other conglomerates are following entrepreneurial pioneers such as IdeaCast, National CineMedia and Gas Station TV into the thriving OOH video ad-spending space.
NBCU and CBS Corp.—the latter having spent $71.5 million in cash this past September to acquire SignStorey, a distribution company that allowed it to put ad-sponsored programming and promotions on retail store plasma screens—see the value of a business projected to soar in the U.S. from $1.3 billion in 2007 to $2.3 billion in 2011, according to eMarketer. At last count, it had an installed base of 630,000 screens at 97,000 sites, fueled by declining prices for flat-panel LCDs and the emergence of Internet Protocol and wireless Internet technology.
As the digital, video and wireless technologies continue to reconfigure outdoor advertising in coming years, media planners cite reports predicting the OOH market will avoid the crippling effects suffered by traditional advertising sectors in a rapidly changing media environment. In fact, OOH is projected to benefit from changing media consumption trends more than any other sector except the Internet.
I think the OOH industry is poised to prosper even further from the entrance of NBCU and CBS. Their arrival provides validation of the growing interest by advertisers and media buyers of reaching consumers when and where they make purchases.
Having NBCU and CBS in the game lifts the industry’s profile, which benefits media’s new players. Comcast, DirecTV and other significant platforms are agnostic. They want to distribute large content offerings to different kinds of venues, whether they come from a company like IdeaCast or NBC Everywhere, to reach people with money at point-of-purchase locations so they can be reminded of big-ticket packaged goods as well as services and special promotional offers.
That’s not to say that every company can find a successful formula. I believe the overall status of today’s OOH business closely resembles that found during the early years of the Internet, when marketers were left to figure out which services did and did not provide value. For example, by initially catering to the marketing needs of leading advertisers seeking to engage busy consumers at ideal locations, such as health clubs, IdeaCast secured desired news content from MSNBC, CNBC and CNN. The strategy worked and IdeaCast has expanded to 1,000 health clubs in 140 DMAs, added ESPN to its programming lineup and moved into the transportation sector, with plans to become the largest OOH video platform in the U.S. in the second quarter of 2008.
In order to succeed, we at IdeaCast believe that companies need to pass the six-point litmus test we have used to grow our business (along with using research from Nielsen and some common sense):
Dwell time. Size up out-of-home viewers; are they viewing content on the alternative broadcast platform for long periods of time? (According to a recent Arbitron study, 70% of health club members watch television while at the gym and spend an average of 40 minutes actively watching per visit.)
Sight, sound and motion. Does the specific network platform provide marketers with the ability to seamlessly redeploy their video assets while maintaining the integrity of their brand (without requiring costly re-editing)?
Scale. Does the platform support a national campaign rollout, or at least to a wide region?
Demographics. Does the audience profile match the needs of the brand? Data from the Arbitron cinema advertising study “2007: Making Brands Shine in the Dark” noted that movie theaters reach more than 124 million, or 45%, of Americans 12 or older in a month; in its health club study, Arbitron found that 75% of health club members are between the ages of 25 and 54, with 61% living in a household with an annual income above $100,000. Are you investing your ad dollars in cinema, at health clubs or toward other similarly valuable OOH video networks?
Relevance. Does video in a particular OOH environment enhance the experience, for example, by being entertaining, informing viewers of important news developments or helping the audience pass the time?
Engagement. Do credible third-party metrics show the audience is engaged by the spots? At what level of recall?
In short, anyone competing in the OOH video space today needs to understand how to market to a moving target.
Jason Brown is the New York-based president of sales and marketing for IdeaCast.

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