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The outdoor ad — displayed on bus shelters, subways, phone booths, newsstands and billboards — has long had a reputation as a low-end form of promotion. But its biggest problem may be its perceived lack of accountability.

Unlike print, TV and radio, whose audience demographics are based on readership surveys, ratings and audits, outdoor advertising offers only crude measurements of its audience. Today, it's possible to find out, for example, how many cars pass an ad at a particular location, but not the share of 18- to 34-year-old males in those cars. Because the outdoor ad industry can't determine precise audience delivery, media planners and advertisers have difficulty gauging the value of an ad buy. “What [advertisers] are demanding,� admits Kevin Gleason, chairman of the Washington, D.C.-based Outdoor Advertising Association of America (OAAA) and president and CEO of Adams Outdoor Advertising, an Atlanta-based firm that controls 15,000 billboards nationwide, “they're not getting from outdoor.�

That may soon change. Two major media measurement organizations — Arbitron, Inc. and VNU Media Measurement & Information, corporate parent of Nielsen — are vying to devise detailed audience measurements of outdoor ads. After completing a test in Atlanta this past June, Arbitron, a New York City-based media and market research firm, announced plans to create an outdoor audience ratings service. The service will likely involve collecting travel patterns through diaries and layering the locations on top of the travel patterns to define a particular consumer's “opportunity to see� an ad, says Jacqueline Noel, director of sales and marketing for Arbitron Outdoor, an Arbitron subsidiary. The company — which received $300,000 in backing from the OAAA — expects to have the ratings tool completed by early 2003, depending on industry feedback on a prototype.

Meanwhile, Nielsen Outdoor, a newly formed unit of VNU Media Measurement & Information, a New York City-based media information services company, plans to launch its own outdoor ratings service in early 2003. The service Nielsen plans to introduce in the U.S. will be based significantly on what the company learned in South Africa, according to Lorraine Hadfield, Nielsen's managing director. Last October, when the company tested global positioning devices there, members of a randomly chosen, demographically balanced sample carried small meters that tracked their movements at 20-second intervals. This information was then matched to a map of outdoor sites to determine the participants' opportunity to see an ad.

Why the race to create an outdoor audience measurement tool now? In some ways, it's long overdue, as the stakes are rising for the $5 billion outdoor industry. Although it represents only 2.2 percent of all ad spending, outdoor has been growing at a steady clip. With average annual growth of 6.7 percent over the past five years, spending in the outdoor ad industry has outpaced that in newspapers, consumer magazines and TV, which grew an average of 3.5 percent, 5.7 percent and 5.8 percent, respectively, over the same period, according to Veronis Suhler Stevenson, a New York City-based media merchant bank. Over the past 10 years, spending on outdoor ads has risen a cumulative 97 percent. And the outlook for the next 10 years is bright. Merrill Lynch predicts that in 2012, $8.6 billion will be spent on outdoor advertising media, up two-thirds from a projected $5.2 billion for 2002.

Once a credible audience measurement tool is available, continued growth is virtually guaranteed, say industry observers and insiders. And as more upscale brands advertise outdoors, the industry's clout will be bolstered and diversified. While Anheuser-Busch and Miller are still among top spenders outdoors, other brands in the top 20 in 2001 included Apple, Cingular and the Gap. Among the newer categories to show up in outdoor ads are insurance, retail and finance. Other new players on the outdoor operator side include global media conglomerates Viacom (which owns CBS, Nickelodeon and MTV) and Clear Channel (which owns 1,225 radio stations).

How well have outdoor ads performed? So far, measurements have been based on basic traffic studies involving “claimed recall,� in which consumers specify whether or not they saw an outdoor ad. More reliable numbers available through the Traffic Audit Bureau, a nonprofit organization based in New York City, amount to gross traffic numbers or circulation counts. “Traffic counts are hardly enough,� says Susan Nathan, senior vice president and director of Media Knowledge, which runs Universal McCann's media research group.

When it comes to outdoor ads, many media planners actually dismiss the numbers offered by the industry. For example, an ad's cost per thousand (CPM) is based on traffic counts, which media planners are skeptical about, often believing just 25 percent of the reported traffic count, says Erwin Ephron, a partner at New York City-based media and marketing consultancy Ephron, Papazion & Ephron. So a planner may assume that for a location with a reported traffic count of 80,000, only 20,000 people pass by the site a day. “Those [numbers] are based upon smoke,� says Ephron.

That's not to say accurate data on the outdoor audience is nonexistent. Scarborough Research, a New York City-based market research company, for one, gauges the percentage of adults in a market traveling certain roads, their commuting habits and even the auto dealerships where they are most likely to shop. For instance, almost 1 in 5 (18 percent) adults in the Atlanta area has a commute that lasts 30 to 59 minutes. Half of all adults in the area travel on Interstate 285 — for any purpose. This information tells media planners which roads in the market are heavily trafficked. But though half of Atlanta adults who travel on Interstate 285 may pass by an ad, the data doesn't reveal how many people actually see it or who those people are. Of Arbitron's ratings system under development, Martin Aliaga, the OAAA's research director, says, “It will elevate the credibility of our numbers and look at outdoor as consumed by a consumer — from the consumer's point of view.�

Industry leaders are hoping that a better audience measuring tool will help encourage wider acceptance of outdoor advertising. A nagging obstacle has been its perception as primarily a local medium. Local businesses have always known the power of their markets, so they weren't that interested in audience data. Only after mergers in the late 1990s left the majority of the industry in the hands of three operators (Viacom, Clear Channel and Lamar Advertising) did it shift to a more national outlook, according to Cynthia Evans, chair of the New York City-based Advertising Research Foundation's Outdoor Council and senior partner of the New York City-based Medialab division of Media Edge: CIA, a media investment organization owned by WPP.

The industry also faces an image problem: Ads aren't always kept clean. Lack of maintenance and the risk that graffiti will deface an ad have caused some advertisers to shun this form of marketing. “There's no way you're going to put Chanel perfume on a newsstand like [those sheds in New York],� says Jean-Luc Decaux, co-CEO of JCDecaux North America, a branch of French company JCDecaux, the world leader in outdoor advertising. In fact, many advertisers do not want their brand associated with something as plebeian as a bus shelter, says Evans.

However, JCDecaux has taken steps to create outdoor ad vehicles that high-end brands consider viable. Seven years ago, the newsstands in San Francisco were graffiti-covered wooden barricades chained to trees at night. JCDecaux offered to buy, replace and maintain all the newsstands to create a vehicle for premium outdoor ads. The new kiosks are columns that carry ads on two sides; the third side has a door that opens for the newsstand vendor. When the stands first launched, most advertisers wanted only a few panels downtown for two weeks, says Decaux, and they complained that they were too expensive.

But Calvin Klein, Inc. apparently saw the potential of the medium in December 1995. The company bought up the ad space on all 115 newsstands in San Francisco for the month before Christmas. As soon as the perfume ads went up, the phone started to ring. Marketers wanted to know what Calvin Klein had bought and said they wanted to buy the same thing. “The concept has been extremely successful over the last five years,� says Decaux. “Why? It's simple. It delivers the audience. The format is standard. It's backlit. It's well-maintained. It's got great locations. And if you combine all that — that makes a great medium.�

More such offerings throughout the U.S., says Decaux, would spur spending on out-of-home advertising and ultimately grow the base of the outdoor ad business. To that end, his company is developing the street furniture business in the U.S. Come 2003, it will introduce 2,000 bus shelters in Chicago, bringing 4,000 new ad panels to the Windy City. (Before, there had been no bus shelters in that market.) As better offerings become available or are created in top markets, it should become easier to sell nationally, says Decaux. But the lack of audience measurements is still a source of client resistance. “There is no tool available that you can take to a client and say, ‘You have to buy 50 boards in New York to get proper coverage,’� he says. “Right now, you can't go to your client and say, ‘I've got this measurement system that will tell you how you'll do.’ Once that's available, I think outdoor will be a lot better received by marketers.�

Outdoor advertising can also be a way to reach people who are not big consumers of traditional mass media, such as TV and newspapers. When the American Cancer Society wanted to reach underserved and low-income women in Michigan who were eligible for free cancer screenings and treatment, Meridian Advertising, a Troy, Mich.-based advertising agency, ran ads on bus shelters and public phone booths in urban neighborhoods, where the majority of the women who were eligible lived. So far, the year-long campaign, which launched in October 2002, has surpassed expectations. “We're thrilled,� says Gary McMullen, vice president of corporate communications for the American Cancer Society's Great Lakes division. “We're getting over 100 calls a day, where before we fielded under 10 a day.�

To promote brand awareness and differentiate itself from other energy companies, London-based BP, the largest oil and gas producer in the U.S., chose to go outdoors as part of its multimedia campaign. Research had shown that the oil industry is not highly regarded, says Dave Welch, BP's director of advertising. So the company mounted its “Beyond Petroleum� outdoor campaign, created by New York City ad agency Ogilvy & Mather. At least 36 billboards were deployed in New York, Washington, D.C. and Chicago last August (and were to stay in place through December). High-impact marquee or foot traffic locations, such as Times Square and a point of entry to D.C. from a major artery in Virginia, were chosen to reach an audience of opinion-makers and create buzz. Some of the billboards and bus shelter ads exude more attitude than is typical of the industry, with slightly tongue-in-cheek messages. One reads: “Solar, natural gas, wind, hydrogen. And oh yes, oil.� Research has shown that familiarity with the company, favorable views of it and a general awareness have all increased, relative to the industry as a whole. “We're very pleased with the results of the campaign to date,� says Welch.

Still, while Welch's initial reaction is positive, he does contend that measurements of outdoor ads leave something to be desired. “I would be happier with outdoor if it had more detailed audience results,� he says, noting that most of the data is based on impressions, which makes it hard to compare the medium with TV or radio's detailed audience ratings. “We as advertisers, always hunger for information that gives us more precision about the value of certain ad vehicles.�

The expectation of an audience measurement tool has brought new optimism to the outdoor ad industry. Says Tom Teepell, chief marketing officer of Baton Rouge, La.-based Lamar Advertising, “We're looking forward to the day we'll be considered on a level playing field with other media.�


Local ad sectors spend the most on outdoor advertising.


Local services and amusements 12.8%
Public transportation, hotels and resorts 11.4%
Retail 10.0%
Media and advertising 8.8%
Restaurants 7.8%
Automotive dealers and services 6.6%
Insurance and real estate 5.4%
Financial 5.3%
Automotive accessories and equipment 4.9%
Telecommunications 4.7%
Source: Outdoor Advertising Association of America
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