Monday, May 10, 2010

Out –Of-Home Ad Firms Get Their Act Together

Out of home advertising has been around since the cave man. In a world gone crazy with digital options, we might wonder whether its efficacy is being challenged? Certainly it has never achieved the share of advertising in Australia that it commands in other developed markets, ironic given we spend more time outdoors than most other nations. Is there a chance out of home can grow its share given the inevitable launch of more competitors in the media sector?

Last week I had the privilege of chairing an out of home panel at the Media Federation of Australia’s NGen conference, attended by the younger members of our media industry. The panel included four CEOs from the sector. During the course of the hour, I was struck by many things, but mostly by how much had changed since the early ‘80s when I began my media career.

The industry is far more professional and formidable today than it was then. Ooh! Media’s Brendon Cook spoke to the huge consolidation of operators we’ve seen, and how that has made it easier and more efficient to buy national coverage. APN’s Richard Herring talked about the dramatic improvement in real estate use, better site presentation and the introduction of video formats. AdShel’s Steve McCarthy spoke about the exciting move away from static sites to ‘consumer dialogue’ using mobile technology. Eyecorp’s Mike Tyquin discussed the move from a largely roadside broadcast medium, to one that now offers a breadth of options in more engaged environments such as transit, retail precincts, office towers and universities. We have also seen the introduction of shorter length campaign options, and much faster copy changes.

All of the operators are excited by the digital age and keen to keep embracing new opportunities. Importantly though, Cook referenced the challenge of video formats in roadside inventory. A major study is currently being undertaken to assess the safety impact on drivers and pedestrians, which hopes to influence government legislation around this very tricky issue. This is less of a problem in retail and pedestrian environments, where we can expect more video options over time as panels become increasingly affordable. Herring was excited about the increased flexibility this will provide advertisers in potentially being able to schedule time sensitive advertising in different day parts. Tyquin however cautioned that video formats will need to do more than just allow copy changes every eight seconds to justify the investment in screens, consumer interactivity is key.

And most recently with the launch of MOVE (measurement of outdoor visibility and exposure) we have seen the industry tackle its biggest issue, the lack of a measurement currency. This is a huge step that has taken years of lobbying to achieve, and a massive investment from the OOH companies. It’s early days, but McCarthy was encouraged that the integrity of the data was not being questioned given the considerable industry consultation during the system’s development. All of the panel agreed the data is starting to change the types of briefs and conversations being had about OOH. But will it increase OOH’s share of advertising? Cook felt an increase from 4 per cent to 6 per cent was not unrealistic in the shorter term, with growth coming from increased investment in all formats as well as new technologies.

Herring made an important observation though. While the MOVE data is a breakthrough, ultimately advertisers are most interested in the results that OOH can deliver. To that end, Starcom’s ongoing IntenTrack study is helping us to quantify the effect that OOH options are having on influencing behaviours, particular in conjunction with the newer digital media options.

The good news is that OOH options are still very effective across every product category we measure, and are helping to stimulate behaviour in other digital media channels as well as influencing intention to buy and direct sales. In any given month, an average of 27 per cent of all people recall seeing OOH advertising in specific advertising categories. This is lowest for skincare at 21 per cent and highest for fast food at 38 per cent.

If we drill into the beer category, exposure to OOH beers ads dramatically increases claimed brand behaviour on every metric. Consumers are 55 per cent more likely to purchase, five time more likely to talk about and recommend the brand, twice as likely to look for the brand in store or on-premise, nine times more likely to attend a beer event, and nine times more likely to search online or visit the brand website. The results are similarly impressive in other categories.

It’s amazing to see how far the OOH industry has come, and its future is looking bright. Only six years ago, it was impossible to get these guys to co-operate on industry wide initiatives. Now Herring quotes their biggest recent achievement as the industry’s coming together to jointly promote effectiveness and launch the OOH currency, without “the knives coming out and blood on the floor”. I couldn’t agree more. Whether the sector can achieve its lofty goal of doubling advertising share remains to be seen. But I really hope they do, because here is a group of fierce competitors who are investing in their future and have finally realised they are much stronger together than apart.

Written by John Sintras for 06.05.10.

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