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Venture capital, investment dollars eyeing DOOH media

Digital out-of-home is the fastest growing media segment since the Internet, and investors are taking notice.

September 28, 2008 by Digital Signage Today

Venture capital and corporate investors alike are betting on digital out-of-home, the fastest growing segment since the Internet.

The space is hot, says Steve Faso, a 14-year veteran at Outdoor Services (OSI), a planning and buying agency for OOH.

"Our various entertainment, automotive, pharmaceutical and even military clientele, including those who have historically invested in traditional OOH as well as in broadcast, have become most interested in digital OOH," he said. OSI is part of the Interpublic Group of companies' media entity, and places nearly $200 million annually. As the VP and director of new media, Faso is currently launching the agency's latest initiative, DigiServices.

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While brand marketers appear to be aware of the emerging channel thanks in part to increasing industry and popular press coverage, their receptivity and interest has not yet translated to demand.

"This is a whole new area for clients," says Donna Speciale, president of investment and activation at MediaVest USA. "There's a huge educational process that has to go about."

The learning process has been applicable on the agency side as well. Until two years ago, the MediaVest OOH team had put all their efforts on billboards. The space is further complicated by crossover with television since a network such as NBC operates in both spaces, says Speciale. However, she believes this will all change in the long-term.

"It will eventually end up being a video choice. We need to stop thinking it is TV, OOH or digital."

Alan Schulman

Donna Speciale

Steve Faso

At a recent industry event, the sentiment echoed was that some of the place-based video ad networks may not survive the waiting period before the advertising community fully embraces and moves dollars to digital OOH.

A major roadblock to faster media uptake has been the issue of standardization, particularly around measurement, effectiveness and pricing. To tackle the issue, the Out-of-Home Video Advertising Bureau (OVAB) has been working with its members, the media community and research firms to establish standards and best practices. Its audience metrics guideline will be released publicly in October.

The report is expected to lend additional credibility to the emerging space and make it a bigger viable option for the ad community since clients want to know what the tradeoff is when they invest in digital OOH instead of television, says Speciale who is on the OVAB board.

"No one is saying that all CPMs are equal, but if I have to pay a different number, what's the value for it?"

For now, MediaVest's planning and strategy team responsible for brands including Kraft, Mars, Procter & Gamble, and Coca-Cola, among others, is looking at the space on a case-by-case, brand specific basis.

While "budget allocation for digital OOH is not there yet," says Speciale, her team is excited about the OOH space and the opportunity it allows to get the messaging out to the desired consumers at every part of their life.

Given the potential for the space, Schulman, who has been actively involved in developing advertising for new and emerging platforms, thinks adoption and acceptance could be accelerated through creativity and innovation.

"We need to look to the more non-traditional agencies who are pushing the limits of these platforms by integrating SMS with digital projection and even fixed digital signage," he says.

As Madison Avenue continues to be more educated on digital OOH and as the industry continues to standardize, the tipping point of advertising dollars and the return on investment will be realized.

For more insights on where the media community stands on digital OOH, join Donna Speciale and speakers from OSI and Avenue A Razorfish at the Digital OOH Media Investor Conference on October 7th, 2008 in NYC. Confirmed companies attending include Carmel Ventures, Intel Capital, Credit Suisse, Clear Channel and Alloy Media.

Christie Liu is a conference producer at Strategy Institute, host of the Digital Out-of-Home Media Investor Conference.