Ad Volume Estimate (North America DOOH 2009)

Lyle Bunn ^[1] believes that 1,000,000+ adverts are now playing on North America’s Digital-Out-of-Home networks and here he tells us what that means, Ed ….

An estimated 1,080,000 unique advertising spots play on Digital Out-of-Home displays across North America during 2009, based on calculations using conservative parameters.

The Digital Signage / Digital Out-of-Home industry in North America has been emerging rapidly (25-50% CAGR) over the past 6 years in particular and despite reductions of an estimated 3% in overall ad spending; spending on DOOH continues to grow from its 2008 level of USD 1.4 billion (according to PQ Media) by 9% annually.

DOOH has very much found itself in the ‘communications continuum’ with other credible advertising medium such as TV, radio, Internet, print, billboard, and is positioning itself as a ‘trigger device’ to motivate engagement through handheld and mobile interactivity.

The Digital Out-of-Home sector of the industry, which is based on third party advertising revenues, is comprised of almost 200 US networks, which allow advertisers to reach targeted audiences based on demographic profile, Designated Market Area (DMA), geography and even the activity in which they are involved (shopping, transit, café, workout, attending a sports event) in presenting messages at the point of purchase, transit and social and work gathering.

The following lists provide sample characteristics of networks whilst also indicating total industry ad volume. The estimates used are generally conservative.

Ad Volume Estimate (North America DOOH 2009)

1. Total Displays – North America Per DisplaySearch (an NPD Company). Similar display deployment totals are reflected by other market analysts. 900,000
2. Percentage of Displays with Advertising Estimate (conservative) 50
3. Displays for Advertising Total Displays X % with ads. This is conservative based on the fact that OVAB member networks alone account for 425,000 displays and many Digital Signage (i.e. not 3rd party ad supported) accept some form of advertising to offset costs. 450,000
4. Displays per “Channel” Estimate 100
5. Number of Unique Channels with ads Displays for Advertising ÷ Displays per Channel 4,500
6. Typical loop Duration (Minutes) Estimate 10
7. Typical “Spot” Duration (Seconds) Estimate 15
8. Total Spots per loop Loop Duration ÷ Spot Duration 40
9. Percentage Ad Spots per Loop Estimate 50
10. Ads per Loop Total Spots per Loop X % Ad Spots 20
11. Total Ad Spots Running at any Time Ad Spots per Loop X Number of Channels 90,000
12. Frequency of Ad Refresh per Year Estimate 12
13. Estimated Total Unique Ads on North America Digital Out-of-Home Networks in 2009. Ad Spots at any time X Annual Refreshes 1,080,000

Note: Line Item Source / Calculation Approach / Value

DOOH advertising is of course sold by a wide range of organizations…

• Most Digital Out-of-Home networks have an internal ad sales capability.
• Many network operators are members of the Out-of-Home Video Advertising Bureau ^[3] or the Canadian Out-of-Home Digital Association ^[4] (CODACAN). These associations increase the profile of DOOH to accelerate overall ad sales success.
• Adcentricity ^[5] represents over 80 network partners with over 140,000 place-based and retail screens covering 16 main venue categories and over 70 sub-categories.
• SeeSaw Networks ^[6] “reaches more people in more places than any other digital video network. Combining over 50 digital signage networks across 30 different types of locations, SeeSaw is the most extensive national digital video network currently in 26,000 venues nationally and growing. SeeSaw delivers over 50 million weekly gross impressions – more than primetime TV spots at a fraction of the cost”.
• rVue ^[7] acts as a sales agent for about 20 networks.

Ad displays on DOOH are often included in campaign proposals blended with TV, cable, radio or static billboard ads by the likes of ABC, CBS, NBC, ClearChannel and others.

As existing media providers (i.e. cable, print, etc) deploy their own DOOH networks, ad display opportunities will more and more be bundled with ‘core business’ ad proposals.

Personnel responsible for sponsorship, patron programs, merchandising and co-op programs typically add Digital Signage to their proposals when display capability is added to their facilities.

Other ad sales capability could be expected as media organizations seek to leverage their ad sales capabilities and infrastructure.

Given the proven results in sales uplift, message recall and awareness, reduced perceived waiting times and improvement to the location experience that result from the proper use of Digital Out-of-Home, as well as the continuing growth in the number of displays, advertisers and ad sales representation, the future continues to be positive for Digital Signage and Digital Out-of-Home something I would describe as “the sharpest instrument in an advertisers tool chest”

Lyle Bunn ^[1] is a consultant, commentator and educator in North America’s Digital Signage / Digital Out-of-Home industry. Lyle@LyleBunn.com