Digital Fuels Growth for Out-of-Home Advertising


In these trying economic times, when an industry is predicted to grow 9% that should stand as a powerful symbol of the sector's long-term growth prospects. Could 2009 mark digital out-of-home media's coming out party? As traditional media titans like the New York Times crumble under the weight of their high operating costs and debt, digital out-of-home media stands to reap significant revenues.

Wouldn't it be ironic if the digital signage industry finally reached its long predicted tipping point while the country is in a recession? But, it should not be forgotten, that a recession breeds innovation. New ideas and business models emerge to drive economic revitilization. Digital out-of-home media stands to be a steward of such growth.

The current economic times are forcing media companies to reexamine their spending practices. Ultimately, as media buyers and planners delve deeper into what’s working and that which is not, they can no longer ignore the true benefits and measurability of digital out-of-home media.

"The secular trends driving growth in the out-of-home space aren't going away. People are spending more time outside the home and commuting more, the youth market continuing to multi-task and spending more time outside the home," Patrick Quinn, CEO of media forecasting firm PQ Media, said. "The networks really targeting these people and the technology being used to reach them is seen by both agencies and brands as more engaging and reaching them in captive locations at periods of time."

Suzanne Alecia, president of the Out-of-Home Advertising Bureau, said the last six months have been particularly game-changing for the industry as agencies such as WPP Group's Group M and Publicis' Mediavest start to equip their outdoor and even TV buying groups to plan and buy digital out-of-home as part of a larger integrated strategy. "The agencies are no longer talking about it. They're actually moving people around and creating divisions, investing man hours and time into this industry."

Although digital out-of-home offers advertisers an opportunity to tweak their TV ads, an increased amount of brands are creating dedicated spots for outdoor media networks (I think we can all agree that repurposing existing TV ads is not the answer. Brands must create content that is optimized for digital signage and feeds into the unique charactestics of the medium) David Leider, CEO of Destination Media, a digital out-of-home company which includes Gas Station TV, said about 35% of the campaigns that ran on his network in 2008 were custom-created, with package-goods marketers starting to pick up some of the slack from top categories such as automotive and retail.

Venture capitalists are also seizing the growing opportunity in digital out-of-home, particularly with companies who can help advertisers bridge the gap between social media and compelling content that complements the venue. Retail-based media networks such as Danoo, Channel M and Access 360 have all recently secured rounds of multimillion dollar funding, on par with what online ad networks were seeing as recently as a year ago.

Jon Chait, a partner at digital-media investment firm Dace Ventures, said digital out-of-home is becoming more attractive to investors as operational costs drop and the ad market matures. "These companies have dynamic targetability, whether it's digital or video-delivered, and they have ownership of the space they're in," he said.

One of Dace Ventures' recent investments is Locamoda, a mobile-based technology company that marries social networking with out-of-home interactivity. A new Clear Channel digital billboard in Times Square, for example, features a game called Jumbli that pedestrians can play on their cellphones or on Facebook. AT&T recently sponsored the game, and signed up 300,000 fans online and in Times Square for the game in the span of a month.

Locamoda CEO Stephen Randall said the metrics from the Jumbli game indicate that advertising can be welcome in a mobile, out-of-home setting under the right circumstances. "If you give the user control over the media and you're not afraid of the user, you're potentially doing what they do on the web," he said. "It's the right approach between something that's right for the user and not too scary for a brand. You just want to give the user the loudest voice possible." (via Ad Age)

Technology like that pioneered by Locamoda connect out-of-home networks with the community-driven relevancy of online destinations such as Facebook and Twitter. Bridging social networks and digital signage will foster conversations that effortlessly flow across a person’s connected life.


It is an exciting time to be in the digital signage industry.

Labels: , , , ,

The Digital Gist: Digital Fuels Growth for Out-of-Home Advertising

Saturday, January 17, 2009

Digital Fuels Growth for Out-of-Home Advertising


In these trying economic times, when an industry is predicted to grow 9% that should stand as a powerful symbol of the sector's long-term growth prospects. Could 2009 mark digital out-of-home media's coming out party? As traditional media titans like the New York Times crumble under the weight of their high operating costs and debt, digital out-of-home media stands to reap significant revenues.

Wouldn't it be ironic if the digital signage industry finally reached its long predicted tipping point while the country is in a recession? But, it should not be forgotten, that a recession breeds innovation. New ideas and business models emerge to drive economic revitilization. Digital out-of-home media stands to be a steward of such growth.

The current economic times are forcing media companies to reexamine their spending practices. Ultimately, as media buyers and planners delve deeper into what’s working and that which is not, they can no longer ignore the true benefits and measurability of digital out-of-home media.

"The secular trends driving growth in the out-of-home space aren't going away. People are spending more time outside the home and commuting more, the youth market continuing to multi-task and spending more time outside the home," Patrick Quinn, CEO of media forecasting firm PQ Media, said. "The networks really targeting these people and the technology being used to reach them is seen by both agencies and brands as more engaging and reaching them in captive locations at periods of time."

Suzanne Alecia, president of the Out-of-Home Advertising Bureau, said the last six months have been particularly game-changing for the industry as agencies such as WPP Group's Group M and Publicis' Mediavest start to equip their outdoor and even TV buying groups to plan and buy digital out-of-home as part of a larger integrated strategy. "The agencies are no longer talking about it. They're actually moving people around and creating divisions, investing man hours and time into this industry."

Although digital out-of-home offers advertisers an opportunity to tweak their TV ads, an increased amount of brands are creating dedicated spots for outdoor media networks (I think we can all agree that repurposing existing TV ads is not the answer. Brands must create content that is optimized for digital signage and feeds into the unique charactestics of the medium) David Leider, CEO of Destination Media, a digital out-of-home company which includes Gas Station TV, said about 35% of the campaigns that ran on his network in 2008 were custom-created, with package-goods marketers starting to pick up some of the slack from top categories such as automotive and retail.

Venture capitalists are also seizing the growing opportunity in digital out-of-home, particularly with companies who can help advertisers bridge the gap between social media and compelling content that complements the venue. Retail-based media networks such as Danoo, Channel M and Access 360 have all recently secured rounds of multimillion dollar funding, on par with what online ad networks were seeing as recently as a year ago.

Jon Chait, a partner at digital-media investment firm Dace Ventures, said digital out-of-home is becoming more attractive to investors as operational costs drop and the ad market matures. "These companies have dynamic targetability, whether it's digital or video-delivered, and they have ownership of the space they're in," he said.

One of Dace Ventures' recent investments is Locamoda, a mobile-based technology company that marries social networking with out-of-home interactivity. A new Clear Channel digital billboard in Times Square, for example, features a game called Jumbli that pedestrians can play on their cellphones or on Facebook. AT&T recently sponsored the game, and signed up 300,000 fans online and in Times Square for the game in the span of a month.

Locamoda CEO Stephen Randall said the metrics from the Jumbli game indicate that advertising can be welcome in a mobile, out-of-home setting under the right circumstances. "If you give the user control over the media and you're not afraid of the user, you're potentially doing what they do on the web," he said. "It's the right approach between something that's right for the user and not too scary for a brand. You just want to give the user the loudest voice possible." (via Ad Age)

Technology like that pioneered by Locamoda connect out-of-home networks with the community-driven relevancy of online destinations such as Facebook and Twitter. Bridging social networks and digital signage will foster conversations that effortlessly flow across a person’s connected life.


It is an exciting time to be in the digital signage industry.

Labels: , , , ,

4 Comments:

Anonymous Jay Patel said...

David,
Great post!

I agree with your sentiment that user involvement can greatly benefit any network.

-Jay

January 17, 2009 at 2:32 PM  
Blogger David Weinfeld said...

Jay,

Thank you for the kind sentiment.

The opportunities for user involvement and engagement is truly what elevates digital out-of-home beyond traditional media. Interactivity fostered through MMS, SMS, Bluetooth, etc. gives consumers the ability to shape the conversation.

Passive media is dying. Active media that lives and breathes through online and offline conversations is the future.

January 20, 2009 at 9:32 AM  
Anonymous Christian said...

Hey David,

Indeed a great post and certainly some positive news out there. But I think that there are some "dark" news going on these days as well as the economy turns. OOH / DOOH is certainly not recession proof.

"Interactivity fostered through MMS, SMS, Bluetooth, etc. gives consumers the ability to shape the conversation." This is a Great quote, as these technology / media will help Out of Home become undeniable in the long run. Great post again!

February 20, 2009 at 12:04 AM  
Anonymous Ana Udrea said...

Hey! I think your article is quite relevant today even though it was written 2 years ago. Us in the UK are expecting a boost of the sector with advertising revenues increasing (so your ) and the 2012 Olympic Games hosted in London. I've wrote something on DOOH's 2011 trends you can read here - http://www.digitalsignage.net/2011/03/18/dooh_predictions/

March 18, 2011 at 11:14 AM  

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