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Anytime, Anywhere

Big 3 networks serve up TV where the viewers are

Feb 4, 2008

-Shahnaz Mahmud


NEW YORK Imagine getting back into your golf cart after another lousy hole when a video image fills the ProLink GPS screen mounted on your cart. Serendipitously, it's an ad for Glen Levitt scotch, and just the thought of unwinding with a drink makes you feel just a little better.

Not every golfer may be thrilled to find advertising on the fairway. But ABC, which is partnering with ProLink, is betting captive eyeballs won't be turned off by a pitch linked to a system that measures distances on the course and orders food from the clubhouse.

Golf carts are just one of many 20 developing out-of-home-digital platforms, ranging from gas station pumps to supermarkets, cropping up in the alternative advertising and marketing arena. And ABC is not the only network capitalizing on the trend: NBC and CBS are also going full blast, with several initiatives unveiled in January alone. These include the official launch of NBC Everywhere, a network division dedicated to the out-of-home digital space, and CBS Outernet's partnership agreement with Ripple, which places screens in retail chains including Borders, Coffee, Bean & Tea Leaf, Jack in the Box and Tully's.

"This is a natural place for them to go, given what's going on with the network marketplace and the erosion of viewership," said Norm Chait, vp and director of out-of-home services at Publicis Groupe's MediaVest.

Out-of-home video networks have become staples in places such as airplanes and cruise ships, where long-form network programming is offered as an entertainment option. But the arena is now expanding rapidly—mostly with smaller, locally produced ad-sponsored content—due to more affordable technology.

Out-of-home digital media is one of the fastest-growing segments of alternative advertising and marketing. According to the PQ Media Alternative Out-of-Home Media Forecast 2007-11, video-advertising networks are the largest sub-segment, accounting for 60 percent of total spending of $1.7 billion in 2006. Additionally, spending on video-advertising networks grew 28 percent in 2006 to $1 billion, with high double-digit growth in all four markets: in-theater, in-office, in-store and in-transit. The research consultancy expects to report another 28 percent growth in 2007.

"This is probably the hottest media today," said Patrick Quinn, president and CEO of PQ Media. "It's second in growth as far as advertising goes, second only to the online space."

The three networks have taken somewhat similar programming approaches with these newer platforms. The ad-sponsored content consists mostly of locally produced short segments (e.g., news, tips and PSA-like spots) presented by network-affiliated talent.

NBC, which refers to its customized programming as "promo-tainment," uses stars such as actress/comedienne Tina Fey and late-night talk show host Conan O'Brien to introduce segments. ABC leans toward prime-time talent, while CBS tends to use recognizable faces from its news programs.

Advertisers include Hershey's, Masterfoods, Pepsi, Unilever, Glen Levitt scotch (ABC); Denny's, Sharp (NBC); and Johnson & Johnson, Verizon, Colgate and Coca-Cola (CBS).

Obviously, such "place-based" networks are not entirely new to the networks. ABC was the first to try the medium in the mid-'90s, when it worked solely as a middleman selling ads. And over the past few years ABC, CBS and NBC have tried different platforms as well as plan for those not yet operational.

NBC's new division, NBC Everywhere, has 10 platforms: taxis; Times Square; schools (through Channel One); gyms; gas stations; supermarkets; arenas and stadiums; campuses (through a university network); maternity wards in hospitals; and train station platforms. All have launched except for the one in the train stations; that program will begin in April, with screens being planned for the inside of cars in 2009. (All the NBC platforms have been given names, e.g., NBC in Taxi and NBC at the Game.)

"We've been looking at this space for a long time. [It's a product of] reacting to consumers wants and needs," sad Mark French, svp and general manager of NBC Everywhere.

French foresees adding more platforms, some of which will incorporate interactive components, like text messaging for prizes. He noted that most of NBC's video-network partners have interactivity capabilities, but declined to give specifics.

CBS Outernet—so named in September 2007, when CBS acquired SignStorey, a video network in 1,400 supermarkets—has worked with digital platforms in hair salons and doctors' offices for some time now. Recent additions include Ripple and the Automotive Broadcasting Network, which gives the media company a presence in over 20,000 car dealerships in the U.S. Just prior to these deals, CBS partnered with Gas Station TV, which has more than 5,000 pump screens in over 300 cities in the U.S.

Virginia Cargill, CEO of CBS Outernet, said there are plans to expand its grocery store channel. "You can reach people on a targeted one-to-one basis in the store, and really have an impact on the decisions they make and the products they buy," she said. The goal is to reach 2,000 grocery stores this year through additional agreements, with the eventual aim to have a presence in upwards of 5,000 stores.

"We're looking for places where you have enough people, the information is relevant and the advertisers want to be there," Cargill added.

ABC launched its digital out-of-home presence four-and-a-half-years ago with the Meijer hypermarket chain, which comprises 176 stores in Michigan, Indiana, Ohio, Illinois and Kentucky. In early January, ABC made an agreement with Pump Top TV, giving it a presence on roughly 2,500 screens in Los Angeles- and San Diego-based gas stations. Screens will be added in cities including San Francisco, Sacramento, Phoenix, Dallas, Houston, New York, Chicago, Philadelphia and Boston over the coming year.

"This is one of the more engaging platforms. You've got a six-foot hose and nowhere to go," said Ed Pearson, svp of ABC new media sales about the gas station deal.

All three networks are selling time on their platforms in integrated packages. These could include components such as on-air, online and mobile, as well as the purchasing of one or more platforms. They can be sold nationally, regionally and locally.

Prices vary greatly, depending on the platform. The issue of captivity is critical. For instance, a network in a movie theater can charge over $20 in cost per thousands because the viewer is in a darkened enclosure for the specific purpose of looking at the screen, said Stephen Diorio, partner at marketing services company Profitable Channel.

Gas pump screens get premium prices as well, as the expectation is consumers would rather watch a local news clip than how much it's costing them to fill up their tanks. "Engagement helps drive CPMs," said ABC's Pearson. "So we charge anywhere from $15-20 cost per thousands."

CBS Outernet, on the other hand, charges around $6 CPMs in its grocery store platform.

Some agency executives said the issue of measurability might be holding some advertisers back.

"I think they're really eager, but are just looking for justification and validation," noted Jack Sullivan, Publicis-owned Starcom USA's evp and out-of-home media director. "Better research is needed to show that this is a good place for their media dollars."

NBC Everywhere's French agreed, saying, "We conduct very customized research. For us, measurability is a reason people are buying versus not buying."

As the major networks start to establish some scale, added MediaVest's Chait, emphasis is being placed on how to demonstrate what is working, and how: "We're making sure we can communicate the benefits from a numbers standpoint."

Once the metrics are there, execs say they expect more types of content to evolve, including original, branded entertainment.

Laura Caraccioli-Davis, evp and director of Starcom Entertainment, said the media agency is in talks with NBC to potentially create such original programming.

CBS' Cargill said these platforms could mirror programming seen on the Web. While there are no current plans to produce them, she envisioned weekly vignettes that tell a larger story.

"A call to action in the advertising is a little bit more critical in this space than in perhaps your massive reach vehicles," said ABC's Pearson. "I think you're going to see that as advertisers learn this space they will go to a brand-integrated situation, [but right now] everyone is focusing on what's most effective."

The future, he added, is bright. "Everybody wants to extend their brand," he said. "And the one pretty cool part about out-of-home television is that all of our lives we have gotten our entertainment and information from television. So, if you see television anywhere, you're attracted to it. It's the way [you live] your life."

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