Commentary

Outside Thinking: Mike DiFranza, Captivate Network

Mike DiFranzaIf you happen to bump into Mike DiFranza in an elevator, he may be the only person you encounter who doesn't look the other way. Chances are, he will be looking directly at you to see what you are looking at while ascending or descending to your destination.

As founder, president and general manager of Captivate Network, DiFranza is one of the pioneers of the burgeoning digital out-of-home video business, and is one of the people responsible for getting it on base on Madison Avenue, and for helping to build out its infrastructure. As chairman of the Out-of-Home Video Advertising Bureau, he's learned to play politics with many of his most direct competitors - all for a common good - getting out-of-home video the same seat at the table that TV, online and traditional outdoor media have always had.

And if you happen to strike up a conversation while riding between floors, don't let the Bostonian's thick Southie accent fool you. He may sound like he's from blue-collar roots, but he's as sophisticated a media mogul as you're likely to meet anywhere between Silicon Valley and Silicon Alley. The "Digital Outsider" caught up with DiFranza this week to discuss the ups-and-downs of creating the world's largest elevator network, and along with it, a cottage media industry.

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Digital Outsider: There's a lot of buzz surrounding digital out-of-home right now, but this didn't happen overnight. Companies like Captivate have been plugging away at this for years. Bring us up to date.

Mike DiFranza: We started Captivate about 11 years ago, at a time when the Internet was really exploding and that's all anybody would talk about. The challenge for us was that Internet companies were being funded in May and by the summer they were worth $1 billion, and the venture capital companies didn't really know what to make of our platform.

That's when I met Guy Kawasaki, the founder of garage.com, an ex-Yahoo guy, at an entrepreneurial symposium. He gave me the best advice ever. He said, "If people want to buy fish, sell them fish." So we changed our name to Captivate Internet In the Elevator, and lo and behold we got onto base.

In the early days Captivate positioned itself as an Internet company. And we really were using Internet technology to distribute our content. We still do. But over time, the word Internet has become synonymous with interactivity, and that's where we're going next.

It's only in the last 18 to 24 months that I finally conceded to myself that I'm not crazy. I always saw this as huge value in our ability to reach consumers where they are, and to reach them with messages when they are close to purchase decisions. It made sense to me, but for ten years I've had to wonder if I was the only one who saw this. Now everyone gets it.

DO: To be fair, Gannett saw it.

DiFranza: They saw it, but they saw it a couple of years ago. But it's taken us over a decade to get to this point. We were lucky that we made the right decisions when we launched and we made sure we stayed true to course, which was that wanted to be the major player in the category we set out for, which is to reach businesspeople in the best place to reach them.

Over the years, we've had opportunities to expand into taxi cabs, shopping malls, airplanes and everything else, but we just felt it wasn't the right time for us to go out and build out critical mass. To really be successful in this space, you have to have critical mass. Look at the cinema media guys. The reason they are so successful is that they have critical mass. There are only two guys who control that entire space. So we've remained true to our course, focusing on building out a network of high-rise office buildings. Yes, we've introduced a suburban office product, but that's not our primary focus. It's secondary for us.

DO: What's next for you?

DiFranza: What we're doing is taking a hard look at how we can create a higher level of engagement for advertisers who use the Captivate Network. We have the same audience interacting with us every day. So in essence, we have a community of viewers. How do we leverage that community of viewers? We're testing texting for people to get more information from the ads. We have been using drive-to-Web for some time, and driving people for more information to our Web site.

Now we're going to test that concept on steroids. For example, we can offer people the opportunity to take a virtual test-drive of a car that they just saw on our screen, and then we can actually arrange for a test-drive for that vehicle at their building. The key is that advertisers want people to interact with their brands.

DO: So you are actually fulfilling your original promise of the 'Internet in elevators'? And you're using the Internet to do that?

DiFranza: We've just hired a woman from AOL to really help us with our online strategy. It's something you'll begin to see more of in the fourth quarter. It's obviously a resource for our viewers, and an engagement platform for our advertisers.

But that doesn't preclude us from doing things offline, such as staging events in office buildings. We've been doing that for years in Canada. Now we want to bring that to the U.S. Not only will people see an advertiser's ads on the screen, but we're laying the infrastructure to provide an event experience in the buildings.

Take an advertiser like GM, for example, or any high-end car marketer. What if we put one of their cars in the lobby of a high-rise office building and then run their ads on our screens in the elevator? We think the location is what differentiates us, and over the next six to 12 months, you will see Captivate evolve and have more offerings that leverage that space. It's all about engagement, that's what everyone's talking about today. They don't necessarily know how to define it or measure it, but they all want it.

DO: When you're not building out the Captivate Network, you're also serving as chairman of OVAB -- the Out-of-Home Video Advertising Bureau -- which you were one of the founding members of. Bring us up to date on OVAB's initiatives.

DiFranza: I would expect that sometime by the end of June or early July, we will publish the OVAB metrics and standards guidelines. What has taken OVAB 18 months to develop and deliver has taken other industries 18 years. We will be publishing the guidelines for measurement here very shortly.

One of the challenges of place-based media, is that place represents such a huge role that you have a lot of apples-to-oranges comparisons here. One network talks about defining themselves and their environment one way, and another network defines themselves totally differently. We think we've come up with something that deals with those differences.

DO: What's next after that?

DiFranza: Infrastructure. We need to put some really solid planning tools in place that allow the agency community to gather and put together information about us as an industry. We are out right now soliciting companies to participate in that process. That is an end-of-year/beginning-of-next-year time frame.

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