Captivate CEO, DPAA chair talks 2010 and the future of DOOH

Feb. 8, 2011 | by Christopher Hall

Captivate Network President and CEO Mike DiFranza recently talked to about his company's expansion over the last year and the overall outlook for the future of the digital place-based media industry.

The conversation offered a look inside Captivate, but it also provided insights into avenues of success across the digital out-of-home sector.

Captivate now has roughly 10,000 screens in more than 1,000 high-rise office buildings, but DiFranza said the number of buildings and screens in the network matter less than the audience

"It really comes down to what audience we deliver on behalf of the advertising community," he said.

Captivate is approaching 4 million unique viewers on a monthly basis, and delivering almost 9 million weekly ad impressions, which is larger, DiFranza claims, than the subscriber bases of two of the country's largest newspapers, combined.

"I think that's what's exciting, and that reach that the industry and that individual networks are achieving is what has clients excited about the space – and it's only going to get better," he said.

Captivate this past year also took a look at its creative format and on-air look, DiFranza said. The old look had been successful, but they found that their screen aspect ratio was about to be outdated and didn't necessarily mesh well with other media formats, he said.

"One of the things that we learned as we talked to the agency community is that they really want to be able to leverage the creative assets that they had in place already," he said. "They did not want to have to redesign things specifically for digital place-based networks and/or Captivate."

That forced the company to "re-look" at how its screens are designed. Its network creative format had a horizontal aspect ratio, but when it looked at where the marketplace was going, where the agency community was going, and where the agencies were leveraging their creative assets, it decided that the 4-by-3 aspect ratio was "where things were," but a 16-by-9 ratio "is where everything is going." So Captivate redesigned its entire on-air look to incorporate the 16-by-9 creative format, he said.

Captivate also has started recruiting from among its audience base of office workers to serve as a kind of research panel to test out new creative concepts and product designs. When Captivate debuted its new look, the company asked the viewers which they preferred, and 71 percent of the people surveyed said they preferred the 16 by 9 unit, which also resulted in a 40 percent increase in ad notice.

But finding out about its own network is only the start, as Captivate then leveraged its online panel to create the "Captivate Network Office Pulse," a resource for agencies looking for data on working professionals.

"It's based on the concept of the 'work spouse,'" DiFranza said. "Research tells us that people who work together rely on each other for brand recommendations more than they do on their own spouse."

The network then becomes a resource for others in the marketplace, particularly among the agency community, and across channels.

"You're going to see more and more information published around what white collar workers are thinking about all the time, whether it's how they feel about retirement or where they want to go on vacation," DiFranza said.

In addition to those moves, Captivate last year also started moving its campaigns beyond the screen and beyond the elevator, executing "experiential" events for brands like Snapple and Hyundai.

"At the end of the day, while advertisers like impressions they're really looking for engagement," DiFranza said. "And if you can leverage your exposure to the viewer to drive deeper engagement with their brand that's really valuable."

Captivate also has worked to develop ad agency expertise within the company itself, by hiring from the agency community to create a "mini-agency" within Captivate, in order to better monetize the network and maximize its revenue from an advertising standpoint.

"We believe very strongly that if you want to work with somebody to help them solve their problems you need to understand their problems first and foremost," DiFranza said. "We've made a concerted effort to increase the number of agency professionals working at the company to have better empathy and understanding of what's going on in the advertising agency community ... because if I understand what their issues are, then I'm going to have a much better chance at solving those problems for them and therefore of getting my network purchased."

The idea, DiFranza said, is to make sure the company understands what agencies and brands are trying to achieve and then help them do that, by providing them with not just impressions but with ideas.

"There are too many impressions out there; you can buy impressions anywhere, on websites, everywhere," he said. "Impressions are a dime a dozen, but a good idea is really hard to come by."

DiFranza also serves as chairman of the DPAA (the Digital Place-based Advertising Association), and he spoke optimistically about the future of the industry.

On the industry level, he said, the issues the DPAA has been focusing on have, essentially, been issues of scale, how to make the industry scale and how to help the advertising community more effectively budget for the space.

According to the DPAA's member networks, revenue for the first three quarters of last year was up almost 20 percent year-over-year, he said.

"That makes it the second fastest growing form of media behind spot television," he said. "And if you strip out political campaigns and ads for the Olympics, digital place-based media would've been the fastest form of media in the advertising industry as a whole."

The industry is growing, and it's growing at least in part to its adoption of standardized measurement guidelines across networks, DiFranza said. The calculation for determining an ad impression is now the same whether the ad is played in a taxicab, an elevator or in a grocery store, which provides the industry with a "common currency," he said.

"That makes it easier for the agency community to evaluate and rationalize these networks; it also allows them to buy across multiple networks because they know what they're getting now," he said. "What you're seeing is multiple networks prospering because they have this common currency."

Looking forward, a recent commercial for the NFL Network – combined with the fact that many networks are moving toward standard creative units, meaning one creative asset can be moved across multiple networks – offers an exciting glimpse into the future of DOOH.

The NFL Network commercial shows a man watching a game on his television at home, when he yanks the screen off the wall, folds it up into a tablet, then a laptop, then his smartphone, then throws it back up on the wall of his home – video everywhere.

"The real wild card and what has me most excited about the space ... is called video everywhere," he said.

What's going to happen soon, DiFranza said, is that agencies and brands are going to move beyond the idea of having a video asset that runs only on TV:

"It used to be, 'I have a video asset, and it's going to run on TV.' Now it's becoming 'Where are all the different places I can run that asset to get my message to my target audience?'"

Now, where digital place-based media historically was largely relegated to the overall out-of-home section of advertising budgets, it's going to shift dramatically to also include more and more dollars from the broadcast and cable budgets, he said.

With the shift toward 'video everywhere,' DOOH or digital place-based will start to be considered as an extension of the cable and broadcast campaigns, he said:

"That is when this industry is really going to take off, and it's already happening."

Topics: Advertising , Associations / Events , Audience Measurement , Content , DOOH Advertising , Trends / Statistics

Christopher Hall / Christopher is the editor of A longtime freelance writer and reporter, he's bringing a fresh perspective and critical take on the industry.
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