The great outdoors

Innovation, ideas and technology driven solutions are giving out of home media an edge as the main media shake out begins. With continued growth where other media are scratching their heads, the future looks good. Matt Eaton reports.

It's a medium that over the past few years has continued to find extraordinary growth. Innovations in technology and improvements in the creative use of the medium have consistently proven that the out-of-home (OOH) industry remains a powerful and engaging platform for marketers and an integral part of consumers' lives.

Weighing in at just 8% of the total advertising pie, OOH may not be the biggest player in town, but it is certainly one of the most enduring.

Every time we step outside, it's an all out battle for consumers' eyeballs. Why not download the latest movie trailer from your local bus shelter with bluetooth technology, watch TV in the MTR station, marvel at giant electronic billboards when you're stuck in traffic, pick up the latest business news in the elevator or find a tip on grooming in-washrooms. These are just some elements in this giant industry that now takes in airports, street furniture, outdoor sampling, bus and taxi ads and not to mention the traditional poster and billboard formats...Did someone say clutter?

But above all other media, why should marketers consider the OOH sector and what are the benefits outdoor media offers?

Simon Siu, deputy general manager of POAD Group, says OOH's major competitive advantages lies in its round the clock brand exposure,  simple and clear creative and its ability to easily attract attention from target audience.

"Outdoor media does offer a number of unique benefits," he says.

"First of all, being outdoor, the reach of the media is broad and thus huge. And the size of some formats themselves like billboards and rooftop signs already create impact," he adds.

"Since it is in the public domain, outdoor advertising assuredly reaches its audience. People can't switch it off or throw it out, it can be targeted to reach primary prospect by location or be used as a directional signage to specific shop location."

It should come as no surprise then that in the past 12 months OOH continues to perform strongly.

Data from Admango also show that year-on-year, OOH media is recording some of the strongest increases in ad spend. Admango's data for 2007 show the OOH category, which includes bus shelters and outdoor saw a whoping 70.58% increase, for the month of August. Admango says that the rise in ad spend for OOH media can partly be attributed to newcomer Newsline Express available on the KCR trains.

Nielsen Media Research data showed a 20% jump in OOH advertising spend in the third quarter of 2007 and in the full year, the MTR Corporation alone recorded an 11% jump in advertising revenue to $593 million. 

"Looking at the growth in outdoor advertising spend in 2007 versus 2006, we see quite a big jump, signifying that this medium is increasing in importance," Seraphina Wee, manager of communications at The Nielsen Company, says.

"With so much money being invested here, it is important for advertisers to know how effective an advertising tool it is, so that outdoor advertising can be placed on a level playing field with other measured media."

But this is not to say the OOH sector is not without its challenges. OOH like all media is at a cross roads of how to measure clients marketing spend on the outdoor sector and prove an accurate return-on-marketing investment.

Media buyers, marketers and vendors themselves argue measurement is key, but just what to measure and how to do it is proving to be a big headache.

A particular challenge for the outdoor medium is that the sector is itself a very fragmented media, consisting of different environments and different formats across multiple demographics. Another major factor prohibiting the rapid uptake of thorough measurement activity is cost.

But while some innovations are underway from the big global research groups and the outdoor vendors, a consistent, industry-wide approach still seems some time away.

Siu argues that today there is an increasing demand from clients on viewership figures to measure the ROI, but says the tools are not there to support such research.

"There is no syndicated research available to measure the return on investment for OOH media. OOH media companies are conducting their own research," he says.

Anne Woodhams, who heads the Communications Research Centre at TNS, says that today's OOH advertisers must look beyond basic reach and frequency metrics and says clients must consider different indicators of influence like brand preference and sales.

She argues the "one size fits all" model of measurement no longer applies.

"What is required is a customised measurement program that is tailored towards the specific objectives and requirements of each advertiser and campaign," Woodhams says.

Digital dreaming

The strength of outdoor has always been how, via a number of formats, it can be used, either alone or as part of a multichannel approach, to meet a wide range of communication challenges.

Historically this may not have always been the case, but changing technological and regulatory conditions are opening advertisers' eyes to new opportunities.

Bluetooth and SMS technology, interactive billboards, digital in-store TV networks is helping to push OOH into newer and more lucrative areas. This is particularly true for advertisers targeting younger, more media savvy consumers.

Relative newcomers to the digital OOH market in Asia, Enqii is hedging its bets on the rapidly expanding in-store sector, currently dominated by the likes of Focus Media.

In-store or point-of-purchase is quickly gaining credibility as a powerful way to generate healthy sales. In the first quarter of this year alone, Focus Media's digital OOH revenue was up 113% year-on-year to US$108.7 million.

Peter Kyrkos, Asia Pacific sales director at Enqii, says agencies and media buyers are today very conscious of the OOH sector with clients' investments in the medium growing each year, but still those investments are largely limited to the traditional billboard and poster formats, he says.

"With technology like ours [retailers] can change the look and the feel of the store depending on what demographic comes in, and that's really important if you want to start targeting these different demographics," he says.

"We can change browsers into shoppers because we can deliver targeted messages to people while they're in a particular store that relates to that store.

The days of watching an ad on a television are dwindling, maybe not in all parts of Asia, but certainly the rest of the world and Asia very soon."

But Kyrkos admits that while the technology is now in place, getting media buying onboard is another part of the challenge.

"In this space, what we have found is that once media buyers try it, they rarely leave, it's really just a matter of getting them there," he adds.

"They're going to have to get it, they're going to have to understand this space because I don't think they're going to have an option, it's going to grow and I think they will have to understand how to start putting ads into this space whether they like it or not."

A number of other players in Hong Kong are also moving strong on the in-store space, Earlier this year, Focus Media's Hong Kong subsidiary landed the contract to build an in-store advertising network for health and beauty retailer Mannings. The contract will see Focus install 42-inch screen in 100 Manning stores across the territory.

Digital Outdoor Television Limited (DOTV), another pioneer of the digital outdoor in Hong Kong are currently installing TV's in many of the 7-Eleven's and Circle K's across Hong Kong and are already in many of these and specific restaurant chains such as Fat Angelos.

The group earlier this year joined Television Broadcasts (TVB) to launch the "Outdoor HD Corner" network with the latest broadband technology. DOTVs will be installed in restaurants, shopping malls and computer centers, where viewers can watch selected TVB dramas and program highlights.

Balancing OOH creative

Technology is not the only area of the OOH industry where innovation is occurring. The ways in which creative agencies approach the medium is also undergoing significant change.

Smart campaigns from big automotive brands, FMCG companies and mobile operators is seeing a resurgence in how the medium can be used. But according to some, creative use of OOH still lags behind international markets.

"Creativity is always the key but in the case of OOH, technology and feasibility are also key," says Christine Pong, founder of independent creative consultancy Two Hundred.

"Sometimes the technique governs the idea but as in TVC execution, the idea is just as important, so is the environment of the OOH, the state of mind or behavior mode of the audience should also be taken into consideration."

Pong says time and again, clients are reluctant to  test new ideas and break category norms.

"I have seen over and over again, brilliant creative ideas being shot down due to a ‘this has never been done before' mentality.

"Another reason could be the lack of team spirit between creative agency  and media agency, since they work on the same client on an independent basis.

"There is conflict of interest, ownership and revenue so when the minds get to work hand-in-hand, the result suffers, this applies to the creative process and the selling."

But as marketers seek out new ways to engage consumers, the OOH industry should be well placed to respond in terms of innovations, unique solutions and accountability, the healthy growth of the industry should continue to be achievable.

Siu says technology has changed the OOH industry dramatically, but has also helped broaden the creativity of the medium.

"The trend for OOH will be more integrated and interactive. POAD, as a provider of different OOH media formats, is offering clients integrated and interactive OOH media solution," Siu says.

"For example, clients can book our TramsmarT (tram shelters) together with taxis to cover specific locations, or they can dominate a specific location by using our smartBillboards and smarTV network. We are also introducing interactive options on smarTV, taxis for clients to launch more impactful advertising campaigns. "