Judging by the investment being made in its infrastructure, the outdoor industry is putting a lot of stock in the opportunities offered by digital innovation. The fact that a global media company such as CBS Outdoor owner Viacom is spending £35m on the UK's digital out-of-home sector shows that the major players are taking it very seriously indeed.
Digital accounts for just 3% of the £933m out-of-home market in the UK, but this proportion is expected to grow to almost 5% this year. In essence, digital panels take the outdoor offering forward on four fronts. First, the medium makes out-of-home more targeted and immediate. Second, it allows agencies to add complex moving images to their executions. Third, it encourages consumer interaction, and last, it allows advertising messages to be juxtaposed with editorial content.
Media owner Titan operates a network of big digital panels, called Transvision, at 17 mainline train stations. In use since 2001, the panels run loops of 20-second ads alongside news and sports provided by Sky. 'The panels give people something interesting to watch while they've nothing better to do,' says Titan head of digital Pete Beeney. 'We deliver a huge audience and the ability to post targeted ads. By broadcasting Sky news and sports we give the audience another reason to engage.'
At this level, the digital outdoor proposition does not depend solely on being visually attractive, but on being relevant too. 'The panels are linked to a web-based server, so we can refresh copy,' adds Beeney. 'For example, easyJet has run ads that update prices and give reports on snowfall in key Alpine ski resorts. And for Nivea, we ran a campaign for suncream that was triggered only when the temperature reached a certain level.'
In recent months, interactivity has been added to the offering. Transvision ran a campaign for the launch of the BMW X3 that allowed commuters to 'test-drive' the car on station concourses using a simulator. The impact of the installation was reinforced with the use of digital panels.
Transvision has been a pace-setter in digital outdoor for some time, but the news that CBS Outdoor is poised to step up its investment has created a fresh buzz around the medium. The company has already introduced digital escalator panels (DEPs) at prime locations such as London's Tottenham Court Road Tube station. Over the next two years, it will roll out more DEPs, digital cross-track panels and digital six-sheets at high-traffic sites across the Underground.
'(When the programme is complete), we will be able to reach 80% of the 3m people who use the Tube in every two-week period,' says CBS Outdoor sales director Nicky Cheshire. The highlight will be cross-track panels that can run HD video, for which media owners will be an obvious sales target. Movie companies, for example, will be able to show trailers, while TV channels could promote upcoming shows. The company has also installed digital LED screens on 25 London buses, linking them to a GPS tracking system so that the ads are location-based.
Similarly, JCDecaux is in the midst of a £10m-£15m digital upgrade programme at UK airports, starting at Heathrow's Terminal 5; 2007 will be a 'watershed year' for digital outdoor, according to the firm's sales director, David McEvoy.
Clear Channel, the UK's other major outdoor contractor, also plans digital roll-outs. 'We have nine digital panels on London road routes and will introduce more,' says UK marketing director Pip Hainsworth. 'It's part of an investment that has put 100 digital panels into 25 countries so far.'
As a roadside contractor, the emphasis for upgrading Clear Channel's panels is not moving images, which could distract drivers. Instead, the focus is on combining striking creativity with TV airtime-style flexibility. 'Copy can be tweaked if it's not working or can be designed to be timely,' says Hainsworth. 'For a client such as Camelot, it's possible to book an end-of-week campaign when there is a National Lottery rollover. Alternatively, it can be used for iconic installations such as the curved LED screen used by LG in Piccadilly Circus, which will show off the brand to an audience of about 1.1m people a week.'
Despite these advances, mainstream clients and agencies have tempered their excitement for digital outdoor with a degree of caution. The reasons are varied. First, digital out-of-home is not yet truly national. Although there has been a rapid roll-out of TV screens in retail and leisure locations, including Tesco TV, SUBtv's student network, i-vu, Brightspace and MDM.TV (see case study), the bulk of activity by traditional out-of-home contractors is London-centric.
Second, there have been problems with the technology. The roll-out of CBS Outdoor's DEPs was delayed at the start of the year following power issues at Paddington station. In addition, the quality of Clear Channel's outdoor screens has been criticised by some media specialists.
There are also questions over how to equate digital panel exposure to that of static outdoor, according to Bob Strawbridge, national sales manager at outdoor specialist Ten Nine. 'Do the benefits of having a moving image on a shared site outweigh the benefits of ownership of a static site?' he asks.
Undoubtedly it will take time for media owners and clients to work out how to make best use of a shared digital loop, and how to price it; indeed, market-leading out-of-home buyer Posterscope has already called for clarity on this point. But media owners stress that digital is not designed to replace static and is unlikely ever to represent more than 10% of the industry's inventory. 'We recognise the benefits of static posters, particularly for clients who want to put across a lot of information,' says CBS Outdoor's Cheshire.
Despite the setbacks, there have been advertisers willing to experiment with the technology. Sega, for example, has used CBS Outdoor's DEPs to promote its PlayStation 3 game Virtua Tennis 3, with the use of animated tennis players. Last month, Puma used the panels for a series of 10-second executions - the brand's first trial of digital outdoor.
'There is still a perception that digital outdoor is a premium product,' admits Matt Andrews, joint managing director at Vizeum. 'It often takes a while for new media to build momentum because of issues such as evaluation. They are often kick-started by a few brave agencies and advertisers whose reputation depends on being seen as forward-thinking.'
This point is picked up on by Smarter Communications managing partner Graham Hawkey-Smith, whose company ran a campaign for lastminute.com on LED bus-sides last winter. 'For some brands, now is the perfect time to be in this medium because it still stops people in the street,' he says. 'It was right for lastminute.com as it is outspent by bigger rivals, but must maintain a reputation for innovation.'
The crux of the issue will become more apparent when the novelty factor wears off. Then, agencies will really have to begin rising to the creative challenge. 'There haven't been many campaigns developed specifically with digital out-of-home in mind,' says Neil Morris, managing director of specialist outdoor agency Grand Visual. 'To date, it's mostly simple copy changes or reworked TV creative, but this fails to take account of the fact that the outdoor audience hasn't changed. You have to keep to the poster ethic - delivering a compelling story in a short space of time without sound.'
Grand Visual's projects have included a DEP campaign for the launch of movie Rocky Balboa, featuring footage of the film's star, Sylvester Stallone, running up the steps. As people travelled up the escalator, 'Rocky' ran with them, creating an effective link between the film and the location of the panels.
The agency also created a campaign for The Independent, for which it ran the front page of the following day's paper on digital panels after 11pm. 'Digital doesn't have to break the bank,' adds Morris. 'There is perhaps an issue with repurposing creative work for different formats, but I think the real key to this sector is the creative mindset.'
There is still plenty for agencies and clients to think about while digital is in its nascency. One vital area is the importance of engaging content. Clear Channel's Hainsworth believes a key benefit of digital is its ability to place advertising alongside community messages. 'Anything from travel updates to breaking local news can be posted,' she says. 'We think this kind of public-information content changes the way people engage with outdoor sites.'
While much of the current focus is on digital panels, it is important to note that there are also implications for static panels, too, says Chris O'Donnell, new business director at outdoor buying agency Kinetic. 'Outdoor has always been a passive medium, but the advent of bluetooth and wi-fi means people can interact with poster panels via their mobiles.'
According to O'Donnell, the mobile/outdoor link up will transform the medium, not just the few sites where it makes economic sense to upgrade to fully digital panels. It could mean downloading a music clip while waiting for a bus, or sending somebody an incentive to go into a shop as they pass it.
At the forefront of such developments is Hypertag, which specialises in helping marketers deliver rich content to mobiles based on their proximity to a location. 'We've done campaigns linked to poster sites, installations at music events and even field marketing teams,' says Hypertag director Rachel Harker. 'The key point about this technology is that it allows you to link the benefits of a traditional online campaign to outdoor. That brings rewards, immediacy and a degree of measurability.'
Music giveaways are a popular mechanic. Harker cites the work Hypertag carried out for O2 around its sponsorship of the Party in the Park summer concerts in 2006. O2 users at the events could visit a branded destination where they were able to download ringtones and win prizes such as backstage passes.
Harker is convinced that such interactivity is poised to take off. 'The major players are rolling out this technology nationwide now, which will bring the price down,' she says. 'I see potential for companies to use posters almost like retail locations, with people billed for a purchase via their mobile phone.'
However, Vizeum's Andrews warns that digital outdoor will not be fully exploited as long as the industry continues to think in media silos. 'The real potential is to join up all digital media in a way that delivers personalised messages and social experiences.' He adds that it will be down to adventurous brands to lead the way.
The potential of such work to link outdoor with the web was demonstrated recently by a Mini campaign that ran in the US. Created by Butler, Shine, Stern and Partners, the work invited Mini drivers to register online. They were then sent an interactive keyfob embedded with their details. Whenever drivers passed an interactive Mini billboard, it was activated by the keyfob and spelled out a personalised message in lights, such as 'Hi Neil, cool convertible'. 'It's a simple example,' says Andrews. 'But it's one which hints at the way digital can be used to reach people across their entire sphere of activity.'
CASE STUDY - YELL.COM
Advertising agency AKQA used digital outdoor as a prominent part of its 'Local knowledge' campaign for online directory Yell.com, with media buying handled by PHD.
Alongside internet, cinema and sponsorship activity, AKQA introduced three main digital out-of-home elements to the drive.
First, it created LED digital ads on 25 London bus-sides, operated by CBS Outdoor, which were fitted with GPS technology. This meant the creative changed to reflect the location of the bus at any time. For example, when in the prime shopping zone of Oxford Street, the LED panels read 'department stores'.
Second, interactive screens were set up in 20 bus-shelter sites operated by JCDecaux in Birmingham, London, Glasgow and Manchester. The installations allowed people to search a map for local services such as cafes during the day or nightclubs in the evening.
Third, ads depicting people using Yell.com ran on Titan's Transvision digital screens at train stations including King's Cross and Manchester Piccadilly.
While digital outdoor's individual contribution to the overall integrated campaign cannot be broken down, by the time the activity had been running for four weeks, it had generated 1m searches via Yell.com. In addition, about 200 people a day were interacting with the bus-shelter ads, according to AKQA.
'Using digital outdoor created relevancy and understanding of the Yell.com experience,' says Frank Pedersen, group account director at AKQA.
- Digital outdoor generated £29.7m in revenue in 2006, up 15.8% year on year, and representing a 3.2% share of the total outdoor market.
- Revenues are expected to rise 59.8% this year to £47.5m, a 4.9% share of all outdoor. Spend for the outdoor sector as a whole is predicted to increase by 4.5%.
- Digital outdoor is forecast to be worth £100m by 2010, and to account for a 10% share of the total outdoor sector by 2012.
- After 2012, the pace of growth is expected to fall off slightly. By 2016, digital outdoor is set to generate £188m in revenues, accounting for 11.8% of all outdoor.
Source: Outdoor Advertising Association
CASE STUDY - MDM.TV
Digital outdoor opportunities are not confined to the medium's traditional spaces; they are also springing up across retail and leisure locations. MDM.TV, for example, operates a network of 1200 screens across 14 football grounds in the UK.
Founded in 2002, the company offers a way to target football fans before, during and after matches. Grounds at which the network has been installed include Manchester United's Old Trafford and Arsenal's Emirates Stadium.
Screens carry live football action, news, statistics and highlights. Ad spots are available in breaks during the programming, and in banner slots around content.Advertisers include Phones4U, Electronic Arts and Guinness, while the network has also been used for a Comic Relief campaign, which took advantage of £100,000-worth of donated airtime.
The content shown on the MDM.TV network is tailored for maximum relevance to the ground at which it appears and the greatest appeal to the club's fans. Fans of teams in the relegation zone, for example, will be shown the scores of matches that affect their position in the league. There is also an interactive element; viewers are able to send in text messages and pictures as well as enter competitions.
The network was recently extended beyond football grounds through a tie-up with entertainment venue the Manchester Evening News (MEN) Arena. Digital screens there target music fans with information, ads and competitions.