Posts filed under ‘OOH’
Digital Out-of-Home to Lead OOH Growth, Soar 13.2% through 2013
Source: Marketingcharts.com
Out-of-home ad revenue will climb 4.9% from 2008 to 2013, compared to a 3.3% decline for traditional advertising, with growth driven by digital billboards, out-of-home digital video networks and alternative ambient advertising, which includes guerilla advertising, street teams and other nontraditional approaches.
Digital out-of-home spending will leap 13.2% from 2008 to 2013, and total spending will reach $4.53 billion, up from $2.6 billion this year, according to Media Life. Total out-of-home spending will reach $10.28 billion in 2013.
Video ad networks, including screens in office buildings, health clubs, fast food chains and gas stations, will make up the largest portion of digital out-of-home spending in 2009, growing 5.8% from last year. Growth has slowed due in part to a reduced rollout of new screens and the failing of some smaller companies. However, as providers become more consolidated in the next couple of years, making it easier for advertisers to make buys with a broader reach, growth will return to double digits.
The fastest growth in the digital out-of-home category will come from digital billboards, which will soar 15.5% this year, to $551 million, despite the advertising downturn.
Of the three digital categories, alternative ambient advertising will grow at the slowest pace, up 1.8% to $552 million in 2009.
Spending on alternative media as a whole, which includes digital out-of-home, is projected to reach $139.45 billion in 2013, representing 29.7% share of total advertising and marketing spending, up from just 18.2% in 2008.
In addition to out-of-home advertising, other bright spots in the advertising and media industry will be internet media, business information, direct marketing, event marketing, PR, and b-to-b electronic media, all of which will grow over the next five years. Newspapers, broadcast TV, consumer and b-to-b magazines, yellow pages and traditional out-of-home are expected by Veronis Suhler Stevenson to shrink during the five-year period.
Alternative marketing segments – including branded entertainment and word-of-mouth marketing – will grow at 12.6% annually from 2008-2013.
The communications sector overall will be the third fastest-growing economic sector going forward, rising from its current position in fourth place. The communications industry as a whole will decline 1% in 2009, but grow faster than the GDP this year and over the next five years, VSS says.
Digital Out-of-Home Landscape Brief
By Jeremy Lockhorn, ClickZ, Jul 13, 2009
Digital out-of-home (DOOH) advertising is a dynamic, fragmented, and rapidly evolving space. It’s one of the fastest growing media channels, with year-over-year growth pegged in the double digits through at least 2011. Total spend in “alternative OOH media” is projected to exceed $3.5 billion in 2009, with nearly $2.9 billion spent on video ad networks and digital billboards, according to PQ Media.
Beyond ad spend, network operators continue to invest in infrastructure (software, hardware, installation, and maintenance services) to the tune of $640 million in 2008. That number is projected to grow by 33 percent in 2009, despite the difficult economic conditions. By 2013, it’s expected to approach $1.4 billion.
That growth is being driven by several factors:
- Equipment and infrastructure costs are falling, including those for quality flat-panel displays, bandwidth, and so forth.
- Consumers are spending more time out of the home than ever, twice more today than 30 years ago.
- The media landscape, particularly TV, is fragmenting, leading to decreasing effectiveness of traditional advertising and the resulting search for new, alternative ways to connect with an audience.
- Advertisers are questing for accountability; digital brings new forms of measurement to OOH media.
Advertisers are getting deeper into the space as they wake up to the incredible opportunity of delivering highly targeted geo, daypart, and dynamic messages into environments where people are receptive and have a much more immediate opportunity to respond to and activate offers they are exposed to. DOOH offers a compelling platform for national and local advertisers alike. A report from Profitable Channels in August 2006 identified the 4 Cs of DOOH:
- Coverage: A powerful combination of national reach and precise targeting, by geography, venue type, and more.
- Control: As on the Web, assets are centrally controlled and managed, allowing for rapid optimization.
- Cost effectiveness: CPMs (define) continue to be competitive when compared to online, TV, and traditional OOH.
- Customer satisfaction: Unlike many advertising channels, consumers typically find DOOH useful.
In addition, certain existing ad formats (e.g., some TV and Web creative) can be relatively easily adapted. And new varieties of consumer-facing interfaces continue to diversify and advance, especially with the broader availability of multitouch platforms and gestural interface possibilities. Most in the space are also getting serious about integrations with mobile devices, an acknowledgement that the intuitive link between the personal consumer device and the public digital experience hold immense potential for brands to engage and deliver unique experiences to individual consumers.
Still, it’s a medium fighting for its life in many ways. Growth in ad spend hasn’t kept pace with inventory growth, which has kept CPMs and overall publisher revenues low and has already claimed one casualty: Reactrix, one of the more unique and innovative networks.
There appear to a host of reasons for advertisers’ relatively slow adoption. Chief among them:
- Marketers lack awareness or full understanding of the channel’s benefits and capabilities. For many advertisers, it’s so new that it’s unclear where it should fit in the marketing mix.
- Similarly, as with many emerging media channels, DOOH is a bit of a gray area in terms of what type of agency should own strategy, planning, and buying. A traditional agency because TV spots can be repurposed? The OOH shop because it’s just a digital version of a billboard? The interactive shop because it’s digital, often interactive, and highly measurable? Or will a new class of DOOH specialty shops emerge to deliver services explicitly for the channel? This lack of clarity creates uncertainty and hesitation in advertisers.
- The space remains highly fragmented, with hundreds of networks selling inventory in wildly different venues. Aggregators, such as SeeSaw Networks and Adcentricity, are beginning to help address this issue.
- There is a lack of standards in terms of formats, metrics, and more.
The metrics issue stands as the single biggest challenge facing the space. Moving away from traditional opportunity-to-see measurement and toward a new eyes-on method of understanding the connection between DOOH and consumers response to it has helped, but many brands remain skeptical.
Focused studies on influence of contextual DOOH messaging impact on drive to store and sales lift are required to fully realize this channel’s measurement story, and several groups are actively working on this piece of the puzzle. A critical piece of the value that brands are responding to is their ability to purchase DOOH media in similar ways to online and to repurpose online assets for use in DOOH with little incremental production costs. Where interactions are possible with DOOH screens, methods of evaluating the consumer experience similar to online (exposure, time spent/duration of interactions, page views, and clicks) are serving brand needs for ROI (define) well.
Ultimately, these issues stand between the channel and mainstream adoption by major U.S. brands. Key players in the space are getting organized and teaming up to try to resolve some of the more difficult challenges.
In particular, the formation of the Out of Home Video Advertising Bureau, an independent industry advocacy and regulatory group comprising leaders from both the vendor/network side and agency buyers and strategists, has done much to advance the pursuit of measurement and research for DOOH, in addition to raising overall awareness and forming collaborative alliances between agency players and major network operators. The OVAB agency advisory board released its audience and metric guidelines earlier this year, which have been endorsed industry-wide and are quickly becoming the gold standard for inventory standardization and metrics compliance in the space.
Join us for Search Engine Strategies San Jose, August 10-14, 2009, at the McEnery Convention Center. Spend Day 1 learning about social media and video strategies with ClickZ.
Marketers Say Hello to Long-Awaited Mobile Technology
Qdoba, Others Use 2-D Barcodes to Feed Consumers Content Such as Coupons
Published: March 16, 2009
SAN FRANCISCO (AdAge.com) — When Peter Shipman, a franchise owner of the Qdoba casual Mexican restaurant chain, was launching his third outlet in the college town of Ann Arbor, Mich., he needed a way to draw students to the new location — and he wanted to speak their technological parlance. So he bought ads in the campus newspaper and posted promotional posters, each with a code kids could scan with their phones to get a mobile coupon for a buy-one-get-one-free burrito.
The campaign, which ran on technology from a company called Jagtag, netted a 52% redemption rate with about 400 scans* , roughly 1% of the total target student population.
“You use different media for different applications, and for a grand opening, this was appropriate,” Mr. Shipman said, adding he would consider using the technology for future promotions.
For Qdoba, it was a digital version of clipping coupons. But these codes — known as 2-D barcodes, since they’re scanned both horizontally and vertically — can also deliver product reviews, video demos or any other tool a marketer has in its digital arsenal. They can also help marketers track static ads and product performance in retail channels: Did the print ad get more scans in the men’s lifestyle glossy or the outdoor-enthusiast magazine?
Small but growing group
Qdoba joins small but growing group of marketers warming to the long-promised technology. In fact, among three vendors working to make this a reality — Scanbuy, Jagtag and Clic2C — there are at least 15 initiatives involving national brands in the retail, fashion, food and beverage categories that should hit next quarter.
Nike 6.0, the action-sports division of the footwear maker, recently deployed 2-D barcodes at several sporting events it sponsored late last year, delivering content about Nike athletes to fans who sent in images of Jagtag codes. While Nike won’t disclose campaign metrics, Butch Bannon, a business-development exec at its promotional-marketing agency, TAOW Productions, said Nike will look at other ways of integrating 2-D barcodes in future venues.
Microsoft will be slapping 2-D barcodes on the next round of packaging for its Xbox games, said Larry Harris, CEO of Ansible, which worked with Microsoft on a 2-D-barcode campaign to promote an enterprise server.
This kind of one-to-one exchange between brand and consumer is already well-entrenched in Japan, where they’re known as QR codes and where readers come preinstalled on about 70% of all mobile phones. But stateside only a few brands have flirted with the technology, mostly because consumers don’t want to bother downloading the applications required to read the codes. Plus, there are no standards for 2-D barcodes in the U.S., meaning the codes employed in one-off campaigns are proprietary, and each require their own reader and decoder.
“Everyone agrees on the category,” said Dudley Fitzpatrick, CEO of Jagtag, the technology behind the Nike campaign. “But brands don’t bet against consumer behavior.”
Making it easier
Jagtag is trying to solve that problem by making it easier for consumers. Rather than downloading an application, they take a picture of Jagtag’s 2-D barcode and send it to a short code, and Jagtag sends back a URL, coupon or other media via multimedia messaging service.
But analysts and Jagtag competitors agree that for 2-D barcodes to gain any meaningful traction, the code reader must come preloaded on cellphones — and only the wireless carriers can make happen, as they dictate the specs to handset makers.
Jonathan Bulkeley, CEO of Scanbuy, a Jagtag competitor, said he expects his code reader to be preinstalled on 10 to 12 handsets sold by Sprint and Alltel, which Verizon has acquired, by this spring. But consider there are 250 different handsets in the U.S., and they run on several different operating systems. That’s a long way to go.
The wireless carriers are slowly coming onboard as they look to transactions and commerce to help drive revenue. Scanbuy has been chasing AT&T and Verizon for at least 18 months; late last year, it got Sprint to approve its application, so users can download it on 40 handsets sold by the carrier. The No. 3 U.S. carrier began promoting Scanbuy’s application on its website late last year. Jagtag’s service works with AT&T and Verizon. “Carriers need to figure out how to make money on navigation, transaction and advertising,” Mr. Bulkeley said. “On mobile, consumers are going to go directly to what they’re interested in, not go search for it.”
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CORRECTION: An earlier version of this story incorrectly credited Scanbuy with the Qdoba campaign. Jagtag ran the program. Four hundred customers, not 4,000, scanned the Qdoba coupons.
In Japan, They’re Called QR Codes
HONG KONG (AdAge.com) — Quick-response codes are well-entrenched in Japan, where consumers routinely use their cellphones to check e-mail, download movie trailers, navigate Tokyo’s labyrinthine streets, pay water bills, buy Cokes from high-tech vending machines, download e-coupons and even have their fortunes told.
They also use their phones to scan QR codes on magazine and outdoor ads. The digital codes are read by the phones’ cameras and redirect them to designated mobile sites.
Northwest Airlines, for instance, has used QR codes on large outdoor posters in high-traffic areas in downtown Tokyo to send e-certificates for travel deals and award frequent-flyer bonus miles through its WorldPerks program. The campaign was created by Mindshare’s Tokyo office.
Nestle used the technology to launch a canned drink called Nescafe Shake. A QR code on promotional materials led cellphone users to a mobile site where they could download two 15-minute films created by WPP’s JWT, Tokyo. Users could also download the films’ original music as songs or ringtones.
QR codes have moved beyond Japan into other Asian markets, including China. The latest generation of QR technology lets marketers and retailers fine-tune their messages, making the experience more personal.
The codes have improved, too. A Hong Kong-based company called MyClick Media has pioneered image-recognition mobile marketing in North Asia. Instead of photographing bar codes, users click on logos, objects and images selected by marketers. The photos grant users one-click access to mobile-based internet content, services, rewards and gifts via e-mail, text and multimedia messaging service.
Since the technology is limited to high-end phones and requires a software download, MyClick hasn’t been a success for mass-market campaigns. But marketers such as Coca-Cola and Adidas have scored points with consumers in smaller promotions such as sporting events. China Mobile used MyClick to encourage subscribers to share good wishes for athletes during the Olympic Games last year in Beijing.
Advertising Boosts Transit Budgets
Digital Displays to Help Cover Revenue Shortfalls
Published: October 27, 2008
NEW YORK (AdAge.com) — For New York and Chicago commuters, ads are starting to seem unavoidable, cropping up everywhere from subway turnstiles to digital banners on buses to the entire exteriors of subway cars. But the ad revenue has become essential to the long-term sustainability of the cities’ transit authorities.
Take New York’s Metropolitan Transportation Authority, which is projecting a $900 million deficit for 2009 and needs all the extra revenue it can get before it resorts to hiking fares for millions of commuters. Jeremy Soffin, the agency’s spokesperson, said the MTA was able to generate $106 million in ad revenue in 2007, and anticipates finishing 2008 with $125 million. However, should pilot projects with advertisers continue on a permanent basis, the agency anticipates a lift in ad revenue as high as 25% in 2009.
“The advertising revenue is a small fraction of our total budget,” Mr. Soffin said. “We get about half of our funding directly from customers through fares and tolls — mostly government subsidies, taxes and other revenue sources. But obviously every bit of additional revenue helps close that gap.”
The MTA is in the midst of a 10-year contract worth $800 million with Titan Worldwide, an out-of-home-advertising company. Earlier this month, Titan began testing the first digital ads on buses in both New York and Chicago, bringing external video-enabled ads to public transportation for the first time. Advertisers in the test include Oreo, Dunkin’ Donuts, Sleepy’s mattresses and Sony Pictures, for the James Bond flick “Quantum of Solace.”
Don Allman, president-CEO of Titan Worldwide, said the first round of tests have already started to show how the ads enhance the commuter experience. “We had it parked outside one of our clients’ headquarters on Madison Avenue, and people stopped and stared and walked up to us,” he said. “It showed us this is going to create incremental, non-fare-box revenue.”
Ads with benefits
Titan is rolling out similar tests in Chicago, with which it has a separate 10-year contract signed in April and expected to generate about $101 million in new revenue, according to Chicago Transit Authority spokeswoman Catherine Hosinki. The extra ad dollars have become crucial for Chicago as well, which by law must cover 50% of its annual budget with revenue generated from fares, advertising and investment income.
Provided the new tests go well, Ms. Hosinki said she expects the CTA to equip 100 city buses and all 144 rail stations with 1,500 digital displays by next summer. An expansion is also being made to the city’s subway platforms to keep riders informed with real-time travel information. “In addition to providing a venue for advertising, the digital display boards create a new channel for the CTA to communicate with its customers,” Ms. Hosinki said in an e-mail.
Of course, transit ads aren’t limited to ticketed venues. NBC Universal and ABC have been active in programming New York City’s taxicabs with content and advertising in the past two years. Earlier this year, NBC expanded its out-of-home efforts under the umbrella of a new organization, NBC Everywhere, to include everything from gas stations, sports stadiums, grocery stores and maternity wards.
Up next is NBC in Transit, which will bring TV screens to Port Authority of New York and New Jersey PATH trains in the first quarter of 2009. Mark French, the group’s senior VP-general manager, said the company is actively creating a dedicated programming schedule for the new network comprising networks such as NBC, MSNBC, CNBC, Bravo, Oxygen, USA and Sci-Fi during different parts of the day. “We’re creating relevant content that you can display in some informative way and at the same time entertain and inform someone utilizing visuals,” he said. “What you will not see is repurposed TV programming with closed captions scrolling at the bottom of the screen.”
With the influx of ads destined to become a permanent part of New Yorkers and Chicagoans’ daily commutes, customer research is already being conducted at each transit authority to gauge initial reception of the new ad formats. “Obviously in a city like New York, advertising can be pretty ubiquitous, so we have to be very mindful of the fact we’re responsible for one of the city’s great public spaces,” the MTA’s Mr. Soffin said. “It’s a very democratic space. It’s just about finding the right balance.”
