Suzanne Alecia: We're very close to putting out our industry guidelines. We're essentially through the last draft, and we'll be presenting them to our board of directors internally next week. And very shortly after that, we will be publishing them to the industry. That means getting them into the hands of the agencies, and working with the sales organizations of our member companies to make sure they have all the right information to present. It's still an ongoing process, but very soon there will be the guidebook out there.
DO: Can you give us a hint?
Alecia: It's all about audience measurement and metrics. It's going to be a guidebook for the networks to report their audiences in a consistent, logical and comparable way. And moving away from archaic methods like gross venue traffic, which is not a sufficient audience metric. What advertisers want to know is what the audience is to each network. That's what the networks will give them.
DO: Nielsen recently began releasing "pocketpieces" -- the standard tool used by media planners and buyers to evaluate traditional television audiences. Is that going to become an industry standard for out-of-home video network audiences?
Alecia: I think that will depend on the value that the Nielsen stamp has in the marketplace. We're being careful not to mandate a specific measurement provider. One company may measure one form of out-of-home media best -- and that may not necessarily be Nielsen.
When we began the process of developing the guidelines, we started with a dialogue with all the various research providers -- everyone from Nielsen to Arbitron to Scarborough -- to make sure they understood what we were doing, and whether they could follow them. And therefore, the reporting, whether it comes from Nielsen, or Arbitron, or Scarborough, or wherever, would be based on the same math, and reportable for all forms of out-of-home video.
The tool the planners really need is the audience data.
DO: What's next after that?
Alecia: We're in the beginning process of developing an online planning tool. The objective is to have a central resource for the networks to put their network and audience data in one place so that agencies can pull that data, and use it to generate audience rankers, cross-network schedules, etc. The eventual goal would be to have that tool talk to the current desktop planning tools that are currently used, whether it is IMS or Telmar or whatever the agency uses. And have that be at the fingertips of planners and buyers. A version exists today on our Web site, but it will most certainly improve. The feedback from the agency community has been extremely positive on this project.
DO: Describe your first few months on the job. What have your priorities been? What's surprised you most about the way the out-of-home video market is developing?
Alecia: I've been here for five months now. And the priority has been the audience guidelines. Now that we're close to publication date, the next big thing we will be focused on is planning our fall OVAB event. It will be a day that is designed for agency and client education specifically, so that they can learn everything and anything they want to know about out-of-home video advertising, walking away with some real information they can act on. That's our constant theme and charge.
Other than that, I've been doing face-to-face meetings with agencies. It's certainly been a big task. The meetings have been the most surprising. When I meet with agencies, I try to get as many disciplines into the same room as possible: planners, creatives, television buyers, outdoor buyers, account directors, really anyone who could influence the decision to include out-of-home video. I've been pretty successful. But on many occasions, the people in the room are introducing themselves to each other for the first time, and they work on the same accounts. It's been gratifying that we can bring those people together.
DO: We recently wrote about some interesting planning tools one of your members -- SeeSaw Networks -- has developed that focuses on how out-of-home video impacts consumers at various "life stages" that are ideal for marketers to reach them with an advertising message. Is that something that could be broadened out for the rest of your membership?
Alecia: We are actually going to be conducting a fair amount of industry research on our own. One will be an OVAB-funded media impact study. We've been talking to [Outdoor Marketing Association of Canada] in Canada, and they've done some interesting studies that will factor into what we do. We'll be issuing an RFP to conduct that research and we're talking to many, many other companies and associations about what we can do together.
The time-frame will definitely be soon. By midsummer, we will have some research out into the marketplace.
DO: How would you characterize the buzz around out-of-home video right now?
Alecia: Hot. We did a quiet awareness study of OVAB among agency executives about six weeks ago. The bureau is only about 16-months-old, but we had very good unaided awareness in the industry. I'd like to do it again in a year and see what happens, because I feel we're going to grow now that the industry and the networks are coming together and starting to approach the marketplace with a more unified voice. There is a confidence out there, and that begets more confidence.
As an example, our Agency Advisory Board has grown to 33 executives from 25 major agencies -- we started with six people just a year ago. They have been extremely involved in our missions, and you can tell from their attitudes that this medium is the next 'big' thing to watch. Respected trade press publications are dedicating entire sections to reporting on this industry, whereas a year ago, there was maybe a mention here or there. That's extremely gratifying. Marketers have to figure out where there consumers are, and it's such a natural commonsense evolution for me that they're out-of-home. And once we get the audience numbers behind that and start presenting it like other media, I'm pretty confident that ad revenue will follow.
DO: What are the dollars now? Various studies have estimated that the out-of-home video market is about $1 billion, and that the cinema advertising guys are about half of that.
Alecia: That's about right. But if you look at the opportunity of the impressions available in the out of home space vs. the dollars, it is wildly underrepresented. PQ Media has research indicating this medium will grow to $3.2 billion by 2011, but that was before this industry started to come together through OVAB. I think we will see that revenue will grow even more rapidly than predicted.
DO: You mentioned under-representation. That is a classic theme with new video advertising trade associations. It's something the Cabletelevision Advertising Bureau leveraged masterfully during the 1980s. And it's a theme the Interactive Advertising Bureau has used for online media, too. Do some back-of-the-envelope math for us and tell us what you think the imbalance is right now between the share of impressions out-of-home video has with other media vs. its share of advertising?
Alecia: We're working on conducting actual studies to quantify this, but intuitively we can tell the story with time-spent ratios. In 2007, TV (national and local) garnered 43% share of total advertising dollars, according to our good friends at TNS. So, of the $153.6 billion spent, that's about $66 billion. We've seen several studies that show time spent with TV in the range of 25% to 28% over the course of a typical week.
Those same studies show that time spent with out-of-home media, including traditional static billboards, is about 33%. That seems reasonable. Yet only 5.6% of total ad spend was outdoor, and of that, only $1.3 billion was against our category, less than 1% in fact. So the ratio of TV to OOH video/digital ad spend is a crushing 66:1. Yet, the ratio of time spent is nearly one-to-one, with the advantage to out-of-home. I find that to be a striking imbalance. Particularly when you look at the OVAB membership and the billions of people that are exposed to our networks. Are we going to be saying that in-home TV, or any other media for that matter, is ineffective? Certainly not.
But could we say that shifting a significant share of ad spend into a medium that also delivers billions of ad impressions (in physical places close to purchase behaviors, where ad skipping/avoidance technology doesn't exist, and ad awareness levels are extremely high, the list of benefits goes on and on) could be more effective? I think so.