The other day, I wrote a story for MediaPost's MediaDailyNews reporting on a new service digital out-of-home advertising aggregator Adcentricity announced that will add a suite of mobile applications, plug-ins, and enhancements to place-based media buys. The move is significant, not simply because it will bring scale and ease-of-use to the rapidly converging mobile and out-of-home media marketplaces, but because it recognizes the inherent synergies between the two location-based forms of media.
And the recognition from the point of view of place-based media, is that mobile is becoming the "clickthrough of digital out-of-home." It's a concept that the Adcentricity people would prefer to soft-peddle for the moment. At least until the industry and Madison Avenue can figure out a proper way of valuing the role of digital out-of-home advertising buys that come equipped with a means of clicking through and initiating a response or call-to-action.
Why? Because they've watched what's happened to the Internet very, very closely, and they've seen how it evolved from a cost-per-thousand (CPM) based medium to a cost-per-click (CPC), and ultimately to a cost-per-action (CPA) advertising model. Not that that's necessarily a bad thing. Direct response, and performance-based media, can be absolutely the right way of valuing media and measuring the return on advertising dollars invested for certain types of products, categories and marketing campaigns. Paid search is a good example. But the problem is that much of the rest of the Internet has gotten painted under that same brush stroke, and we are all witnessing a push to make online display advertising and even online video based on performance metrics, vs. Madison Avenue's traditional brand metrics.
That's bad, because it leaves a lot of media value on the table that cannot necessarily be proved via immediate responses to an advertising message. The current economic crisis is only accelerating the shift to performance vs. branding online. Coupled with technologies that are aggregating, parsing and retargeting audiences via broad-based and vertical advertising networks, online increasingly is looking like a distressed advertising market.
The trend toward performance metrics is something all of traditional media, including digital out-of-home, are keeping a close eye on, for several reasons. One is that all the growth in the advertising marketplace this year is coming from online. That's according to the latest edition of the quarterly tracking study from ZenithOptimedia Group, which predicted that online would be the only medium to see a net gain during 2009. But much of that growth, ZenithOptimedia predicted, would come from search and other performance-based online advertising models.
So if you're the TV industry, and you're on the cusp of finally rolling out some scalable, addressable TV advertising options, you've got to wonder -- and worry. And if you're newspapers, magazines, and radio, which are all in the toilet, you've got to see the writing on the wall, too. But if you're digital out-of-home media, which, with all due respect to ZenithOptimedia's estimates, clearly is also growing this year, you've got to stop and think about which model you will embrace, and where that will ultimately take you.
The truth is, all media are becoming digital. Even print-based media like newspapers and magazines, and even static outdoor billboards, thanks to new 2D codes and other technologies that are effectively giving them a return path with the consumer. But digital out-of-home media is already there - and, when augmented with a mobile application or device, it truly becomes the equivalent of the Internet in out-of-home locations.
Right now, and during the past several years that the digital out-of-home media marketplace has managed to organize itself into a genuine industry -- spawning a trade group like OVAB, and establishing standards, metrics, best practices, creative guidelines, and all the stuff that is making it akin to more established media -- its value system has been based on the value of the audiences it delivers and the relevance of the locations and mindsets it delivers them in. But if digital out-of-home clickthroughs become the new coin of the realm, the value equation will quickly shift from context to behavior, and if that sounds a little like déjà vu, it's because that is exactly what is happening with the Internet.
So kudos to Adcentricity for grabbing the mobile bull by the horns, but not letting it go charging, unbridled, out of the gate. Let's see where this thing goes, how it evolves, and how advertisers, agencies, programmers, distributors and venues all derive value by reaching consumers in new and more powerful ways.
Editor's Note: MediaPost is still looking for a few good ideas from people and organizations offering new digital out-of-home media and advertising models to present at next week's Digital Out-of-Home Forum & Expo in New York. If you think you've got one, please email Erik Sass (email@example.com ).