NEW YORK (AdAge.com) -- As the traditional outdoor companies struggle with declining local revenue for the billboard business, the digital-out-of-home industry is just beginning to shape its sales model. Enter CBS Outernet, the subsidiary of CBS Corp., which uses repurposed CBS network content to anchor a digital-video-ad network in 10,800 retail locations.
The company is teaming up with SeeSaw Networks, a digital-out-of-home company that aims to help marketers and agencies plan and buy their campaigns through a customized technology platform.
CBS Outernet has signed up as SeeSaw's first media partner, a sign that the Tiffany Network's digital-out-of-home offshoot is taking a more targeted, lifestyle-oriented approach to its media sales as opposed to the mass-reach, major-market deals at its traditional counterpart, CBS Outdoor.
CBS Outernet comprises 1,500 grocery stores, 4,300 GameStop stores and 5,000 AutoNet TV Locations, a diverse lineup that makes it hard for advertisers to buy horizontally but easier to plan vertically through the SeeSaw planning tool.
Virginia Cargill, president of CBS Outernet, said there are occasional demographic overlaps in the network's disparate audiences that advertisers will be able to identify through SeeSaw's technology. GameStop, for example, is generally targeted toward males 18 to 34 but is experiencing broader traffic with the family-friendly appeal of gaming systems such as the Nintendo Wii.
"Because the grocery network was perceived as moms and GameStop was perceived as young men, they're very different networks. But at the same time, we're seeing a common thread through this. Is there a Hispanic buy? Can we hit moms during the Christmas season?" Ms. Cargill said. "If I'm MasterCard, I might say I want to hit everybody who buys gifts, may do different dayparts. We now have the ability to cross over our networks and find the commonality."
Broadcast networks syndicating their content across disparate digital-out-of-home networks has become a trend in recent months, with ABC and NBC also active in the sector. CBS's approach is markedly similar to that of NBC Everywhere, the digital-out-of-home network launched by the Peacock Network last year in taxis, gas stations, sports arenas and other venues geared primarily toward the New York market. NBC Everywhere also employs a lifestyle-based approach to its out-of-home content strategy, seeking out content partners and advertisers who can help make NBC content contextually relevant.
"At the end of the day, it's about bringing value to that experience," Mark French, NBC Everywhere's senior VP-general manager, told Ad Age in October. "If it's a line in a checkout counter, or someone pumping gas, are we lowering the wait time in that specific experience to that consumer? If so, then we'll make it part of the NBC Everywhere portfolio."
What's not yet proven about broadcast networks' digital-out-of-home investment is its ability to replace TV dollars or enhance them on a cost-per-thousand-viewers level.
Ms. Cargill said marketers have become increasingly interested in buying CBS Outernet in recent months but are spending only in pockets, as opposed to long-term, multimillion-dollar buys due to economic constraints.
"We're still seeing a lot of testing," she said. "Clients are saying, 'Gee, I want to be on your network. Let's do copy testing, dayparting, let's see if we can combine this with that.' The agencies in the shopper-marketing group are starting to engage in different ad models. We know the 30-second commercial isn't the best way to go about it, so there's a lot to be determined about how much time do we need, whether it's video, Flash or billboard ads."
Yet more marketers experimenting means more growth for digital out of home at large. Veronis Suhler Stevenson and PQ Media are still predicting single-digit growth for the sector in their recently revised 2009 mid-year report.
"The fragmentation, digital disruption, all these things that are really impacting the traditional print and broadcast markets are actually a positive for the out-of-home-media space," Patrick Quinn, CEO of PQ Media, told Ad Age. "Because they're using digital technology to create higher revenue and a higher margin revenue, those things are actually positive for out of home."
Peter Bowen, founder-CEO of SeeSaw Networks, said, "Clearly if you are a marketer today, you're being asked to do more with less. Digital-video advertising provides advertisers and agencies the ability to reach people while they're out and about very cost effectively."