• by Erik Sass  @eriksass1, April 27, 2007

"It's a gold rush." The phrase reflects both the mushrooming presence of out-of-home networks and the increasing attention from advertisers large and small. The explosion recently drove industry leaders to form their own association, the Out-of-Home Video Advertising Bureau.

At the out-of-home video panel at MediaPost's Outfront Conference on Thursday, it was easy to see the value proposition for each sub-category. The industry was united in the medium's reach and possible scope.

Cliff Marks, president and CEO of National CineMedia, says that since cinema is part of American culture, it allows advertisers to reach consumers with "40-foot screens, Dolby surround sound, in a lights-down, highly engaged environment."

Likewise, Mike DiFranza, the president and CEO of Captivate Media, alluded to the appeal of video in office elevators, which allows advertisers to reach well-heeled workers seeking to avoid eye contact during vertical transit. Jim Deveau, senior vice president of marketing for the In-Store Broadcasting Network, was even more basic: "There is no off button; there is no channel to turn." What's more, IBN video content is "involved in the purchase decision stream," close to the cash register.

By investing heavily in their digital infrastructures, all the networks boast a high degree of regional and local target access. IBN, for example, takes content to the level of grocery-store aisles. David Sommer, managing partner of MEC Retail for Mediaedge:cia, confirmed that "local-based targeting is huge," with major brand advertisers like Campbell asking how to get into digital out-of-home. Stephen Diorio, president of Profitable Channels, praised digital out-of-home video's potential to be a "triple threat" of "targeting, national reach and measurability."

But there are hurdles still to be cleared, according to Diorio. For one thing, the "ad community is looking for scale" in the networks, which would justify "throwing their creative talent at it." This requires grouping the various out-of-home video networks, which in turn requires metrics that allow measurement across different outlets.

The network execs present acknowledged this need, with DiFranza calling for measurement approaches that allow advertisers to "analyze and rationalize the different networks to combine them ... in a critical manner." Putting himself in the advertiser's shoes, he asked: "How do you normalize the ratings count?" Sommer reminded listeners of the useful role media agencies can play. "I don't blame networks for going to clients directly," but the issues of scalability, measurement and coordination suggest a need for third-party involvement, he said. Right now, agencies "are cobbling it together."

Beyond the major brands, IBN's Devau said out-of-home digital video provides a unique opportunity for second- and third-tier brands that are often priced out of mainstream TV advertising. By spending their smaller budgets on place-based digital video advertising, they find a cost-effective way to join the "evoked set" of products for a particular category that other brands dominate through heavy spending.

Finally, Sommer forecast increasing interactivity between place-based video installations and "small screen" mobile devices carried by consumers. Noting the success of the "Shopping Buddy," which allows consumers to receive personalized offers from grocery-store owners, Sommer mused that similar functionality may soon extend to mobile phones and PDAs, in coordination with video displays.