Boon for Billboards

Digital Leads Growth for Out-of-Home Ads

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NEW YORK ( -- Not all media sectors are forecast to have a gloomy 2009. Digital out-of-home is one of few media still experiencing real growth, finishing 2008 with an 11% increase in ad dollars and going into the new year with the majority of venture capital and private equity dollars for media start-ups.

Advertisers have been able to cut costs by repurposing their 30-second TV spots in new and different ways on screens in taxis, malls, gas stations and other venues.
Advertisers have been able to cut costs by repurposing their 30-second TV spots in new and different ways on screens in taxis, malls, gas stations and other venues.
So why is it boon time for billboards? It's because digital out-of-home has gone far beyond the static posters the outdoor industry built its business on, and advertisers are able to cut costs by repurposing their 30-second TV spots in new and different ways on screens in taxis, malls, gas stations and other venues.

Patrick Quinn, CEO of media forecasting firm PQ Media, estimates that digital out-of-home will continue to grow 9% in 2009 from the $2.43 billion it grossed in 2008, even as traditional outdoor declines 1%. He also cites the increased ease of measuring consumer activity away from the living room as a point of appeal to advertisers and investors.

"The secular trends driving growth in the out-of-home space aren't going away. People are spending more time outside the home and commuting more, the youth market continuing to multi-task and spending more time outside the home," Mr. Quinn said. "The networks really targeting these people and the technology being used to reach them is seen by both agencies and brands as more engaging and reaching them in captive locations at periods of time."

Suzanne Alecia, president of the Out-of-Home Advertising Bureau, said the last six months have been particularly game-changing for the industry as agencies such as WPP Group's Group M and Publicis' Mediavest start to equip their outdoor and even TV buying groups to plan and buy digital out-of-home as part of a larger integrated strategy. "The agencies are no longer talking about it. They're actually moving people around and creating divisions, investing man hours and time into this industry."

Although digital out-of-home offers advertisers an opportunity to tweak their TV ads, an increased amount of brands are creating dedicated spots for outdoor media networks. David Leider, CEO of Destination Media, a digital out-of-home company which includes Gas Station TV, said about 35% of the campaigns that ran on his network in 2008 were custom-created, with package-goods marketers starting to pick up some of the slack from top categories such as automotive and retail.

"DVR penetration is going up in major markets as high as 50%, and with people filling up their cars for 5 minutes at a time, it's becoming more efficient to reach them at the pump," Mr. Leider said.

Bridging the gap
Venture capitalists are also seizing the growing opportunity in digital out-of-home, particularly with companies who can help advertisers bridge the gap between social media and compelling content that complements the venue. Retail-based media networks such as Danoo, Channel M and Access 360 have all recently secured rounds of multimillion dollar funding, on par with what online ad networks were seeing as recently as a year ago.

Jon Chait, a partner at digital-media investment firm Dace Ventures, said digital out-of-home is becoming more attractive to investors as operational costs drop and the ad market matures. "These companies have dynamic targetability, whether it's digital or video-delivered, and they have ownership of the space they're in," he said.

One of Dace Ventures' recent investments is Locamoda, a mobile-based technology company that marries social networking with out-of-home interactivity. A new Clear Channel digital billboard in Times Square, for example, features a game called Jumbli that pedestrians can play on their cellphones or on Facebook. AT&T recently sponsored the game, and signed up 300,000 fans online and in Times Square for the game in the span of a month.

Locamoda CEO Stephen Randall said the metrics from the Jumbli game indicate that advertising can be welcome in a mobile, out-of-home setting under the right circumstances. "If you give the user control over the media and you're not afraid of the user, you're potentially doing what they do on the web," he said. "It's the right approach between something that's right for the user and not too scary for a brand. You just want to give the user the loudest voice possible."

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