MediaPost’s 2008 Digital Out-of-Home Forum

If you had to point to a defining moment in the history
of digital out-of-home media, Wednesday, April 23
might make it onto the short list.

NEW YORK—April 28, 2008— Interest in digital out-of-home media has reached a new level with MediaPost’s 2008 Digital Out-of-Home Forum, held at the Grand Ballroom of the Yale Club of New York. It was so well attended there was barely any standing room available. This was MediaPost’s first forum on the digital out-of-home category and it attracted a wide range of C-level executives from venture capital, advertising, media aggregation, media buyers, and out-of-home networks. The event featured five panels that explored a range of subjects in an open-forum format, which included media buying, media fragmentation, consumer exposure and acceptance, deployment, and metrics.

The event’s opening keynote given by Tim Hanlon, Executive Vice President, Ventures, Denuo, titled “Reality Check from the Future?” gave a peek into the future by revealing that despite the record growth for the digital out-of-home market, there are still plenty of obstacles that stand in the way before the medium becomes truly mainstream. “The advertising industry is still trying to make sense of digital out-of-home and is unsure how to categorize the medium,” Mr. Hanlon said. Media buyers tend to be “fast-followers” and are generally not ahead of the market. The media business needs “innovators” who can champion digital out-of-home within their organizations. Adoption of out-of-home media will require the digital out-of-home industry to “add honey” such as giving away services and research that will help buyers understand the value of out-of-home networks.


The Big 4

The Forum’s opening panel included leaders from the big four out-of-home media buying shops discussing how they approach video in public spaces. The panel was composed of David Krupp, Managing Director, Kinetic; Todd Hansen, Chief Operating Officer, Posterscope USA; Jack Sullivan, Senior Vice President/Out-of-Home Media Director, Starcom USA; David Yacullo, President & CEO, Outdoor Media Group.

The panel agreed that media buying is moving toward adoption of digital out-of-home faster now when compared with similar adoption patterns for the Internet. Advertising dollars are being reallocated from other areas of the media pie toward digital out-of-home. Many media plans have placed digital out-of-home under the outdoor media category. It may not really belong there, but that is the way it is for now. It may become its own category in the future. When selling digital out-of-home you need to look for “champions” inside agency media departments who understand the medium—not everyone “gets” the space yet.

In the end it’s all about the consumer supplying relevant information and time management. Consumers now have the ability to carry information away with them, “tagging” the physical world via mobile phones and mobile access to the Internet. There is a coordination of media channels that will make messages nonspecific to any one thing, so one would be able to say “I saw it in the media.”


Fragmentation

Digital out-of-home is the next frontier in mass media, but it is not without its challenges, one of which is the topic of the day’s next panel dealing with “Fragmentation—How Big Media Companies Are Creating One-Stop Scale.” The panel included Peter Bowen, Founder and CEO, SeeSaw Networks; Virginia Cargill, President and CEO, CBS Outernet; Richard Fisher, President, Premier Retail Networks; and Mark French, Senior Vice President and General Manager, NBC Everywhere. The panel was moderated by Patrick Quinn, President and CEO, PQ Media.

To set up the Fragmentation Panel, Patrick Quinn of PQ Media presented a series of data points that illustrated the problem. A media planner 30 years ago you had only 10 media choices. Today there are more than 60. The media map is cluttered with too much choice bombarding the consumer.

Digital out-of-home spending in 2007 had the smallest allocation of media dollars, however, the growth of digital out-of-home accelerated the most during 2007, growing at a rate of 60%. Within the category, in-store video ad networks grew at 21%, in-office 25%, in-transit 3%, and in-theater had a growth rate of 51%.

Content is a big issue for everyone. Custom content is expensive to produce, but it is part of the value proposition. “We constantly talk to the shoppers to see what content is relevant,” said Virginia Cargill of CBS Outernet. “Engagement is the key,” Ms. Cargill continued. Mark French of NBC Everywhere stated, “Broadcast has never been held to the same standards the digital signage is being held to.” Advertisers are excited about the local targeting opportunities that digital signage presents, and Mr. French noted that most of the growth was in local markets as opposed to national markets.


Metrics

The Metrics Panel was moderated by Jim Spaeth, Founding Partner, Sequent Partners. The panel included Paul Lindstrom, Senior Vice President, Nielsen Strategic Media Research; Suzanne Alecia, President, Out-of-Home Video Advertising Bureau; Tony Jarvis, Executive Vice President, Global Research, Clear Channel Outdoor; David Turman, Director OOH, Spark Communications; and Diane Williams, Analyst, Custom Research Services, Arbitron.

Measurement is one of the key barriers to growth for digital out-of-home media. This year, 2008, is starting to take shape as the year that metrics put digital out-of-home on the media map. “If you’re not on the plan, then you’re not on the buy,” said Suzanne Alecia, of the Out-of-Home Video Advertising Bureau.

The afternoon’s most spirited conversation happened on the Metrics Panel. Everyone agreed that it was important to simplify the message to make buying easier. “We need everyone to be consistent with their measurements…simplicity is important,” said David Turman. “When considering digital out-of-home we can’t think about it the old way. You need to look at the data regarding digital out-of-home, and it needs to come back to verifiable truths.” We keep talking about impressions, but what we’re really talking about is consumer engagement. Paul Lindstrom of Nielsen stated that “planners and buyers need to understand the medium, and so do their clients—simplicity is key.”

Two big announcements came during the Metrics Panel. First, Paul Lindstrom of Nielsen announced they are starting to focus on the digital out-of-home market with specialty research called “Pocketpieces” for screen media networks. By September 2008, Nielsen will be publishing data for as many as 10 place-based digital video networks. The first pocketpiece will be for the IdeaCast Network, covering their healthclub video network, followed by coverage for Gas Station TV. Both of these reports should be released within the next few weeks. Nielsen coverage of place-based video networks gives important validation to this segment of the market and should make it easier for media buyers to incorporate out-of-home video into the marketing mix. 

Another announcement came from the Out-of-Home Video Advertising Bureau (OVAB). They are proposing new measurement guidelines for estimating the audience for out-of-home video networks.

The guidelines will look at 3 components:

1. Gross Venue Traffic (Total audience volume)
2. Presence In the “Zone” (How close screens are in relationship to the audience)
3. Notice (What is the average dwell time)

Suzanne Alecia of the Out-of-Home Video Advertising Bureau announced the guidelines. A draft of the guidelines has been submitted to the Media Research Committee at the American Association of Advertising Agencies (AAAA) and will provide a basis for more accurate measurement for out-of-home networks to calculate ad impressions with a consistent standard.

“An unmeasured medium is an undervalued medium,” said Paul Lindstrom of Nielsen. The new audience data is not perfect, but it would start to provide some much needed structure for agencies and advertisers to negotiate cost based on common standards. “There is a need to set the bar, so negotiations can move forward,” he said.



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