Startup IdeaCast Sets Its Sights on Gyms

NEW YORK Former ad agency executive Fred Smith is launching a media company called IdeaCast that will target consumers as they work out at their health clubs.

Smith and his backers have spent $15 million securing programming rights from networks including CNN, CNBC and ESPN, and deploying reception equipment in participating venues.

Charter advertisers include Pepsi, which will advertise its Propel sports drink on the health club network. Other marketers signing on include Orbitz, FTD and Molson. The network will debut Sept. 15 in a group of health clubs with collective daily attendance of about 1 million members.

The company will compete with others in the placed-based arena, such as Zoom Media and in-house health club networks. But Smith said that IdeaCast has made deals with the programmers that give his company the exclusive right to sell new ads—tailored specifically to those viewers working out—that would be inserted in place of the ads that go out in the main program feeds to TV households as well as to competing place-based networks at heath clubs.

Smith said his network would go after dollars targeted to cinema advertising, where some research shows moviegoers dislike having to pay to see a film and endure ads at the same time. Cinema ad sales executives counter that their research indicates that less than 3 percent of moviegoers say they’re bothered enough by such ads not to attend movies.

Beyond that, Smith said, IdeaCast ads would reach a captive audience that for the most part will be huffing and puffing on treadmills. “They are looking for a distraction,” he said. “We are inserting commercial messages into the content that has already been widely accepted by the health club members,” he said, referring to the cable networks he’s signed for the service.

Smith was a co-founder and CEO of Chicago-based The Leap Group ad agency. Before that, he served in various posts with DDB Needham, Leo Burnett and Young & Rubicam.