Outdoor: a Channel Growing in ImportanceNeil Eddleston, JCDecaux Worldlink
Arriving at and agency in New York recently, I was struck, as I always am, by the mild incongruity of the positioning of outdoor advertising in the US. Turn right for traditional or main media (television, radio, press), turn left for non-traditional media (out- of-home and assorted tactical activities). With a European hat on, the idea of out-of-home being considered anything but mainstream and a ‘main’ medium seems somewhat odd. Outdoor is, in the opinion of many, the oldest and therefore the most traditional advertising medium there is.
However, when it comes to outdoor advertising, this is not all that divides ‘old Europe’ from the relatively young North America, at least on the surface. In Europe, outdoor is clearly seen as a national broadcast medium. In the US outdoor marketers will state strongly that a significant majority of their business is local advertising – up to 70%. Local business in Europe is relatively minor, so why the difference? In the main, it is just terminology.
For a major US advertiser, buying just the Chicago market is seen as a local buy, irrespective of whether the buyer goes on to buy several other Designated Marketing Areas (DMAs). The fact that the Chicago DMA is both geographically and in population terms larger than many European countries but is still considered a local buy says a lot about the prevailing attitude of US buyers to the outdoor medium. A historic lack of outdoor media owners offering nationwide product has ingrained this attitude in clients of the medium. They have, to a certain extent, been slow to change their mindset as the industry has consolidated and is increasingly able to offer a national buy, the precursor to the contemporary style of out-of-home we see particularly in Europe.
CONSOLIDATION STILL DRIVING GROWTH
The benefits of consolidation in driving future growth have not therefore worked through in all markets, but for different reasons. As discussed in an earlier Admap article (1), out-of-home is arguably the most consolidated advertising medium, with three companies, Clear Channel, JCDecaux and Viacom Outdoor, now accounting for one-third of all the advertising dollars spent globally. Consolidation of the media owners allows a relatively small advertising sector to invest in areas required for growth in a way the old, fragmented industry could not. The broad geographic base of the large out-of-home companies gives the critical mass needed for these developments, given the relative size of outdoor from market to market. (see Figure 1)
This consolidation in ownership has allowed the industry to develop new products that extend the reach of out-of-home by extending distribution into new areas, in the US and Asia particularly. This makes it the most viable alternative to existing fragmenting ‘main’ media for delivering mass-audience coverage. The expansion of Aegis poster specialist Posterscope, and the formation by the WPP Group of a large global outdoor-buying division with the merger of Poster Publicity Limited and Portland Outdoor creates another means by which outdoor will be easier to plan and buy in a scalable manner.
QUALITY PRODUCTS CHANGE CITY-CENTRE PLANNING
This product investment means that a similar street-furniture outdoor advertising product can be seen throughout Bangkok, in Singapore, Sydney, Boston, San Francisco, Chicago and in the very near future in New York, where the authorities are currently deliberating on the contract award. The quality of this product format in both appearance and utility to city authorities has led directly to a change in legislation in Japan. Japan, like the US, has introduced the street-furniture 2m2 panel format into out-of-town shopping malls throughout the country. For the first time, it is also permissible to have street furniture advertising penetrating the business and retail centres of Japanese cities. JCDecaux signed the first contract with Japan’s second largest city, Yokohama, last year.
This is a significant development, given the size and importance of Japan as an advertising market and the relative importance of outdoor within mainstream advertising in the country. Asia as a whole is now consolidating ownership and following the US and European example, with increased use of modern street-furniture formats, more appropriate to locations where high levels of out-of-home audience exist. Following Singapore, modern street furniture has also been introduced in Bangkok and Macau, and is developing in mainland China. Thus, growth is driven by increased distribution of quality products to venues with relevant audiences.
TECHNOLOGY, BUT NOT AS YOU THINK YOU KNOW IT
What this type of development highlights is that it is not necessarily the high-end, complex technological developments in out- of-home that are driving growth. On the contrary, existing expert knowledge, positioning appropriate product where audiences are, is key to what makes the medium increasingly relevant. Lady Bird Johnson, the wife of President Lyndon Johnson, was credited in the 1960s with spiritual leadership of the movement that resulted in the Highway Beautification Act 1965 and led to the removal of many billboards and a firm system of outdoor regulation.
There are many people in the US concerned with the development of the electronic billboard format that would in effect be large outdoor televisions with continuous movement and action. Just because technology makes certain formats increasingly possible does not mean that regulators will not seek to limit implementation on safety grounds. Although there may be more panels of this format, the development of these technologies is likely to be limited, in my view, based on cost and simple visibility issues, and largely restricted to indoor environments.
Much more probable is the development of posters that change at fixed intervals, limiting the amount of movement and allaying fears of driver distraction – for which, incidentally, there is no evidence. Externally, we are therefore more likely to see the expansion of scrolling billboard and small formats, where the whole poster panel moves, replacing the more unreliable and aesthetically criticised ‘trivision’ boards. The clever technology here is the increasing use of GSM (global system for mobile communications) to allow flexible displays and daypart selling from a central location. The main growth in more TVstyle outdoor formats will be increasingly in the retail environment.
FINALLY, WE CAN MEASURE IT
The other major development for out-of-home is in accountability. There is now a growing consensus with regard to the basic building-blocks required for audience measurement in outdoor. The announcement in the US of the launch of the new Traffic Audit Bureau (TAB) database of audience movements past panels is significant for two reasons. First, it removes the frequently criticised inconsistency of reported audience-flow measures between media owners on similar stretches of road, and provides a consistent base that can regularly be updated. Second, and significantly, the recent acceptance for the audience measurement project in Chicago that volume of OTS (opportunities to see) cannot be generated solely from within an economically viable travel survey means that it is critical that TAB data are accurate and consistent to generate weight of OTS. That OTS is required from a measure external to the travel survey itself is in line with best practice in Europe and Asia.
This further enhances the consistent global approach to audience measurement. On the other side of the world, Australia has established a joint industry committee to create the outdoor measurement system for this market. Although it is premature to say what this body will decide, I am optimistic that the growing global consensus on methodology will influence the decision they take as to the required approach for Australian outdoor measurement.
The US has, in addition, moved to adopt a definition of contact based upon actual contact with the advertising message, or ‘likelihood to see’ as opposed to the more subjective opportunity to see. Whereas OTS is quite accepted in other main media (although the relevance of this is open to debate), the fact that posters are not an actively consumed medium has always made a conventional OTS measure suspect for the out-of-home sector.
In calling a tender for a new ‘visibility adjustment’ (VAI) measure, to be used to adjust passages to actual contacts with an advertiser’s message, the US is merely acknowledging best practice in many other markets and embracing the current global outdoor-measurement paradigm. Within this, most countries now acknowledge that although a magazine ad may be consumed in the same way by whoever opens the magazine, wherever they do so, the ‘consumption’ of advertising on individual poster panels is very different, depending on the nature of their location. For this reason it is almost universally accepted now that some form of panel classification is necessary within the audience-measurement process. This will continue to boost the credibility and relevance of the medium to advertisers.
The wide use of external OTS harmonised with a travel survey and a definition of contact based upon likelihood of a contact with the advertising message itself means that there is now effectively a global consensus on best practice in audience measurement for outdoor, putting it more on a level playing field with other main or display media. I believe this will be significant in the future development of the out-of-home medium as a credible alternative to other media, which increasingly cannot deliver broadcast coverage.
‘It is not necessarily the high-end, complex technological developments in out-of-home that are driving growth . . . existing expert knowledge and positioning products where audiences are, are key to what makes the medium increasingly relevant’
OUTDOOR, A RELEVANT SHORTHAND
This brings us to the final significant development, digital media. This first has an impact on out-of-home in a guise mentioned earlier, that of penetrating areas where audience now exists. Among the most significant retail players in the US and the UK, retailers Wal-Mart and Tesco have both expanded their in-store TV portfolio. This is an area where moving ads, not dissimilar to broadcast TV, become relevant – yet they still need to be tailored for the environment.
However, I believe there is a more significant digital development for out-of-home, aligned with the growth of internet usage.
As younger people move through to older age profiles, a growing number become familiar and comfortable with the technologies of texting and accessing the internet on the move. Even in-home, the expansion of broadband access, where Europe and particularly US penetrations have lagged behind Asia, means the internet increasingly competes with TV for people’s attention. This is in some part responsible for the absolute displacement of TV viewing activity (2), but there is also evidence that broadband homes access the internet more frequently during commercial breaks than is the case in standard dial-up homes. The rapid development of broad-band puts further pressure on levels of TV viewing, particularly by the young.
Further, some particularly active younger groups increasingly obtain press media via the internet or text-push to their mobile phones. What these demographics increasingly seem to want is a shorthand for information that dovetails with their time- pressured lives. In this way of living, press is consumed in abstracts. Outdoor is the purest communication shorthand, with messages conveyed in the simplest direct form, and fits the expectations and desires of younger groups. At the same time, this outdoor presence has a ‘bricks and mortar’ effect for brands and companies otherwise known only to exist in the ethereal world of cyberspace. People understand and believe that companies advertising on outdoor are established companies and, as companies of which they have little experience target more and more messages at them, establishing trust will be increasingly important. Outdoor has the ability to bring the ethereal into the real world, and the reach to do it well.
Here technological innovation does have a role to play but in a less ‘Blade Runner’ manner than some have forecast – at a more human level. Through cooperation with companies such as Hypertag, out-of-home can generate interaction with consumers able to opt in to further communication via their mobile phones. There are several other similar interactions making a combination of the display out-of-home and direct-opt-in interaction of mobile telephony a significant communication opportunity.
KEEPING ON KEEPING ON
The future of out-of-home is based on doing better what it has always done: reaching people at a time that they are available to view with relevant messages. This will not require Star Wars technology but the clear application of what the industry has already developed. At the same time the industry must continue to invest in accountability to create a truly comparable medium.1. N Eddleston: A new outdoor medium in the new world. Admap, July 2000.
2. The Digital Future Report. USC Annenberg School Center for the Digital Future, September 2004. This article was first published in Admap magazine. To subscribe visit www.warc.com/admap