Advertisers vie for the eyes of elevator riders

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One day soon, your commute from the lobby to the 35th floor could be sponsored by Lycos or even the local candy shop. That's because companies from specialty ad ventures Captivate Network and Elevator News Network to Otis Elevator are moving the Net and video onto the lift, giving advertisers a chance to reach a captive, lucrative audience.

These companies are installing video screens that can stream rich-media content and ads. But for now, the audience won't be able to control what they see, and audio is purposely silent; testing found audio to be too intrusive.

Captivate Network (www.captivatenetwork.com), the U.S. leader in the category, is bringing the Internet to office-building elevators, with programming and rich-media ads displayed on high-resolution monitors.

AT THE MERC

A major Captivate installation took place in early January at 10 and 30 South Wacker Drive in Chicago -- an office complex that encompasses the Chicago Mercantile Exchange and two, 40-story towers. Captivate also has installed monitors in Boston office buildings, bringing its total monitors to 200 at sites that include New York and Stamford, Conn.

Captivate's contract with Equity Office Properties Trust, the nation's largest publicly held office-building owner/manager, calls for quick expansion in major markets this year and beyond.

The trust and e-tailer 800.com advertise on the service, as do a number of local businesses. Captivate said it was negotiating with larger-name, mainly online businesses. Captivate said it shares an unspecified amount of ad revenue with building owners.

Captivate founder and CEO Michael DiFranza considers elevators the perfect environment for marketers. In an elevator, he said, riders don't have to look at the screen, but almost all of them will simply because not much else happens between floors.

It's this captive audience that has content providers such as AccuWeather, The Boston Globe, The New York Times and Reuters joining the Captivate bandwagon.

"This may be the only medium where we can absolutely guarantee that we will put people in front of our screens each and every work day, or they didn't go to work that day," Mr. DiFranza said.

Captivate declined to disclose specifics of how much it charges advertisers, saying rates are negotiated individually based on audience reach and ad frequency.

According to the company, the average office-building employee is on an elevator for about 45 seconds per ride and takes roughly six trips a day. While on the way up or down, workers see a piece of information on screen for 10 seconds at a time. Concurrently, a separate ad -- typically for an e-commerce provider -- runs at the bottom of the screen. Ads can be customized for a given building.

Mr. DiFranza said the average 5,000 to 7,000 employees in 1 million-square-foot office tower -- Captivate's preferred setting -- traveling in elevators six times a day add up to big numbers. By the end of this year, Captivate expects to have 300 buildings under contract, and figures in five years it will reach 150 to 180 million riders a month.

"We can deliver three or four impressions per trip," Mr. DiFranza said. "It's an absolute impression machine."

$100,000 ANNUAL INCOME

But it's the office-building demographics that will get marketers to really take notice, he said. Some 40% of Captivate's tenant base works in the financial arena -- many are accountants, attorneys, bankers and venture capitalists. Their mean annual income, Mr. DiFranza claims, is in the $100,000 range. These professionals could see an ad in the elevator, walk to their PC (typically equipped with high-speed Net access) and buy something online from the advertiser.

"You're talking about a tremendous demographic group," Mr. DiFranza said, "both in terms of decisionmaking and the money and the power they wield."

At least one advertising professional agrees.

"You could develop a buy that would include the heaviest concentrations of those people," said Tim Davies, VP-group media director for Arnold Communications, Boston. "It would be a very targeted medium for an audience that's pretty affluent."

COMPETITION LOOMS

By this summer, however, Westford, Mass.-based Captivate could face Canadian heavyweight Elevator News Network (www.enn.net), which plans to get in on the ride in the U.S. Displays in elevators also have competition in CNN, for example, which is shown on elevator TV screens in selected hotels.

Toronto-based Elevator News Network has marketed its hardwired product -- as opposed to Captivate's wireless offering -- for three years and boasts more than 500 monitors installed in Canada.

President-CEO Peter Irwin says ENN is negotiating with real estate owners and management companies of prime office properties; he hopes to enter the U.S. market by this summer, establishing beachheads in New York and Chicago.

"We offer high-resolution, full-motion broadcast quality video, running 30 frames per second, like TV," said Mr. Irwin. In fact, he said, many ads are adapted from TV spots, such as those for advertisers Jeep and Xerox Corp. ENN declined to discuss ad rates.

ENN gathers content from the Internet, wire services, newspaper and TV sources.

"ENN is seen to deliver some level of dominance," said Terry Sheehy, president of Starcom Worldwide Canada, a Toronto arm of Leo Burnett Co. that has bought ad time for clients. "We get very good receptions from our clients, especially if they have the system in their buildings."

In addition, United Technologies Corp.'s Otis Elevator Co., the world's largest elevator maker, soon will offer its own Web service called e-Display, in partnership with content provider Next Generation Network and IBM Corp.

Ron Beaver, director of strategic sales for Otis, said the company will start installations this June -- again, targeting financial districts in New York and Chicago.

Mr. DiFranza seemed unfazed by potential rivals.

"Riding in an elevator without Net access is like driving a car without a radio," he said. "Essentially, we've invented the equivalent of the car radio for the elevator."

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