Looking at the Digital OOH numbers game

April 16, 2011 by Dave Haynes

The MediaPost Digital OOH Forum on Thursday in New York had several very solid panels. One of the things that struck me in watching the live stream through the day was the network numbers game.

Patrick Quinn of PQ Media did his thing on where the sector is at and going, and indicated there were some 468 networks in the U.S. at the end of last year, rolling up to about 1,00,000 screens.

Later in the day there was a session featuring four of the companies that are trying to herd all the industry cats into their yards, in their own ways, to roll up their media avails.

Peter Bowen of SeeSaw Networks described what his firm does as a demand side platform for Digital OOH media, and said he represented about 70 different networks across about 40 different types of venues.

Rob Gorries described Adcentricity as an ad network and said between the U.S. and Canada his firm represents about 100 different networks and 200,000 screens.

Jason Kates described rVue as a demand side platform for Digital OOH that supports the buying side of media, and has about 130 networks and 600,000 screens.

Graeme Spicer of Vukunet (NEC) said his firm, along with partner DOmedia, is more about the downstream work to execute on campaign plans across scores of different platforms. He suggested there are 60-70 networks that matter.

By networks that matter, Graeme is talking about networks that have enough scale and coverage to be meaningful to larger buys, and operate with sufficient reliability and measurement to be included.

But going back to Quinn, and I briefly wrote about this the other day, the most interesting figures were provided were all about dollars, not networks and screens. By Quinn’s analysis, the top 10 networks (like RMG, Adspace, Zoom, Captivate, etc) pull in 70% of the booked revenue in this sector. There are more than 300 networks, by Quinn’s estimates, generating less than $1 million in annual ad revenues.

Some may be able to plug along because of the way their business model sets up (such as the venues sharing the capex costs). Others will merge and get a  little bigger and stronger. Some will get acquired by the big (or at least bigger guys). And some will unfortunately fold.

I still hear regularly from people who want to get into the business because they have a line on a set of venues and believe they make for a media network. I suggest they do their homework and think hard. I don’t tend to consult because they don’t have the money for hired advice.

Advertising is a tough game even for established mediums, and SeeSaw and the others may be able to help. But more than ever, perhaps, this is a medium that demands a really solid plan, experience and pockets deep enough to get to scale, do the needed research, and build a compelling story. Even then, it’s like there will be an exit through acquisition.