Alternative Is Cool (and Hot)

As TV and the Internet battle for ad dollars, a new kid on the block is stealing the show. Spending on new types of out-of-home media, such as digital billboards and video screens, climbed 27 percent last year to $1.69 billion, according to media research firm PQ Media. That trend is expected to continue in 2007, with 28 percent growth, says the company.

Of course, alternative out-of-home advertising is working off a much smaller revenue base than more traditional media. So its soaring growth rate naturally compares better to the 10.6 percent rate for total out-of-home advertising, or the 6.4 percent rate for the ad industry as a whole in 2006.

The emerging out-of-home group is benefiting from the consumer fragmentation transforming traditional media, according to the PQ Media study. Unlike its mass media competitors, alternative out-of-home advertising isn’t subject to viewers’ changing channels or Web surfing. It’s also impervious to audience fragmentation.

Digital billboards are the fastest growing part of alternative out-of-home media, up 55.4 percent to $232.2 million. Video advertising networks made up the biggest segment in the category, accounting for $1.01 billion, or 60 percent, of total spending. This segment includes theater, office, store and transit media areas, led by companies such as National CineMedia (theaters) and Premiere Retail Networks (stores).

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