Remarkable Growth. Limitless Potential

Digital Advertising companies are where you should place your strategic capital.

In a January 10, 2007 article in The Wall Street Journal, Shira Ovide wrote, “Last year was a stellar one for companies that specialize in out-of-home advertising, a longstanding business of selling ad space on billboards, posters and other public spaces. Companies in the once-sleepy business posted double-digit percentage growth in profit and stock prices.”
Ovide went on to explain that while overall spending on advertising is generally expected to slow in 2007, forecasts claim that spending on out-of-home advertising will be the second-fastest growing marketing sector – right behind the Internet.
Importantly, this growth “is not only sustainable, but also is accelerating thanks to the introduction of digital billboards with television-quality ads that can be changed,” Ovide emphasized.
Some industry analysts place out-of-home advertising on an even higher pedestal than online advertising. In a September 12, 2006 article issued by New York-based MediaPost Communications (an organization that helps its 50,000-plus members plan and buy traditional and online advertising), Joe Mandese wrote, “The hottest form of digital media on Madison Avenue isn’t online. It’s out-of-home. Digital out-of-home networks are popping up virtually everywhere: in stores, in theaters, in health clubs, in office buildings, and perhaps most importantly of all, on media planning flowcharts.”
The lure of digital advertising media is a worldwide phenomenon. Screen Expo Europe, held in London for the past two years, has attracted armies of suppliers, users, retailers and network owners in the digital advertising industry – over 3500 pre-registered visitors from 39 countries in 2006.
The popularity of out-of-home digital networks over a growing spectrum of industries and venues comes as no surprise to marketing professionals. Technological advancements, which have accelerated over the past two years or so, falling prices, fragmentation of traditional media advertising, and excellent results from out-of-home digital networks, have fueled the growth and transformation of digital signage deployments. No longer is this relatively new medium reserved for a niche of the industry with stand alone, one-screen installations. It is now a world-wide, multi-industry trend that taps into the power of networked systems with hundreds or even thousands of
screens.
“We’re really very excited about the potential that digital affords our industry,” said Paul Meyer, president and chief operating officer of Clear Channel Outdoor Holdings Inc., the titan of the worldwide out-of-home advertising industry. “Over time, it's going to be truly transformational.”
Pete Winkler, director in the entertainment and media advisory practice at PricewaterhouseCoopers, concurs. “While there’s been a lot of hand-wringing about the health of print and TV advertising,” he pointed out, “there’s a bit of glee and unbridled bullishness on [the health of] out-of-home advertising.”
The overarching shift to digital technology is largely behind this renaissance of an old and established industry. PricewaterhouseCoopers’ report, Global Entertainment and Media Outlook: 2006–2010, makes this clear. “Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital distribution of content,” said Wayne Jackson, global leader of the firm’s Entertainment & Media Practice. “As this shift continues, we see more revenue opportunities for entertainment and media companies.”
Profitable Channels is a marketing services company that helps some of the world’s top brands reach their markets better and grow faster at lower costs. In a report on the out-of-home digital advertising networks industry, the company pointed out that marketers are investing billions of dollars in them because these networks “solve many of the problems plaguing traditional media and deliver five unique capabilities: measurable sales impact; point-of-purchase proximity; customer targeting; purchaser relevance; and local sales support.”
The report went on to say, “These networks are valuable marketing and communications channels – providing superior cost to sell, market coverage, marketing-resources control, and alignment with customer behavior relative to other media. They are a high-return media investment, delivering greater relevance and more measurable sales impact closer to the purchase decision-making point to marketers that rely on retail channels or target high-value clients.”