There's a recent boom in digital out-of-home media, from Captivate Network's elevator advertising and news content, provided via wireless flat-panel screens, to Billboard Video's wireless technology, which brings news and ads to the gas pump. That means the average person could be bombarded with commercial messages without turning on a TV, listening to a radio or picking up a newspaper.
As people's lives become more hectic and they spend less time at home with traditional media vehicles, establishing alternative points of contact is becoming essential for advertisers. The out-of-home market is reacting to that demand, and the days of massive roadside billboards are giving way to smaller, digital screens at every corner -- both inside and out.
"Advertisers now see outdoor as a collection of different means of reaching customers along the routes of their daily lives. It ends up being a continuum," said Diane Cimine, exec VP-marketing at the Outdoor Advertising Association of America.
That's the story fledgling digital out-of-home media companies -- many of which still aren't turning a profit -- are selling to advertisers, touting the reach and targeting capabilities of their individual vehicles and venues. Due to the proliferation of outdoor advertising, a $4.8 billion industry last year according to OAAA, "there is so much wallpaper that there's this need to find the new and the unusual to set it apart," Ms. Cimine said.
"You've got an active lifestyle that is continuing to grow more and more frenetic all the time and, therefore, the traditional media are having difficulty trying to reach those consumers," said Tracy Crocker, exec VP-sales and marketing at Next Generation Network, Minneapolis. Next Generation provides 42-inch flat-screen monitors -- or E*billboards -- at 6,500 locations including grocery and convenience store check-out lines, fast-food chains, newsstands and train stations. The screens have video but not audio capability, because sound would interfere with the transaction.
"We like to call it the captive pause, where they really have nothing else to do but either look at the person in front of them or look at some engaging content as well as 15-second commercials," Mr. Crocker said, adding that the average person waits in line about 30 minutes a day.
Capturing the captive audience is the mission and namesake of Captivate Network, which provides elevator advertising via high resolution, 8-by-10-inch flat-panel screens that display full-motion spots on the bottom of screens showing static news, weather, traffic and sports content.
"Once you enter your office, you are pretty much out of touch from an advertiser's standpoint," said Captivate President-CEO Mike DiFranza. "We see ourselves as a complement to the way people are advertising today, not a replacement. We're extending the day for the advertiser."
Captivate has 600 office towers under contract, representing 30 million business professionals; 90 currently are installed. Through partnerships with international news providers such as CNN and Reuters, as well as local media outlets such as the Boston Globe and the Chicago Tribune, Captivate feeds geographically specific content to its screens using wireless technology.
Mr. DiFranza said content sets Captivate, based in Westport, Conn. apart from traditional outdoor. "This is not trying to be a billboard; no one wants to be stuck in a box just with an advertisement," Mr. DiFranza said. "People want something to look at. . . . In our environment, literally, people are in a box. It's the advertiser's ultimate dream."
Billboard Video provides wireless news content interspersed with 15-, 30-, or 60-second spots at gas pumps via 12-inch screens equipped with both audio and video. The Dallas-based company promotes the gas station as a prime place to connect with today's on-the-go consumer -- 70% of Americans go to the gas station 1.5 times a week and spend an average of 6 minutes at the pump, said Billboard Video CEO William Hall.
Perhaps most advanced in its customization capability is CashPoint, which delivers spots to more than 15,000 ATM screens across the country at banks including Wells Fargo Bank and Key Bank. The Seattle company, which began in 1994 printing color ads on the backs of ATM receipts and now distributes 15-second audio and visual spots on the transaction screen while consumers are waiting for their cash, is rolling out a new system that recognizes customers' Zip codes when they insert their ATM cards.
"We are able to recognize the customer's card so we're able to queue up the appropriate advertisement for that customer," said CashPoint President-CEO J.J. Manning. CashPoint also can print out an ad or offer on receipts that correspond to the ad a customer viewed during a transaction.
"Being able to choose what ATM you deliver it in, and the time of day and day of week -- and being able to recognize the identity of the customer -- makes it the definition of a compelling ad buy," Mr. Manning said.
For example, McDonald's Corp. might advertise its Egg McMuffins to a morning ATM user while a local pizza shop may try to reach that same user on a Friday evening.
Captivate Network also enables advertisers to reach a specific audience, and its primary target is business professionals with average household incomes of $150,000. "I don't know of a better single execution that any advertiser would want on a target basis," said Michael Scheinkop, senior VP-business development access at Equity Office Properties, one of the first commercial real estate companies to sign a deal with Captivate.
FOR DUNKIN' DONUTS
Thirty-eight of the 380 commercial buildings Equity owns and operates across the country have Captivate's elevator screens.
Current advertisers using Captivate's elevator network include Dunkin' Donuts, Salomon Smith Barney and 3Com Corp. The first of those recently signed on with Captivate to advertise its new chocolate-coffee Dunkaccinno drink and promote a discount offer on its coffee-by-the-pound in 69 office buildings in Boston, Chicago and New York.
"It's reaching the most people you can in the limited amount of time that you have," said Dunkin' Donuts Field Marketing Manager Shannon Maxwell, who added the elevator spots, from Red Leaf, Boston, will reach 38.5 million people each month. According to Captivate, the average person rides the elevator 5.5 times each day, with each ride consuming 45 to 90 seconds, for a total of 5 to 10 minutes a day.
The elevator spots run for 10 seconds once every 15 minutes, and Captivate guarantees that over a 30-day period, 100% of the building population will view the spot at least once.
Spots are sold on a cost-per-person basis, and because Captivate signs 10-year exclusivity agreements with each building, it also ensures a 10-year relationship between the brand and the audience, Mr. DiFranza said.
Dunkin' Donuts' recent elevator buy illustrates that national advertisers may be interested in these newer forms of digital out-of-home media once they are convinced penetration is high enough. Mr. Crocker said Next Generation Network hit a threshold last year, with E*billboards delivering 50 million impressions a week, enabling it to sign on marketers such as BellSouth Corp. as well as PepsiCo and its Frito-Lay unit. Next Generation Network charges a CPM of $5 for E*billboards; Mr. Crocker said that's slightly more competitive than traditional billboards.
CashPoint's ATM advertiser roster includes Amazon.com, Burger King Corp. and Subway Restaurants. Billboard Video, which has only five of its 10,000 contracted gas station locations installed, does not yet have any advertiser agreements. But it plans to charge a CPM of $20, as compared with broadcast and cable TV, which usually sell at a CPM of $20 to $49 for adults.
Andrew Korniczky, president of outdoor media buying and planning company Poster Publicity, New York, said the boom in new alternative media "is a direct correlation to the ever-expanding universe of how to target your audience when they're on the move out of their homes." That is becoming even more critical as broadcast and print media become more fragmented, said Mr. Korniczky, who currently is considering elevator advertising for one of his clients.
Chuck Thompson, senior VP-group media director at Universal McCann, New York, recently bought some placements in Captivate's elevator network for client Salomon Smith Barney. "It was just too unique not to really look hard at, and we really didn't find any reasons not to use it when talking about our consumer base." He added, "The out-of-pocket cost for the potential positive intercept points is very appealing."
CashPoint recently took its electronic ad delivery system to ATMs a step further with the launch of CashPoint Select, a Web-based platform allowing agencies to place media buys online. Media buyers "can actually set up a campaign to run in a specific part of the country, with visuals at a specific time, down to the neighborhood," said Mr. Manning
Despite media providers' proclamations of reach, targeting and efficiency, one harsh reality remains -- they're not making any money. The business models are simple: The media companies provide the screens at no charge to the venue in which they are displayed, and then rely on advertising-generated revenues, which will be shared with the building owners, franchise operators or banks. At this point, however, there is nothing to share, as none of the four privately held companies -- Billboard Video, Captivate, CashPoint and Next Generation Network -- is turning a profit.
"Unfortunately, whenever you have a new arena like this, there's going to be a shakeout," said OAAA's Ms. Cimine. "It's a little too early to tell which ones will or will not survive."
`BELLS AND WHISTLES'
According to OAAA, so-called "alternative outdoor" accounted for only 6% of the $4.8 billion outdoor advertising industry in 1999, and Ms. Cimine estimated that only about 1% could be attributed to these kinds of digital out-of-home formats.
While some critics complain of advertising overkill from new venues that make ad exposure virtually inescapable, the OAAA's Ms. Cimine said that's not the case with outdoor. "You've got hundreds of television stations, thousands of magazines and God knows how many Web sites," she said. "This media, relatively speaking, doesn't have the sort of clutter at all that other media do."
She added, "These newer forms are not going to replace other forms of advertising, but they damn well are the bells and whistles that all those that want to put together knockout programs are looking for."