Sometime during the past decade, the media world became polarized into “old” and “new.” While out-of-home advertising may be a charter member of the former category, it is adeptly straddling the line between the two through product innovation and new technologies.
“We’re in a somewhat enviable situation in that we can still deliver mass reach, and rather than being negatively impacted by technology, we’re able to utilize it to our advantage,” says Michele Erskine, director of marketing for CBS Outdoor Canada in Toronto. “It’s a double positive.”
PricewaterhouseCoopers’ “Global Entertainment and Media Outlook: 2007-2011” pegs Canadian out-of-home advertising to increase at a compound annual growth rate of 8.7% over the next five years-the highest growth rate in the world. PwC projects Canadian out-of-home revenues to reach $529 million by 2011, driven by new technologies in digital billboards, as well as 3-D displays and in-store video networks.
“Canada is a fairly small player in the world in most of the entertainment and media segments,” says Tracey Jennings, the Canadian leader of PwC’s entertainment and media practice, “but there are a few segments where its growth percentages really lead the world, and out-of-home is one of them.”
According to Nielsen Media Research (NMR), Canadian out-of-home attracted $137.5 million in ad spending from January to April, up 13% over the same period last year. Its revenues have increased each year since 2002, adds Jennings.
David Jacobson, PwC’s director of emerging technologies, says the sector has been caught up in the “sea change” in human behaviour, whereby consumers are increasingly connected anytime, anywhere. (He calls it “ubiquitous participation” or UP!, the exclamation point reinforcing what he says is “the excitement, the novelty, the newness.”)
Rosanne Caron, president of the Out-of-home Marketing Association of Canada (OMAC), says new technologies will play a “huge role” in the sector’s growth during the next several years. Applications such as radio frequency identification (RFID) and Bluetooth are already being used on a limited basis (Mirvish Productions used Bluetooth to promote the stage musical of Lord of the Rings last year, sending LOTR ringtones to Bluetooth-enabled cellphones), while text messaging is increasingly being incorporated in out-of-home campaigns.
CBS Outdoor recently concluded a campaign for Procter & Gamble’s Tag Body Spray in which transit shelter advertising, interior transit and bus wraps urged riders to text the word “all nighter” to win a Tag prize pack. A similar initiative by ZenithOptimedia for Nestlé’s Blue Freezer invites people to text in a new headline for the food company’s line of frozen treats.
“More and more people are comfortable with texting; it’s reaching critical mass,” says Erskine. “When a football mom like me is doing it, it’s hit the mainstream.” (According to the Canadian Wireless Telecommunications Association, more than 4.3 billion person-to-person text messages were sent in 2006, nearly triple the 1.5 billion messages sent in 2005.)
The future will also be increasingly interactive, says PwC’s Jacobson. He cites an initiative from Microsoft called Surface, a 30-inch touch-screen tabletop that will let consumers interact with brands or place everything from directions to photos and music files into a cellphone placed on the tabletop with a simple hand gesture (a demonstration can be seen at microsoft.com/surface). Microsoft has established partnerships with the likes of Harrah’s Entertainment and Sheraton Hotels & Resorts, and will roll out the first Surface units this winter.
“Out-of-home as we’ve been conditioned to know it is evolving tremendously,” says Jacobson.
OMAC’s Caron stresses, however, that the humble billboard will remain a key component of the out-of-home industry in the short term. “As much as [digital] is the wave of the future, the reality is that even in the U.S. there are 450,000 outdoor billboards, 400 or 500 of which have been converted to digital. I don’t think you’re going to see every static billboard turn to digital-at least not in the near future. It’s a huge expense, and is the advertiser going to be willing to pay the cost?”
According to the Canadian Outdoor Measurement Bureau (COMB), there were 92,657 out-of-home faces across the country in 2006, a 27% increase over 2005. Traditional out-of-home faces increased 2%, while non-traditional went up 63% (although that number is skewed somewhat by previously unreported companies like NewAd and Zoom Media becoming COMB members).
The building boom in cities like Toronto is also causing traditional inventory to be lost as existing structures are torn down to make way for condos. “It just means that the locations we still have, and we have a lot of them, become that much more attractive,” says Erskine. And will this impact rates? “If we lose [a face] we feel it,” says Erskine, “but I wouldn’t say it’s been passed along yet.”
At CBS-the nation’s largest out-of-home company with a 46.2% share of the traditional out-of-home market in 2006, according to COMB-inventory is “very, very tight” across the country, says Erskine. Most major markets are booked through October, and there’s increased demand for products that have not typically sold out in the past, such as bus king boards.
“We’re benefiting from client and agency concern about fragmentation,” says Erskine. “People are coming into the medium that have traditionally been television only or TV dominant advertisers.” According to NMR, telco was the leading out-of-home category in 2006, with BCE, Rogers and Telus comprising the top three out-of-home advertisers (see charts, page 27).
“The economy’s strong, and the industry overall is good,” says OMAC’s Caron. “Out-of-home, both indoor and outdoor, is strong all across Canada.”
