February 20, 2008

The Out-of-Home Video Market has heated up significantly over the last couple of years, and continues to accelerate. Scarcely a week goes by without a slew of announcements regarding new initiatives in the space. Indeed, it's becoming hard to think of places where one has no chance of encountering some sort of video-based media experience.

To quote Mitch Oscar from a February TV Board: "Every day another distribution announcement hits the newsstands: gas stations, airlines, cruise ships, supermarkets, amusement parks, malls, hotels, bars, path trains, taxis, schools, auto dealers coupled with current broadcast channels, digital terrestrial channels, video on demand platforms, streaming video, Web sites, portable media players, home video, wireless devices...."

Apart from the sanctity of your own restroom, just how many places can you think of where you can completely escape the ever-longer arm of the video / TV business?

In addition to this proliferation of place-based media outlets, we've seen an industry body established ( OVAB) and the number of conferences given over to the subject (always a good indication of market buoyancy) continues to increase (including MediaPost's own Digital Out-of-Home Forum in April). Anyone attending the recent AAAAs gathering in Orlando cannot fail to have noticed the large number of out-of-home video propositions represented on the show floor -- almost certainly more than ever before.

All this frenzied activity, encompassing as it does the media heavy hitters like CBS and NBC as well as small, boot-strapped and thrusting start-ups, agencies, research companies and property / transport owners, has all the characteristics of the great westward migration in the 1800s - land grabs and all. We're talking mostly about physical space after all -- of which there will always be a finite amount -- and the quality will vary in terms of audience volume, time spent with the medium, degree of attention secured, size of screen relative to viewing distance, and so on. Now is obviously the time for aspirants in the space to be staking their claims to whatever they see as their particular business-critical distribution points before they are left with the scraps from the table.

This Wild West period is likely to come to an end very soon as the industry strives for maturity and its share of media spend. One huge advantage that the out-of-home video community can exploit , of course, is the fact that the viewer is often at or close to the point of purchase (in-store media). In other cases (planes), the viewer is potentially wholly absorbed in the content for a prolonged period, as with TV in the home.

Another advantage is that measurement of out-of-home media consumption is becoming easier -- which is just as well, since otherwise the significant amount of video consumption that takes place out-of-home could never be monetized. Our own research in the Middletown Media Studies - now two years old - suggested that almost 30% of people consumed video outside the home in an average day, which accounted for 9.4% of total TV viewing. By any measure, that represents significant business potential -- and those numbers can only have grown since that research was published.

Despite all this apparent progress however, there is one major issue that the out-of-home sector will need to successfully address if it is to exploit its potential to the full. Just like every other emerging medium, to move beyond the "experimental budget" stage, systematic and standardized measurement of exposure and -- ideally - effect is needed.

The good news is that the sector is taking steps in this area -- faster than has often been the case for other media. Perhaps fueled by the fact that there are technological options available to aid the process, perhaps by the recognition that in a digital age data is all (or maybe by the simple acknowledgement that the amount of money to be made in this space is growing fast and part of the land grab), a number of parties have made moves in the measurement space. Nielsen and Arbitron have both been undertaking research for out-of-home companies to provide data in support of sales efforts. Nielsen and PRN are pursuing larger initiatives, and there is much more in the pipeline from a variety of sources.

Of course it's too early to say just how consumers will respond to many of these initiatives, as so many of them are new or recently evolved to their current form. This is as yet an under-researched area once you go beyond measures of exposure. Although there is an increasing amount of research coming to the market that looks at message recall and the like ( Mall Networks is one company offering such research in support of its proposition), there is still much to be done to understand the impact of the vast array of out-of-home media.

Over time, for example, we will no doubt come to understand where the various out-of-home video properties sit on a continuum of consumer acceptance - from those that irritate and annoy, through those that are barely noticed, to those that are enjoyed and perceived as being of value. There are a host of issues like this that will be revealed once progress has been made on currency metrics. Likewise, in due course we'll see more research in the space from sources other than those seeking to sell inventory -- which can only be a good thing.

Meanwhile, it's a pretty safe bet that the out-of-home video market is in for a period of high growth and lively activities and all that goes with it - mergers and acquisitions, road-kill, a few announcements about major shifts of ad spend into the sector that will delight some and irk others, and so on. It should be fun -- especially with seemingly everyone gearing up to play.

by Mike Bloxham
Mike Bloxham is director, insight and research, at the Center for Media Design at Ball State University --
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