Digital technologies put time on side of outdoor advertising

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Don't be surprised if soon the same roadside billboard that showcases a steaming Egg McMuffin on the way in to work tempts with a frosty bottle of Budweiser on the commute home. The growth in digital technologies is spawning a whole new way to buy the world's oldest ad medium: in day parts.

Sophisticated LED, LCD and digital-ink technologies, which have marketed themselves to out-of-home companies, allow fully networked signs to change with the push of a button at a remote location. Instead of buying a 30-day spot on a vinyl bulletin, marketers are buying the 4 p.m. to 7 p.m. shift-or a share of a continuously rotating loop of advertisements, with the ability to change their message every hour.

This month, outdoor giant Clear Channel will test the waters in Cleveland, unveiling its first foray into digital roadside billboards. The launch, of course, follows its much publicized New York subway project, in which Clear Channel placed LED screens over the entrances to 78 stations.

Clear Channel will invest between $2.5 million and $3 million for the Cleveland project; the subway project, as is the case of many digital media experiments, was underwritten by the technology companies involved. Meanwhile, Lamar Advertising, the third-largest outdoor group, has in Pittsburgh a fully networked system of digital posters and billboards.

`THE FUTURE'

While the opportunity to sell ad space in day parts and the potential for TV-like ratings exists, the majority of advertisers are venturing into digital outdoor media as a way to broadcast multiple, instantly modifiable messages.

"There's no question in my mind that this is the future of outdoor," said Paul Meyer, CEO of Clear Channel Outdoor. "But what we're doing at this point is very carefully trying to experiment with a number of pilot projects to determine best how day-parting will work for us and for our clients."

Conservatively, Mr. Meyer estimates Clear Channel will roll out additional digital billboards in the top five to 10 markets this year. Both Clear Channel and Lamar's digital billboards broadcast static images to accommodate both existing outdoor creative and Department of Transportation restrictions on roadside motion video.

Meanwhile, Viacom Outdoor is sticking with tried-and-true vinyl roadside billboards for now-those fixtures routinely enjoy high profit margins-except for its vibrant digital displays in Times Square.

Perhaps leading the way in day-part selling are a handful of smaller out-of-home companies that offer advertising in public indoor spaces. One such company, AdSpace Media Networks, started off as a software-proprietary company before entering the retail-marketing space, powering signs in Niketown boutiques and Federated department stores.

Two years ago it refocused as a media company with fully networked motion-video plasma screens in Loews Cineplex lobbies and major Westwood Group shopping malls. Every venue's integrated displays are networked via satellite, which allows messages to change on a predetermined schedule or instantly as needed.

"If we were working with a major consumer-package-goods brand whose interest was in reaching young adults, we'd propose to run a schedule on weekends and from 3 p.m. to 6 p.m. weekdays," said John Henderson, AdSpace Media's senior VP-sales and marketing. "There's no sense in trying to reach them from 10 a.m. to 3 p.m. while they're in school."

AdSpace Media recently signed on Ruth's Chris Steakhouse, which will advertise during a 3 p.m. to 7 p.m. day part. It has also worked with broadcast and cable networks on "tune-in-tonight" campaigns, including one leading up to the premiere of NBC's "Medium." Mr. Henderson, who previously ran CNBC's sales group, notes that he's trying to "run this like CNBC ... traffic logs and schedules are very important."

Mike DeFranz runs Captivate Network, which sells advertising on 5,500 flat-panel TVs in elevators throughout the U.S. and Canada. Captivate, he said, opens up a whole new day part that out-of-home advertisers have typically shied from: the middle of the workday. "If you look at how media has been used, it's typically on the bookends of the day," he said. The network can target specific buildings and change creative by day part or day of the week. "We know you're coming back to work tomorrow so we can evolve creative," he said. "On day one we say Volvo is a safe vehicle, on day two we talk about its quality, day three concentrates on performance, and so on."

As part of a pilot project in Minneapolis, indoor/outdoor advertising company NextMedia Group has installed more than 100 Internet-connected LCD screens in the vanity areas of public bathrooms at restaurants and arenas. The test has attracted such advertisers as local TV stations, who advertise their evening newscasts during dinner, and the Minnesota Lottery, which can change its ads to reflect the most current jackpot.

right place, right time

Going digital may allow the industry, which has long yearned for a larger slice of the advertising pie, to grow its share at the expense of other day-parted media-most likely, TV. According to Outdoor Advertising Association of America, outdoor accounts for 3% to 4% of total ad spending; Stephen Freitas, the OAAA's chief marketing officer, thinks it could eventually capture 10%. The technology, he says, puts outdoor "at the right place at the right time, with other media having problems reaching audiences. ... Outdoor is not an on-demand medium. You can't choose to see it, you have to see it."

Mr. Meyer loves to point out the implications in the macro advertising mix. "All of these different media are under pressure because technological advances are threatening the old business model," he said. "But think about how technology relates to outdoor. There is virtually no advance that threatens our business-at least not for a long, long time."

Additionally, the ability to change messages on a dime has cracked open new outdoor advertising categories and allowed existing outdoor advertisers to incorporate more of their media plan into outdoor. Retailers can use digital outdoor to tout slower-moving products or advertise a short-term sale.

Bill Ripp, Lamar's area field manager for its digital SmartBoards, said financial companies in Pittsburgh are broadcasting call-to-action messages where they used to only display branding campaigns. Says Clear Channel's Mr. Meyer: "Our greatest weakness as an ad medium was not being able to react as quickly as others."

Digital advertising typically carries higher CPMs than static ones, though the premium Clear Channel will charge on its digital billboards in Cleveland has yet to be determined. It will shake out by "trial and error," said Mr. Meyer. Mr. Ripp estimated that CPMs on Lamar's digital boards run about twice those of vinyl billboards, though it varies from case to case. AdSpace Media charges a $2.06 CPM for its indoor digital signs.

Arbitron, Nielsen Media Research and the Traffic Audit Bureau are all involved in trying to create better measurement for the dynamic medium. Nielsen recently wrapped up a recent GPS-oriented trial in Chicago, the TAB is adding a "likelihood-to-see" component to its indices and Arbitron is working to integrate outdoor into its Apollo project. "To me, [digitized outdoor] is like when FM radio came out," said Joan Gerberding, VP of Arbitron Outdoor. "It's the next step."

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