I tend to run into Jeff Atley after hours at trade shows, after we’ve both had a few pops and are not all that eloquent. Or coherent.
So when the VP and co-founder of Adcentricity rattles off this sort of thing in his writing, I’m amused. “This does not, however, translate directly to an equivalent spending ratio in other media reaching beyond these standard pillars in significant and consistent volume.”
Oh, advertising people and their impenetrable patter …
That’s one of the lines in Adcentricity’s wordy but otherwise excellent DOOH market review for the now-completed second quarter of 2010. There is a fair amount of that biz-speak, but it’s not that tough a read, and worth the effort.
The review, the second one produced by the digital out of home media strategy company (aka aggregator), paints a rather splotchy, darkish picture for this spring, suggesting the big start DOOH had this year kinda sorta fizzled out.
The second quarter of 2010 continued to present a challenge for the media industry to navigate and recover from the global economic conditions. The US market conditions have certainly had an effect on the transactional flow of media spending across the board, which has also been accompanied by major rate cuts and bonuses for traditional media outlets. The Canadian market, while certainly still well below pre-recession spending, has been able to maintain a certain level of consistency for media transactions. “Activity” in general was up in Digital Out of Home (DOOH) but that activity does not always translate into what the market desires – regular sales transactions.
The torrent of activity that started in Q1 seemingly evaporated as network operators and agencies alike waited for brands to make decisions and generally “get back to work.” Unfortunately, this didn’t happen. One noticeable trend was that campaigns scheduled for mid-April became June 1 campaigns – June 1 campaigns became August 1 campaigns – and even campaigns already booked and committed became delayed due to lack of creative and uncertainty around what the brand “really wanted to do.”
Campaigns and activity that were expected to begin in April through the end of May did not materialize until mid-May through to the end of June, pushing budgets and campaigns much further than most in the media business expected. This is not unique to DOOH but has been felt among many forms of media, despite the cheer leading made by many media trade sources.
While this is quite a sobering review after the DOOH activity ADCENTRICITY saw through Q1 – the second quarter was subject to volatile market conditions and displacement of brand initiatives. Although prognostications of both ADCENTRICITY and agency personnel expected the market to resume in earnest through mid Q2, there are significant bright spots and activity occurring that is driving the DOOH market in a very positive direction.
While ADCENTRICITY certainly would have like to have seen actual accrued spending in Q2 up much further than it was, Q2 was ADCENTRICITY’s single largest booking quarter on record, paving the way for a strong Q3 and Q4 before the back half of the year even begins. On the overall activity front, the “big three” continued to dominate evaluation and bookings.
Financial services continued to invest heavily in DOOH. Almost 55 percent of the booking activity was led by this sector, continuing on strong demand from these clients through the first quarter.
As projected from ADCENTRICITY’s Q1 report, both domestic and foreign auto-makers began to spend in non-traditional channels once more, although at a much delayed pace compared to other sectors. After extremely intense scrutiny, the automotive industry is demonstrating movement and while much of their efforts are with more traditional forms of media, their investments in non-traditional, including DOOH, appear to be ramping up and longer term discussions of substantial commitments to the medium are returning.
The telecommunication sector sustained its interest in the DOOH market as a “Top Five” spender but appears to be saving its larger scale efforts and potential investment in DOOH for late Q3 and Q4 campaigns – many of which have not been yet decided or planned due to intense competition amongst carriers and late directional shifts by some telecommunications companies.
The home décor/renovation category made some seasonal investments and the results and subsequent activity seem to indicate that DOOH is being recognized as a potential promotional adjunct to their efforts, able to support their “local circular” efforts and drive traffic to stores or affect in-store behavior.
Government spending has begun to seep into the sector and there is a demand for DOOH in upcoming regional political battles and messaging but network reticence, operational restrictions and sometimes venue owner/network operator political biases are restricting full adoption or utilization of the medium, dampening enthusiasm – and substantial revenue – from entering the ecosystem.
Finally, the pharmaceutical sector is slowly waking up to the realization that, yes, there are tens of thousands of doctor office environments that have DOOH and are specialized and receptive. As such, the pharmaceutical industry is toe-dipping with an eye to further participation should results meet their requirements
Looking ahead is really, really tough, Adcentricity reports. The company describe media demands as schizophrenic, characterized by late or last minute deciusions. So planning several months out is tough, as is doing forecasts.
What is more evident, at least in DOOH, is which venues are getting the action.
Looking into Q3 activity to date, c-store venues continue to not only dominate but grow in interest! The restaurant/bar industry is gaining favor, growing in interest over Q2 by almost double due to heavy education and many, many research studies at huge costs to the networks themselves.
Interest in DOOH from brands with higher end products/services (automotive, financial services and pharmaceutical) has increased interest in airports by almost eight times. New categories to ADCENTRICITY like regional buses targeting Hispanics have also spiked in interest as Hispanic and multi-cultural marketing efforts continue to grow.
There is a LOT of work put into these quarterly reports, and while they can’t help but serve to some degree the needs of Adcentricity (why else would they distribute them?), the material is useful and insightful for anyone playing in this space. Atley, co-founder Rob Gorrie and their tean spend every day chasing money and talking to the media industry, as well as to network operators. They are waaaay closer to the ground on this stuff than most people in the sector, so what they say is very valuable.
They are also smart marketers. When the company first bubbled up some three years ago, they were perceived as well behind SeeSaw in market and mind share. I’d be really surprised if that is still the case.
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for some 14 years. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He’s based near Halifax, Nova Scotia, on Canada’s east coast.