NEW YORK (AdAge.com) -- The world's largest beverage company has added another feather to its cap: media owner.
Late last year, Coca-Cola started rolling out its Digital Network, a group of 28 electronic billboards in 27 markets that the company owns and operates. The company leases the space from outdoor advertising companies such as Clear Channel Outdoor and Boardworks, but it acquires and owns the 14 feet by 48 feet LED screens.
"The reality is, for us, it's an adventure that we wanted to own," said Beatriz Perez, senior VP-integrated marketing for Coca-Cola North America. "As a company looking for different ways to get our message out faster and make it more relevant and targeted, we started to look at different approaches."
It's an unusual approach for a brand marketer in an area that's growing fast. The Outdoor Advertising Association of America estimates several hundred digital billboards are coming into the market per year, with a current total of about 1,800 nationwide. Altogether, there are some 450,000 billboards in the U.S. This year, Ms. Perez says Coca-Cola is looking to add between 15 and 25 boards to its network.
Jeff Nowlin, VP-operations at Boardworks, said it's the first time his company has simply leased space to a marketer that owns its own boards.
OAAA spokesman Jeff Golimowski said he's not aware of a marketer that has purchased boards for a variety of markets in the way that Coca-Cola has. Though, he added, it's not unusual for brands to make exclusive deals for boards in areas that are geographically significant, near a stadium that a brand sponsors or a company headquarters, for example.
Ms. Perez said the advantage of owning the boards means the company can advertise only Coca-Cola brands 24 hours a day, seven days a week. Outdoor companies that run digital boards would, in many cases, be bound to run a variety of ads because of the nature of national advertising buys. Some companies, such as CBS Outdoor, do offer exclusivity, however, Mr. Golimowski said.
The flexibility of the boards also makes it easy for Coca-Cola to offer screen time to its retail partners. For example, a test program with Kroger is now under way. Special-edition Daytona 500 cans available in Kroger and Kroger-owned stores are being promoted on the boards in cities including Atlanta, Dallas, Las Vegas and Phoenix through the end of this month.
"We both benefit," Ms. Perez said. "The partner benefits by increased traffic to their locations. And for us, the benefit is an increased presence in the stores and extra promotion."
Coca-Cola has also promoted its charity partners on the boards, most recently rotating in messages to support The Red Cross' texting campaign to benefit Haiti and the 25th anniversary "We Are the World" recording to benefit the island nation. Events that are sponsored by Coca-Cola, such as Nascar races or local football games, have also gotten board time in some markets.
Another advantage of owning the boards, Ms. Perez said, is that Coca-Cola can keep a close eye on how different messages are received, as well as apply what it learns to other marketing vehicles. It's now researching the optimal number of messages per daypart, for example, looking at how much communication consumers can handle before tuning out. Those learnings will inform the brand's digital strategy, its work with in-store networks, such as the Walmart Smart Network and, potentially, even its Facebook presence, Ms. Perez said. "It's informing a lot of other communication vehicles," she said. "This is not just about outdoor billboards."
Coca-Cola spent $31 million on outdoor media in 2008 and $30 million in the first 11 months of 2009, according to Kantar Media. Spending in outdoor will remain steady, according to a Coca-Cola spokeswoman, though, in general, there will be some increase in marketing spending to accommodate the new boards. The boards themselves are funded by marketing budgets and capital expenditures.
The company declined to comment on the cost to purchase the boards. One digital billboard company exec estimated the cost at $250,000 per board, given the size and resolution. Coca-Cola is aiming for 20 mm resolution with the boards, though there is some variation.
The boards are run by Marsys Digital, Miami, which manages the placement and rotation of the messages. Four messages are run per daypart, and there are six dayparts in a 24-hour period. Each message flashes onto the screen for about 15 seconds. Messages in the morning hours are likely to include Minute Maid or Simply, while afternoon messages focus on Coke or Sprite. After work, Powerade or Vitaminwater are added into the rotation to target the after-work workout crowd. Creative for the boards is handled by the various brands' agencies.