Adding Mobile to the Mix

The nascent digital out-of-home medium is evolving from a one-way street to a two-way thoroughfare. In the last few months, a number of digital video networks, including Akoo, Danoo and aggregator Adcentricity, have added a mobile platform, joining other early adopters in trying to extend their dialogue with increasingly mobile consumers (click here for an extended list of company’s with digital out-of-home initiatives).

The promise of combining the two fastest-growing media is hard to resist: Catch the consumer when they are most receptive to messaging; engage them with special promotions and offers close to the point of purchase; and continue the dialogue by building a database of loyal and receptive customers.

“Having the opportunity to create an impression is fine. But once the consumer is out of sight of the screen, you can still have a dialogue. That’s what mobile brings to the table,” said Michael Collins, CEO of Joule, the recently rebranded mobile division of Kinetic created in 2007 to execute mobile campaigns for GroupM.

In the next five years, driven by an expected threefold increase in the number of smart phone users, revenue from mobile advertising is expected to skyrocket to between $1.5 billion–$3.1 billion, depending on the forecast one uses.

For the most part, the ad combo represents only a fraction of the media mix. According to Collins, only about 15 percent of brands have experimented with mobile. “As a marketing vehicle, it’s still young,” he added. “A lot of this is being done for the first time.”

That could change now that digital OOH networks have made it easier for advertisers to harness both media by bundling them together. Interest among advertisers is definitely increasing. Since Adcentricity partnered with Impact Mobile in April, the aggregator has seen a surge in the number of advertisers wanting to integrate mobile into their plans.

“Up until now, digital out-of-home has been very transactional,” said Rob Gorrie, CEO for Adcentricity. “This adds engagement and loyalty marketing components. It has taken us out of siloed transactional buying.”

Early indications are that integrated digital out-of-home/mobile campaigns not only work,  but they also tend to produce a higher rate of return. Outcast, which launched its mobile platform in March 2008, said it has delivered more than 30 million SMS coupons for advertisers such as Carl’s Jr., Redbox (a DVD kiosk service) and Universal Pictures. Average redemption rate has exceeded 25 percent, the company said.

Danoo, which is in the process of rolling out its mobile download component to coffeehouses and cafes in New York and Los Angeles, found that the dual platform gets better results than the Internet—about 3 percent compared to 1 percent for online. During two-week trials in March with three advertisers—ABC, The History Channel and Electronic Arts—each advertiser averaged nearly 10,000 downloads. By July, Danoo, which uses a performance-based, per-inquiry pay model, expects to deliver 40,000 downloads over a two-week period.

“It’s inherently measurable at a time when advertisers are being held to greater accountability,” said Doug Scott, vp of marketing at Danoo.

While the digital video networks strive to make dual-platform campaigns easier for advertisers and agencies to embrace, advertisers may prefer to use a mobile approach that works across all media in the campaign.

“The big challenge the digital out-of-home media owners have is that it’s only a small part of the media mix and it may make more sense for brands to have their mobile component independent of a single media owner,” said Joule’s Collins.