"Ads per broadcasting hour" as a Digital OOH measure?

March 4, 2011 by Dave Haynes

VisionChina Media is one of China’s largest Digital OOH players, with an ad network that covers 23 cities and includes 137,395 digital displays on buses, subway trains and platforms, as well as on other platforms.

The company has reported its 2010 financials, which reflect what looks like a pretty ugly turn down in fortunes (more on that later).

What’s interesting to me is how the company reports advertising activity. Vision reports in terms of broadcasting hours, something I don’t think I have seen before with a Digital OOH network.

Network capacity, as measured by total broadcasting hours in the Company’s network, reached 195,366 hours in the full-year 2010, compared to 138,164 hours in the full-year 2009.

The Company sold an average of 6.75 advertising minutes per broadcasting hour in the full-year 2010, compared to an average of 6.47 advertising minutes per broadcasting hour in the full-year 2009.

Average advertising service revenue per broadcasting hour in the full-year 2010 was $677, compared to $825 in the full-year 2009.

I’ve seen a lot of media kits and reports for Digital OOH networks, but I don’t think I have seen network activity presented in that fashion. It’s an interesting rule of thumb, but I am more familiar with advertising minutes per broadcasting hour having to do with a cap on the maximum number of ads regulators allow in one hour of TV programming. Up here in Canada, that seems to be about 54 minutes an hour.

As for VisionChina’s fortunes, 2010 was not pretty. Total revenues for the year were actually up, but the firm took a big hit for a series of recent investments.

Operating loss in the full-year 2010 was $166.2 million, compared to the operating profit of $27.1 million in the full-year 2009. In 2010, the Company recorded non-recurring, non-cash impairment charges totaling $145.7 million, including an impairment charge of $89.1 million as the result of a write-down of goodwill and intangible assets taken in the second quarter of 2010 in connection with three of the six agencies acquired by the Company in 2008, and an impairment charge of $56.6 million as the result of a write-down of goodwill and intangible assets taken in the fourth quarter of 2010 in connection with the Company’s acquisition of Digital Media Group.

Presumably, things look a lot better once those things get fully written off.