• by Erik Sass  @eriksass1, July 6, 2009

Two of the nation's biggest digital out-of-home networks are about to become one. Danoo, a place-based network serving various retail locations, is about to acquire IdeaCast, which operates a video network reaching a captive audience in health clubs and aboard airplanes. Terms of the deal were not disclosed.

As part of the deal, cinema advertiser National CineMedia and private-equity investors Kleiner Perkins Caufield & Byers are also taking minority stakes in the new, combined entity. This could foreshadow more consolidation in digital out-of-home video -- a burgeoning medium that has been constrained by a lack of scale and some redundancy between small networks.

Danoo CEO Aileen Lee said Danoo and IdeaCast were a good fit because they reach the same desirable demos without overlap or redundancy. By combining forces, they offer advertisers greater reach and frequency among well-heeled, educated young adults in urban areas.

"There are a lot of companies in the space that aren't big enough to be prime time yet," Lee noted. "This expansion gives us great reach with a consistent audience with the right content and in the right context." She said she was particularly impressed with the endemic opportunities for health, beauty and various other categories in IdeaCast's health-club environments.

The involvement of NCM gives Danoo and IdeaCast (which are maintaining separate brand identities) access to the cinema advertiser's national and local sales forces, along with its various client relationships.

Conversely, NCM can benefit from Danoo/IdeaCast's technical expertise in important new areas like the integration of mobile technology to allow consumer response. NCM will also be able to offer advertisers more opportunities to reach desirable demos in places (and times) outside the cinema.

NCM CEO Kurt Hall remarked: "This new, larger unique platform will offer media buyers the combination of nationwide reach and the ability to narrowly target messages to specific geographic locations."

Hall also alluded to the need for consolidation in the digital out-of-home space: "As location-based digital media is still overly fragmented, this combination is an important step in our effort to bring greater national reach and more standardized buying metrics to the media community."

In the same vein, Lee predicted more consolidation in the DOOH space in general. She also confirmed that more acquisitions by Danoo are a distinct possibility, noting that the company is "well-capitalized."