Taking It to the Street

Capsule:  Digital out of home distribution promises to be an explosive growth industry for content and advertising as our cities' infrastructure is rebuilt.  As America becomes increasingly urban, how natural and profitable can links between individuals and the physical digital marketplace become?

PQMedia


Hapless "Hero" Homer Simpson says "DOH!" when he realizes he's lost--it's one of those frustrated exclamations that goes with a smack to your forehead from the palm of your hand. We've all had our share of DOH moments over the last 18 months, mostly when we've realized we've made some wrong turns on the way to mouth-watering opportunities. For some of us, DOH moments lead to opportunity, as wrong turns turn right.


DOH--Digital Out of Home Media--is also a multi-billion dollar distribution industry with explosive potential if guided by a functioning GPS over the next few years. The largest Out of Home advertising businesses in the US still operate on simple signage. They don't yet employ sophisticated media management systems, nor are most of their outdoor signs electronic or digital--the exceptions being in places like New York's Times Square and a host of burgeoning Asian and South Asian locations. Tomorrow's big DOH companies can include today's signage giants--Clear Channel Outdoor, CBS Outdoor, the giant French JCDecaux Group, Lamar Advertising Company, Pattison Outdoor Advertising, China's Focus Media Holdings and others--if they rethink their business.


The evolution of outdoor advertising into true DOH will require strategic shifts. Rethinking the locations of ad signage from alongside highways and on the sides of buildings to a mix of internal and external retail, institutional and private real estate will require B2B partnerships and revenue-sharing opportunities that transform wholesale and retail economics. Translating digital signage from linear pictorial design with a single ad message to a multi-purpose digital screen design that can be used for IP video as well as advertising will engage big content and big distribution; both should want to look at DOH as an interactive product extension of their in-home and wireless networks. Broad experimentation with a variety of distributed power and content sources should make DOH sustainable, efficient and capable of leveraging what works through a network of retail and institutional partnerships reaching millions of screens. Finally, interactive capabilities will give customers walking by DOH displays an inducement to watch and buy, building on wireless partnerships that promise to generate healthy stand-alone businesses with strong network support


A group of trade associations and service bureaus, including the Outdoor Advertising Association of America, the Out-of-Home Advertising Bureau and POPAI, are trying to establish quality control standards for broad and deep DOH deployments for their US member companies and ad clients. But, as with most trade associations, the most active members are firmly entrenched in their original businesses with little appetite for the risks of true conversion.


Cisco, AT&T and a few other high tech product and distribution masters have shown their conversion appetite with some new DOH distribution products. Both companies have developed digital media systems that manage and network thousands of screens, including digital screens on site, in stores, in branches, on campuses and on the desktop. The products inside include Enterprise TV, enabling major office facilities to be networked into media systems with a combination of traditional news and information content and company-produced reports for employees. Desktop Video products display on-demand videos pre-selected by businesses or hand-picked from collaborative industry sources and interspersed with live webcasts for big meetings and small demonstrations. Major government and private enterprise facilities as well as colleges, universities and libraries are just beginning to use digital media systems and digital signage to redistribute pre-selected content that includes personalized messages for their audiences. However, big money isn't part of Enterprise DOH. It's a cost-savings product that could take years to carry its technology weight.


In the US, the new distribution sources for DOH are not yet talking about building on the true heritage of outdoor advertising: the display of huge, powerful ads to catch every eye in a crowd. For outdoor advertising up until now, the ad has been the only thing, the only content worth displaying, and its creative artisans have been highly specialized and well-rewarded. Their art gives us ideas when a larger-than-life sign dwarfs the events of our day and makes us take notice.


There may be two important things missing from this very broad range of opportunities circling DOH media development. The first is an original product and the second is an economic system that will initially support the product and then produce from it a strong financial return.


DOH used for enterprise-and-branch business videos, messages and reports can be an efficient distribution channel. It will save but it won't make money serving its clients from the inside. To become a big business, like Bloomberg, it has to go outside. Bloomberg, Reuters, Thomson and WSJ/Barron's offer examples of closed network distribution systems that sell specialized data and messaging for clients who need access to in-time financial results, predictive models and international headlines. Ambitious new DOH distributors can add value to these already established businesses with product extensions built on authenticated interactivity. New smart screen systems that both count and identify their viewers have the potential to drive revenue by targeting messages to mobile devices, when audiences are "sniffed" as they pass by a smart DOH screen ad.


Wholesalers and retailers can make broad use of DOH with technology-enabled direct marketing and commerce. First, actual products must be built that integrate targeted marketing, sales, couponing and fulfillment from the store floor to an opt-in network of hundreds of thousands of mobile devices. Customers will treat their favorite retailers like clubs, trusted advisors and purveyors of valued merchandise. Amazon, Apple and eBay have integrated every piece of their fulfillment chains into their online and device businesses, but most DOH advertisers have yet to build place-based links to locations where groups of people pass ads and get ideas. Apple retail stores come close, but they're only stores. In the end, stores take up too much space and require too much distraction and effort from the retailer and the customer to be friction-less and sustainable.


What other new business models are DOH-inevitable? Theatrical distribution of new releases are due for another evolutionary leap, following their cost-saving move to digital. Theaters and arenas have great marketing and commerce advantages. They aggregate audiences of like interests around the joy of entertainment.


Smart DOH screens and systems will be able to display films, concerts and sports alongside the real events, making group entertainment better than virtual reality. Theaters are also prime real estate for highly creative advertising forms. Sparingly displayed, relevant sponsors will be able to interact with audiences simultaneously on big screens and on handheld mobile devices. What if your new theater was a cell-phone friendly place, with a managed digital screen that communicated with your mobile and you could see the movie in both places at once? Before you left the theater, your mobile would be loaded with relevant video and special offers for the next syndications steps, including VOD and DVD sales. On the road to a whole new set of entertainment values, arena and theater owners--distribution--and the artists themselves--content--will invest in original, revenue-generating digital experiences.


In order for this mature DOH universe to take shape, priority must be established amongst the likeliest revenue drivers. New product families must be developed--likely by today's distribution powerhouses--celebrating targeted content and thriving on being in more than one place at one time. Advertisers already understand that their impact depends on multi-dimensional reinforcement: on TV, at home, in print, on an electronic reader, on the train, on mobile phones and on the digital signage in stores and on the streets. In order to afford all of this media dimensionality, US and international businesses will have to force bundled economics that bring media combinations into newly efficient packages. The desired outcome: reestablished media values and a new advertising market that spends at least some of its time on the street.