Outdoor searches for just right spot

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When media giants Viacom and Clear Channel Communi-cations each bought a leading outdoor ad company a few years ago, media observers predicted a flood of fresh ad buys packaging TV, radio and outdoor boards.

Buyers had visions of seamlessly integrated campaigns and bulk-rate discounts for major cross-media deals involving outdoor, and financial analysts saw bottom-line value in consolidating resources.

But so far very little has come of such hopes.

"I've been waiting around for these great package deals to come our way, but nothing's happening," says John G. Miller, exec VP-local print and out-of-home media for Media Edge, New York, the large media-buying operation for WPP Group's Young & Rubicam. "Now we're starting to go to the media companies telling them what we'd like to see, hoping to get some genuine value and real cross-media connections out of all this consolidation."

The wheels are starting to turn in cross-media deals involving outdoor. This summer Viacom launched a new selling initiative code-named "Infinity 2," packaging radio, outdoor and transit media. "The goal is to integrate out-of-home campaigns by integrating the audio with the visual," says Jodi Senese, exec VP-marketing for Viacom's New York-based transit advertising unit, TDI, which is playing a key role in the initiative.

"It's a new thrust, enabling a campaign to be timed for release all at once on three media platforms, sharing one theme and usually linked by a promotional element like a sweepstakes reinforced by radio," Ms. Senese explains. Southwest Airlines has inked a deal combining radio and outdoor to get multiple impressions, says an airline spokeswoman.

After the initial anticipation of favorable deals fueled by consolidation, many buyers of outdoor media have become wary of such package deals, fearing a loss of value and effectiveness in out-of-home media. Their biggest concern is seeing outdoor media being treated like a commodity or merely "added value" in big broadcast media buys.

"When we first heard about cross-media deals, we were intrigued, but then we began to realize there was no guarantee we were going to get an advantage in doing these deals and it could end up being led by broadcast to the detriment of outdoor media," says Connie Garrido, senior partner-director of non-traditional media at MindShare, New York, WPP's media buying agency that serves Ogilvy & Mather Worldwide and J. Walter Thompson Co.

PUSHED VIACOM'S ACQUISITION

The potential for cross-platform deals involving outdoor media helped drive Viacom's 1999 acquisition of Outdoor Systems for $8.7 billion. The deal linked Viacom's empire of broadcast and cable TV outlets and radio stations owned by Infinity Broadcasting with a network of North American outdoor ad locations, now totaling 117,000 (Infinity Outdoor claims up to 1 million out-of-home media locations worldwide).

Similar hopes accompanied Clear Channel's 1997 acquisition of Eller Media, combining Eller's 125,000 outdoor ad locations with Clear Channel's 800 radio stations and 19 TV stations."

IT LOOKS GOOD, BUT DOESN't FLY

But what looks good on Wall Street doesn't necessarily fly in outdoor advertising, where the medium's impact varies significantly from market to market and new forms of out-of-home media are constantly evolving, making such buys more complex, says Kevin Gleason, president of Atlanta-based Adams Outdoor Advertising, the nation's No. 4 outdoor ad company with 15,000 locations.

"Cross-platform media deals turn media into a tonnage, commodity type of thing, and out-of-home media is precisely the opposite of a commodity these days," Mr. Gleason says. "Media is a strategy, not a commodity, and it varies in every market and location and for every audience."

As the march toward consolidation continues among media companies, many media buyers agree that cross-platform deals eventually will become more prevalent and it's time for both sides to look for options and advantages in package deals.

"If media company consolidation is here to stay, then cross-platform deals will become a much more common way of doing business five years from now," says Andrea MacDonald, president of MacDonald Media, a New York-based agency specializing in buying out-of-home and non-traditional media. "The question is when and how these deals will come into play. So far we haven't been given any incentives to do these deals, and we're definitely looking for situations that give us some kind of plus. So far, proposals I've seen for buying outdoor together with other media tend to favor the seller."

The outdoor industry has evolved from mostly billboards a decade ago to an increasingly complex mix of traditional large billboards, urban wallscapes and smaller signboards in airports, on public transit, in telephone kiosks and in shopping malls. The out-of-home networks claim to deliver highly targeted audiences, customized to achieve specific media planning objectives, say out-of-home media experts.

"New York is very dense with smaller signboards that deliver certain types of audiences [and] using fewer large billboards, while suburban markets rely more heavily on traditional billboards whose impact varies a lot from city to city," says Scott MacDuffie, senior VP of out-of-home media at Zenith Media Services, New York, a joint venture between Cordiant Communications Group and Publicis Groupe.

FLEXIBILITY IS KEY

For Zenith clients including Toyota Motor Sales USA and its Lexus Division, Verizon Communi-cations, and General Mills, Mr. MacDuffie says the flexibility of being able to pick and choose specific billboard locations is crucial to executing sophisticated media plans.

"Package media deals treating outdoor locations as generic boards everywhere make me nervous, because I want a lot of flexibility of locations in each deal I make, and I have to negotiate these things very specifically," says Mr. MacDuffie.

Clear Channel Communications is working to promote cross-media deals on a case-by-case basis through an internal group called the Synergy Group, says Bill Hooper, a VP at Clear Channel Outdoor. "We have the best of both worlds, being able to offer buyers local outdoor opportunities but also having corporate resources so a buyer can sit down and consider a range of options," he says. Mr. Hooper didn't cite examples of any major cross-media buys, however.

Media buyers say they're amenable to talking about cross-media deals but only if there are incentives built in, because such deals require more negotiation time and approval than a normal buy.

"I might have to go to five different brand groups at a client to work out a cross-media deal, and I want to know there's a reason for this, because I can negotiate good rates already; that's what we're good at," says Mr. Miller of Media Edge.

The future for cross-media outdoor deals depends on how profitable such deals are for outdoor media companies, says Ms. MacDonald.

"A few years from now, cross-platform deals might be the right solution for a lot of major advertisers," she says, "but if you look at history, consolidation is often followed by fragmentation. A lot depends on whether these big media companies make money selling cross-media deals. If not, you'll see big media conglomerates start to sell off the very [outdoor media] companies they bought a few years ago."

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