Mediaweek: New Out-of-Home Nets Target Consumers at Work
This article originally was posted on January 21, 2008 at MEDIAWEEK.
By Katy Bachman
When NBC unveiled its NBC Everywhere stable of digital video networks last week, it galvanized a growing segment of the out-of-home media business that has sought to win over the hearts and minds of advertisers. Some 200 advertising and media execs were on hand at NBC’s home base in New York’s Rockefeller Center as the network announced the launch of nine digital networks targeting niche audiences where they work, play and shop, including colleges, gyms, sports arenas, taxis, supermarkets and gas stations.
For a medium that brings in about $1.3 billion to get “upfront” attention from one of the nation’s major media companies was both legitimizing and exciting.
“This was fantastic,” said Mike DiFranza, president, general manager of Captivate Network, a division of Gannett that operates a digital network of video screens in elevators across 21 of the nation’s largest markets. “It further validates the importance of reaching consumers where they are instead of hoping they’re in their homes watching TV.”
NBC isn’t the only media giant to embrace out-of-home. CBS—which created CBS Outernet last year after acquiring SignStorey, a video network based in 1,400 supermarkets—also announced big additions to its portfolio last week. An alliance with Automotive Broadcasting Network will create a video network in auto dealers, and a deal with Ripple provides access to an interactive network in 1,500 locations including Borders, Coffee Bean & Tea Leaf, Jack in the Box and Tully’s.
For the networks, it’s all about national reach and local activation. “Where CBS has mass reach at home, we’re now trying to provide targeted media out-of-home where consumers are engaged and advertisers want to be to cover the entire purchase cycle,” said Virginia Cargill, president of CBS Outernet.
At a time when media are increasingly fragmented, following the consumer’s path to purchase may well be paved with gold. In 2008, according to eMarketer, out-of-home video ads, including the $550 million-$700 million cinema ad business, will grow 22 percent to $1.5 billion, and in 2011 will hit $2.3 billion.
Hundreds of place-based networks have sprung up. The Outdoor Video Advertising Bureau—formed last year by Captivate, Premier Retail Network (which partnered with NBC on supermarket checkout screens) and a handful of other networks in an effort to promote growth and devise audience-measurement metrics—now has 25 members. Kim Norris, president of OVAB, said she’s eyeing a list of 200 more companies, large and small.
Despite their proliferation, digital nets often lack the scale that appeals to national advertisers, creating headaches for media buyers who must string together buys piecemeal. “It’s still a fragmented space,” said Peter Bowen, CEO of SeeSaw, which boasts the industry’s only Web-based optimizing tool for planning and buying across more than 20,000 venues. “These networks often build out in one lifestyle location or geographic region. For a campaign to be effective, it has to be aggregated.”
The space is ripe for consolidation. “The big media companies can aggregate networks, they can provide sales support, content, a lot of things that buyers want,” said Stephen Diorio, a partner with Profitable Channels, a marketing services and consulting company.
NBC says it can deliver 3 billion annual impressions via its nine networks, and 50 million monthly impressions through its supermarket network of more than 1,000 stores. CBS Outernet’s supermarket network delivers 68 million monthly impressions. Combined with the new Ripple partnership, CBS Outernet can deliver 100 million viewers monthly. The 18 nets repped by SeeSaw collectively deliver 5 billion annual impressions.
“This is a scale business—more screens means more eyeballs and more advertising,” said George Schweitzer, president of CBS Marketing Group. “We can do so much more because we have the content, the distribution and the sales.”
