An ePublication from Ecommerce Partners

Out-of-Home Video Advertising & the OHVAB

By | September 12, 2006 12:22 pm

The advertising industry is getting more and more excited – when does it get anything else? – about prospects for a big new venue to place ads and get revenue. That’s something to get excited about, of course, if your life is inventing or placing ads.

Among many futurist movies, the Stephen Spielberg / Tom Cruise collaboration “Minority Report” conjured up an entire environment filled with screens of one kind or another – any flat or even curved surface will do – for the purpose of bringing us messages, usually commercial in nature. And sure enough that vision is coming true.

The venue that’s currently enthusing ad-people is what’s being called in the business “place-based television” or “out-of-home networks”. It’s essentially a subdivision of the perennial form of advertising, older than Madison Avenue itself – the “outdoor media” business (billboards and placards, to you and me) – but one which uses all the bells and whistles, not to mention light-emitting diodes where possible, of the digital age. And incidentally, it happens to find itself technically indoors, most of the time.

Ten new ventures in this field are reckoned to be starting every month, with a total of 700 having gotten established since 2002. According to a new report from a Westport, Connecticut-based marketing consultants Profitable Channels these viewing opportunities are fast appearing in stores, in atriums, lobbies, health clubs, coffee shops and the like, and they now account for $1.2 billion of the nation’s advertising expenditure. That puts them, in aggregate, in the same league as a major TV network daypart.

New opportunities for the almost literally captive audience that they can command keep occurring to entrepreneurs. Why not have a screen in the rest-room of a transit station, or in a high-rise elevator, or by the pumps at a gas-station?

Big stores are still the most obvious, and for now the most rewarding site-choices. Outfits like the In-Store Broadcasting Network, Premiere Retail Networks (PRN), and SignStorey represent the fastest growth and greatest potential reach. In-store networks may currently be available only in the country’s top 25 advertising markets, but Profitable Channels estimates they have the potential to reach a massive 93 percent of the U.S. population. This is of course huge – and for advertising analysts it makes the sector that much more attractive than my own frequently voiced enthusiasm – video marketing to mobile devices, which I’ll readily admit will take a long time to be in the hands of 93 per cent of Americans!

Profitable Channels partner, and author of the report, Stephen Diorio also teaches marketing at the George Washington University. He says that his assessments of the size of the out-of-home sector are deliberately pitched conservatively, and that growth may be even faster than he formally estimates:

“It’s a lot like when all the dot.coms were coming out. Anyone with a venue and a good audience is launching something and calling it media.”

But the seriousness of the sector is being attested to elsewhere. Not far from Profitable Channels, another set of analysts PQ Media operating out of Stamford, CT are soon to bring out their own report. So far, says Leo Kivijarv, vice president for research,

“Anecdotally, what we’ve heard is there is a difficulty selling this stuff to advertisers the first time, but once people try digital out-of-home, they are re-upping at a very high rate because they are seeing a stronger ROI.”

And maybe a sure sign of a communications trend that’s unstoppable, the sector now has its own trade association, the Out-of-Home Video Advertising Bureau, or OHVAB.

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