I Was A Huge Viewer, I Sucked In The Elevator Medium

Chris Sheldrake

Very nice article in last week’s MediaWeek entitled ‘Digital Screens Growing Reach‘ saying “Digital video networks are popping up everywhere the consumer is, from the grocery store to the gym to the local coffee house”

Nice mentions for Captivate Networks and great that we are getting a lot more mainstream press…

Christina Radigan is is going through withdrawal. Her office in New York is moving to a building where Captivate Network, the company that operates a digital network of elevator screens, isn’t available.

“I was a huge viewer. I sucked in the elevator medium like there was no tomorrow,” says Radigan, associate director of marketing and communications for Outdoor Media Group and Outdoor Media Alliance, special business groups of OMD and PHD. Radigan counted on the screens to give her the news in the short time she traveled three floors to her office. “I don’t have time for other media. My new favorite term is idle time,” Radigan says.

There are millions of people like Radigan, squeezed for time and with very little opportunity to spend with traditional media. Idle time may be the best way to reach those consumers.

Digital video networks are popping up everywhere the consumer is, from the grocery store to the gym to the local coffee house. The biggest example of digital out of home—cinema advertising—is a $500 million business growing at a double-digit pace and comprised just under half of the $1.3 billion digital OOH business last year, according to PQ Media.

Around the turn of the century, hardly anyone had ever heard of digital out-of-home media. But the inevitable growth path of technology changed all that. Today, it’s a lot less expensive to roll out a digital network. There are hundreds of networks with new ones popping up weekly. The new medium is also getting a boost from big media’s entry into the space. CBS last year created CBS Outernet when it acquired SignStorey, a video network across thousands of grocery stores. Earlier this year, NBC unveiled its NBC Everywhere portfolio of digital video networks, publicly galvanizing the segment that’s been working to break out in the minds of advertisers.

“There have been attempts at digital networks for years, but before the technology was too expensive,” says Daniel Wilkins, president of digital OOH shop n2. “Then Captivate and other groups began to do it effectively. And cinema caught on.”

Often compared to where the Internet was a decade ago, digital out of home today is long on promise but short on dollars. Not for long. eMarketer estimates that in 2008, out-of-home video advertising, which includes the $550 million-$700 million cinema ad business, will grow 22 percent to $1.5 billion, hitting $2.3 billion in 2011. Based on research from PQ Media, Veronis Suhler Stevenson forecasts alternative out of home will grow 22.5 percent through 2012, reaching $6 billion and making up half of the total out-of-home revenue.
“What’s happened with cinema, will happen with video networks,” predicts Steve Faso, vp and director of new media for Outdoor Services, an IPG-owned OOH shop.

“There are more networks than there is money, but that is changing. Clients are starting to allocate more money. They are also starting to ask about it more,” says Wilkins.

All the appeal aside, digital out of home is still considered an “accessory” to out-of-home campaigns. Lacking metrics and undervalued, there are hundreds of networks to track. Some have achieved national reach, but many are still limited by distribution.

That can be tough for buyers to get their arms around, let alone clients that are allocating budgets. “Most [digital networks] don’t have infrastructure and content to substantiate themselves. There’s a lot you have to break through to buy anything that’s worth it,” says David Matera, CEO and co-founder of Digital Hive and OOHPitch.

“It’s hard to go to your clients and present an industry that has so many methodologies and metrics,” Radigan says. “An impression isn’t an impression isn’t an impression.”

For digital out of home to become a real line item in budgets, the industry needs education, scale and common metrics. “Right now, it doesn’t have that scale,” adds OSI’s Faso. “There’s still a learning curve. Not everyone is ready to sign on the bottom line yet. Metrics will attract the big dollars. This is like the early days of cable. Their biggest challenge was measurement.”

Media shops are moving to get ahead of the curve. To grow the business, a popular approach by OOH shops has been to separate digital OOH from traditional in a separate unit, even separate companies. Wilkins Media, for example, created n2 in April and claims $25 million in revenue from digital campaigns.

Similarly, says Matera, OOHPitch started Digital Hive a year ago “because of perception. We knew we had to start talking to a different group of people.”

Both companies believe there needs to be a clear separation between traditional out of home and digital out of home to avoid cannibalization of OOH budgets. “If clients are going to pull dollars out of traditional out of home, it will fail,” Matera says. “In some ways, out of home is a bad word to use with digital because vendors and agencies think they have to talk to the OOH group.”

Other shops take issue with that approach, preferring to integrate emerging media with traditional. “Just because digital media exists, we didn’t run out and create a separate company or unit; we’re not taking a silo approach,” says Radigan. “It’s still a new business.”

There’s no clear answer today, but all shops agree the business is on the verge of breaking out. Next year, promises Wilkins, “will be the year of digital. You’ll see consolidation. Networks will fall out. And groups like ours will convince clients to get into the space.”

See http://www.mediaweek.com/

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