MediaPost Publications – by Erik Sass

THE OUTDOOR AD INDUSTRY CONTINUED its meteoric growth in the first half of 2006. Total revenue expanded 8.2 percent over the same period in 2005 to top $3.5 billion, in line with forecasts from trade organization Outdoor Advertising Association of America. If the industry matches its 8 percent overall annual growth rate in 2005, 2006 revenue could top $6.8 billion by year’s end.

The rise has been due in part to entertainment advertising–including movie and TV promotions–as well as heavy competition between telecommunications providers, says Stephen Freitas, CMO for the OAAA. “Brands are investing more heavily than we anticipated. We’re starting to see an acceleration in ad dollars moving from other traditional media to out-of-home.” Why the shift? Freitas credits continued uncertainty about the future vitality of other media formats. Plus, there is a lot of interest “in using out-of-home to reach consumers when they’re on the go.”

In addition, advertisers are showing special interest in new outdoor ad technologies, including digital signage. Freitas says that while the digital billboard segment is still relatively small, outdoor companies are aggressive: “A lot of outdoor companies tell us that even before a sign is built, it’s sold out more than a year in advance.” By allowing advertisers to display multiple ad faces, these digital billboards can substantially boost revenue. They charge premium prices for certain dayparts–like heavy commuting hours.

Clear Channel Outdoor is also expanding the field.

The company is pushing the envelope with a new technology that allows users to shrink outdoor digital signage to a fraction of the size and power consumption of existing electronic systems. According to Paul Meyer, CEO of Clear Channel Outdoor’s global operations, the new technology, called Magink, is currently being tested in a few locations in Europe by Clear Channel Outdoor and European competitor JCDecaux. Although Magink still hasn’t showed up on outdoor’s bottom line, the new tech could enhance the outdoor boom.

In the Magink system, small plastic tiles are smeared with a specially formulated paste containing helix-shaped molecules one micron long. When exposed to an electrical charge, these molecules move in regular, predictable patterns–which can be calibrated to respond precisely to different wavelengths of light, forming colors and shapes. By varying the electrical input, Magink displays can be changed to showcase myriad images.

Another long-term factor that will sustain the outdoor boom is the desire for increased transparency and accountability in the outdoor market. Freitas says there are “new methods for proof of performance, in which advertisers can see exactly what kind of delivery they’re getting in real time.” The OAAA also recently partnered with Spot Buy Spot to create an XML schema that enables online trading between different types of software and proprietary systems.

THE OUTDOOR AD INDUSTRY CONTINUED its meteoric growth in the first half of 2006. Total revenue expanded 8.2 percent over the same period in 2005 to top $3.5 billion, in line with forecasts from trade organization Outdoor Advertising Association of America. If the industry matches its 8 percent overall annual growth rate in 2005, 2006 revenue could top $6.8 billion by year’s end.

The rise has been due in part to entertainment advertising–including movie and TV promotions–as well as heavy competition between telecommunications providers, says Stephen Freitas, CMO for the OAAA. “Brands are investing more heavily than we anticipated. We’re starting to see an acceleration in ad dollars moving from other traditional media to out-of-home.” Why the shift? Freitas credits continued uncertainty about the future vitality of other media formats. Plus, there is a lot of interest “in using out-of-home to reach consumers when they’re on the go.”

In addition, advertisers are showing special interest in new outdoor ad technologies, including digital signage. Freitas says that while the digital billboard segment is still relatively small, outdoor companies are aggressive: “A lot of outdoor companies tell us that even before a sign is built, it’s sold out more than a year in advance.” By allowing advertisers to display multiple ad faces, these digital billboards can substantially boost revenue. They charge premium prices for certain dayparts–like heavy commuting hours.

Clear Channel Outdoor is also expanding the field.

The company is pushing the envelope with a new technology that allows users to shrink outdoor digital signage to a fraction of the size and power consumption of existing electronic systems. According to Paul Meyer, CEO of Clear Channel Outdoor’s global operations, the new technology, called Magink, is currently being tested in a few locations in Europe by Clear Channel Outdoor and European competitor JCDecaux. Although Magink still hasn’t showed up on outdoor’s bottom line, the new tech could enhance the outdoor boom.

In the Magink system, small plastic tiles are smeared with a specially formulated paste containing helix-shaped molecules one micron long. When exposed to an electrical charge, these molecules move in regular, predictable patterns–which can be calibrated to respond precisely to different wavelengths of light, forming colors and shapes. By varying the electrical input, Magink displays can be changed to showcase myriad images.

Another long-term factor that will sustain the outdoor boom is the desire for increased transparency and accountability in the outdoor market. Freitas says there are “new methods for proof of performance, in which advertisers can see exactly what kind of delivery they’re getting in real time.” The OAAA also recently partnered with Spot Buy Spot to create an XML schema that enables online trading between different types of software and proprietary systems.

The Center For Media Research

A survey, by the Association of National Advertisers (ANA) and Forrester Research, found that 78% of advertisers feel that traditional television advertising has become less effective in the past two years. The survey also found that marketers are exploring emerging technologies to help bolster their television advertising spend.

70% of 133 national advertisers surveyed, representing more than $20 billion worth of advertising, think that DVRs and video-on-demand will reduce or destroy the effectiveness of traditional 30-second commercials.

Josh Bernoff, Vice President, Forrester Research, said “Television networks continue to publish research that traditional TV advertising is (as) potent as ever, but national advertisers aren’t buying it and are seeking alternatives to enhance their budgets and move them beyond the customary 30-second spot.”

Key highlights of the survey include:

• When DVRs spread to 30 million homes, close to 60% of advertisers say that they will spend less on conventional TV advertising; of those, 24% will cut their TV budgets by at least 25%.
• While 55% say that their top executives are closely watching changes in TV advertising, most advertisers have not experimented with advertising on DVRs or video-on-demand.
• Eighty percent of advertisers will spend more of their advertising budget on Web advertising and 68% of advertisers will look to search engine marketing.
• Advertisers will spend more of their advertising budgets on branded entertainment within TV programs (61%), TV program sponsorships (55%), interactive advertising during TV programs (48%), online video ads (45%), and product placement (44%).

Bob Liodice, President and CEO of the ANA. said “As new and traditional media alternatives compete more aggressively for a share of the media pie… television is aggressively responding. With technology-based advances in addressability, enhanced television options, Internet convergence (IPTV) and branded entertainment opportunities, television is likely to continue as the dominant part of the marketing mix.”

For additional information, please visit the ANA here.

MediaPost Publications – Joe Mandese

OUTDOOR AD SPENDING ROSE  8 percent during 2005, making it one of the fastest growing sectors  of media last year, according to final estimates released today by the  Outdoor Advertising Association of America. Results were especially strong in some fast-growing categories, including: communications (+31.8 percent), insurance and real estate (+16.4 percent) and retail (+11.7 percent).

Leora Lanz and Barbara Wiener

As we review sales and marketing initiatives for 2006, we all have the same goal: to increase market share and improve the bottom line.

In this fast-paced and competitive environment, there are more marketing tools and opportunities open to us than ever before, and the ways we will get there and how we will choose to allocate our dollars are indeed numerous. We are familiar with the traditional advertising that we have been using for the past 20 years. But with Internet marketing and e-commerce, the challenge for many will be to understand and keep up with the variety of new tactics and mediums available, and which ones make sense for reaching out to current and prospective customers.

May we suggest that you be open to experimenting and focus your budget on a select few new tactics to see how they work? New tools evolve everyday and trying out innovative and creative marketing methods is ok. Just don’t spread your marketing dollars too thin so that nothing is effective.

Ever thought about advertising on cell phones or i-pods? On the treadmill’s screen display at the local health club? On the elevator monitor in a large downtown office building? What about electronic transit advertising? Pick a couple of tactics and focus on them. If they don’t work, try something else. There are many choices!

If you haven’t already, consider trying the e-newsletter and see how that works. Promotional e-mail blasts and e-newsletters – proven sales tools for many – are relatively simple and inexpensive to produce. Set a goal, track it in your reservation system and give it time to work. If it doesn’t meet your objective within a reasonable and measurable period – say, four or five months – then re-allocate the dollars and try something else.

In your Public Relations efforts, it may make sense to add a strategy that appeals to bloggers. It’s a whole new talkative, loud, and crowded world out there, and growing quickly (you may have already read an online travel journal about someone’s Christmas vacation and his or her stay at a particular hotel). Blogs are being read by more and more journalists. And they offer perspectives and insights which are being broadcast loudly. This is called “electronic word of mouth.”

Ultimately, your strategic plan should fulfill your vision and mission statements, but also ask yourself:

• How well do we know our customer so that we are making the correct marketing decisions?
• Do we want to look at less traditional advertising for this year and see how it works?
• Are we being creative in our approach?
• Do we understand the various tools and what they can accomplish?
• Are we being selective in the tools we are choosing and giving them enough time and dollars to be successful?
• Should we try public relations to get that all-important, third-party endorsement?
• Are we abandoning a particular tool if need be and going on to try something else?

In the larger scheme, patience is required when it comes to putting your key message and brand positioning out there. Don’t abandon these too soon. It can take a full two to three years for the public to associate and retain your special message(s). Behind the scenes, you may be bored with them [the messages], but they still may be working at building relationships and creating awareness, and ultimately converting leads to sales.

There is no right or wrong answer as to how to spend your marketing dollars. But if you don’t keep up and try some of the new methods, you risk falling behind. HVS Marketing Communications can work with you to assess the strengths and weaknesses of your current sales, marketing, and public relations plan(s); assemble a new and more comprehensive plan; or coordinate efforts to help you take advantage of some of the numerous opportunities at hand.