The two have competed for dominance in the bar advertising category for more than a decade. With this acquisition, Zoom Media gains more than 20,000 billboards in more than 4,000 venues in its "social network" -- socializing spaces such as bars, restaurants and nightclubs.
"The deal happened organically over time," said Zoom Media and Marketing President Dennis Roche. "The two companies started the bar and nightclub advertisement scenes back in the '90s, and we'd been expanding in the same market segment for some time now. It seemed like the right thing to do for both Alloy and Zoom."
The deal effectively doubles Zoom's reach, but that's not the only benefit. "Getting more real estate gives Zoom a much stronger platform from which to build their digital network," said David Yacullo, president at media-buying firm Outdoor Media Group. "It was as much a play for that as for the reach that Insite had to offer."
Digitally equipped venues
Zoom already has more than 300 venues already equipped with digital capabilities, with a plan to expand to 500 digitally equipped venues by spring. Zoom said it reaches 45 million consumers, with demographics that can be segmented by venues.
"We are buying Alloy's business and reinvesting in it. Our main goal was to acquire Alloy's reach and upgrade its network," Mr. Roche said.
PQ Media expects out-of-home-video spending to increase to $1.28 billion by the end of 2007 (up from $1.1 billion in 2006), with an additional $365 million for digital billboards and displays. Out of home is the second fastest-growing sector of media, behind online.
Mr. Yacullo said the consolidation will benefit the industry, since place-based out-of-home advertising has been a fragmented market with too many networks. "This will make it easier to plan and buy advertising space, and shore up a confused marketplace," he said.