The Verklin-moderated panel closed the Traffic Audit Bureau’s Forum, the first formal dialogue the out-of-home industry has had with Association of National Advertisers members. The day’s agenda was ambitious; panels covered topics from out-of-home creative to next-generation measurement and frequently ran out of time for questions from the crowd. Mr. Verklin, who sprinkled his panel with “lightning-round” questions, such as “What’s the last book you’ve read?” and “Name the historical figure you most admire,” charged in by asking the chiefs of Clear Channel Outdoor, Viacom Outdoor and JC Decaux if they thought they were prepared for the new media and marketing landscape.
“All of us, [Viacom’s] Wally [Kelly], Jean-Luc [Decaux] and Kevin Reilly [of Lamar] if he were here, are in a position right now where the most important challenges facing other media, with the way technology is enabling consumers to avoid advertising in other media, plays to our strength,” said Paul Meyer, CEO of Clear Channel Outdoor, which completed its partial initial public offering Nov. 11. “While other audiences are declining, our audience by nature and the way society works will continue to grow.”
“We’re about 10 years behind Europe and other marketplaces,” said Mr. Decaux, who co-operates the world’s second-largest outdoor company. “That’s not to say we can’t catch up to what we’re doing in France.” Mr. Decaux’s favorite market to learn from, he said, is the U.K., where out-of-home’s share of total advertising spending has risen from 4%-5% to just less than 10%.
Despite the bullishness most out-of-home sellers have on their medium, Mr. Verklin asked what they thought of the recent news in the Los Angeles Times about Regency Outdoor, which has been accused of posting illegal signs and bribing public officials.
“You see an article like that that says to the advertisers in the audience, ‘Gee, is this really a medium that’s ready to sit up at the grown-up’s table?’” Mr. Verklin said.
“It’s unfortunate for our industry,” said Mr. Kelly. “Obviously there are two sides to every story and we haven’t heard any response from the Regency people.”
Mr. Decaux was a bit more uncompromising.
Time will tell
“There’s no smoke without fire,” he said. “We have to together with our media planners and buyers make sure those people aren’t given the benefit.”
On the subject of losing the New York City street-furniture bid, estimated to be valued at $20 billion over 10 years, Mr. Decaux said: “If there is a price that’s too high, we can’t go for it. Future will tell if the price that was paid was the proper one. One of us was right, one of us was wrong, I think I’m right, but time will tell.”
The bid was won by a Spanish company called Cemusa, whose executive had flown in from Madrid for the TAB Forum. Although the bid is in the final stages of negotiations, Cemusa offered New York City a sweet deal, including $1 billion, installation of thousands of new pieces of street furniture, a share of ad revenue and 20% of the ad space for its own agencies and to bundle into corporate-partnership deals.
Much of the outdoor industry’s future hinges on a progressive new measurement system, introduced to national advertisers earlier in the day by TAB CEO Joe Philport and media-planning consultant Erwin Ephron. Mr. Ephron emphasized the importance of adding VAI, or visibility adjustment index, to the system.
“The difference between the opportunity to see the ads and people actually seeing the ad is growing bigger,” he said. “In TV, the equivalent to VAI would be eliminated Nielsen reported viewers who do not have their eyes on the screen when the commercial airs.”
TAB is currently conducting VAI in two markets by using eye-camera units to capture a person’s response to a sign. Variables include, among other things, the size of the sign, the distance from a roadway and the angle of the sign. Early results of the new measurement system, including demographic data layered on top of the VAI-adjusted traffic counts, will be reviewed and evaluation in winter 2006 and formally released later that year.
“No other medium has adjustments for opportunity to see the ad,” Mr. Ephron said.
Proving the cash
New measurement initiatives are great, but how do you go from proving cars that pass a billboard to proving cash that billboard generated? That was the charge from Jim Spaeth, the former Advertising Research Foundation chief who’s now a founding partner of Sequent Partners, a metrics-based consultancy.
Mr. Spaeth talked about the move by many advertisers, especially in the package-goods area, to use marketing-mix models to determine the return on investment they’re getting from their media spending.
Out of home has a disadvantage when it comes to such models because the models aren’t necessarily media inclusive -— that is, if a medium hasn’t already been in the plan it can be hard to break into it. Additionally, marketing-mix models typically require weekly audience data by market to match to sales data by market. “Don’t shoot the data, it’s yours that is lacking,” Mr. Spaeth said.
“Budgets are shifting out of measured media and into unmeasured media and if I were you folks,” he said, speaking mostly to the out-of-home advertising in the room, “I’d be a bit outraged.”
After the meeting, Mr. Ephron noted marketing mix models typically punish the media included within them, thus leading to diminished spend on traditional media and increased spend on unmeasured media.