As ad buyers continue their hunt for alternative messaging MOs, out-of-home media players are betting that a new ratings system and some higher-tech options will keep the sector on a growth track.
After two fairly flat years, the out-of-home media industry grew by 5.2% in 2003, up from US$5.23 billion in 2002. And Stephen Freitas, chief marketing officer of the Outdoor Advertising Association of America, says that’s just the beginning. ‘This year, we’re expecting growth past the 7% range, in part because advertisers are having problems reaching their audiences through broadcast TV due to fragmentation, increased costs and shrinking audience share.’
With a CPM range between US$2 and US$4, outdoor advertising is much cheaper than broadcast, radio and magazines, and the scale and location of its initiatives (usually involving several signs in one area) create a number of opportunities for exposure on any given day.
But because the key to doing outdoor well is keeping it simple, most buyers agree that it works best as part of a larger branding initiative. Industry veteran Glenn Carroll is the founder of Carroll Media Services, a company that checks out potential sites and conducts post-buy audits on outdoor campaigns for clients including Disney, Paramount and Sony. He cites McDonald’s as a company that understands the nature of the medium really well. ‘A kid sees the M on a sign, and they want a Happy Meal. But if McDonald’s only bought billboards, I doubt that M would elicit the same response.’
Cartoon Network runs three to five outdoor campaigns a year as part of larger efforts that incorporate TV and radio buys. When it launches its new Miguzi action block in April, Cartoon will splash messaging on buses, subways, taxi tops, train posters and signage in major metropolitan markets like New York, L.A. and Chicago.
‘Outdoor has a dual function for us,’ says Cartoon’s senior VP of marketing, Dennis Adamovich. ‘It gets to the consumer, but it also gets to the ad buyers and clients,’ he explains, adding that location is just as important as the message when it comes to using this medium. ‘You’ve got to fish where the fish are. We’re trying to catch them when they’re commuting and in places they go to frequently, like movie theaters or Boy’s and Girl’s Clubs.’ For his clients Toys ‘R’ Us and Disney, Starcom USA senior VP and media buyer Jack Sullivan finds that amusement parks, skating rinks, beaches and malls are some of the best places to connect with kids.
Taking advantage of advances in billboard technology is also crucial, and mechanisms that allow for 3-D movement are changing the parameters of what can be done in this space. In 2001, for example, TRU took a news truck and created a Geoffrey the Giraffe telescopic neck that could be lowered when driving and raised when parked at events. And Disney’s recent campaign to promote its November 2003 flick Brother Bear featured signs that appeared to be shifting and falling over because the pic’s moose characters were crowded to one side. While 3-D embellishments on billboards can be expensive, they tend to be left up for longer periods of time, which amortizes the cost.
Another new opportunity is being pioneered by Clear Channel, which is in the process of changing over all its 2×3 backlit signs on the New York Subway system to plasma screens that will run TV-style ads and stills. As flat screens come down in price, larger ones will start to hit the market, eventually finding their way onto billboards, says Starcom’s Sullivan. And video will ape what’s being done on the Internet, with five-second quick hits replacing the more traditional 30-second commercial.
Another app with the potential to move the industry forward by leaps and bounds is digital ink, which is printed as a static image on paper, but can change when triggered by an electrical impulse. ‘This has tremendous ramifications for the outdoor industry’ in that it would eliminate the need to send crews to change billboards, says Freitas. The application could be in place within the next couple of years. ‘It’s just a matter of developing the technology to a level at which the graphic reproduction is where the industry wants it to be,’ he says.
Despite these exciting new technological advances, the fact is that outdoor marketing is often overlooked by media planners and clients looking to reach kids. One possible reason may be the lack of qualitative and quantitative data proving the medium’s effectiveness with kids, since most media measurement is conducted with consumers over 18. In 1998, however, the OAAA commissioned a study that evaluated the effectiveness of a Fox Kids campaign that involved outdoor marketing. The research team concluded that while outdoor was most effective as a branding tool used in conjunction with an integrated media campaign, familiarity with Fox Kids properties was higher in the outdoor test markets. Awareness of Power Rangers was 17% higher in the test market versus the control group, and Silver Surfer was up 11%.
Thanks to Nielsen Media Research, marketers will soon have a new tool to track the effectiveness of their outdoor buys. The audience measurement company has been working with the OAAA and marketing research firm Arbitron on a new system that will have willing consumer participants carry GPS panels to track their movements and make a note of when and where they see signs and billboards.
The system will roll out in Chicago by the middle of this year, and Freitas says the first batch of results should be in as early as June. ‘This is something we’re moving very quickly on,’ he says. ‘For the first time, outdoor will be measured in the same way and against the same demos as broadcast and print.’
Starcom’s Sullivan says the new system will actually go one step further than TV ratings because it can measure the effectiveness of the signage’s location and size. ‘We know that bigger has more impact, that Reader’s Digest is probably not as impactful on the shelf as Rolling Stone, but there’s nothing that actually rates that,’ he says. ‘Overall, I think the ratings are going to impact the industry quite a bit because it will allow us to get smarter about both size and placement.’
With new TV-like delivery methods, along with stronger research and ratings capabilities in the pipeline, Sullivan is predicting that there will be a major overhaul in outdoor over the next three to five years. ‘Buyers should be interested in the outdoor world; it’s not your dad’s outdoor industry anymore, it’s a medium that’s really moving quickly into the 21st century,’ says Sullivan, adding that since the medium has been stuck in the past for so long, its growth potential is higher than any other category.