What's The Opposite Of Digital Advertising? Hint: It's Artisanal And Its Wheels Go Round 'N Round


Published on June 29, 2016

“You see it once and it stops people in their tracks,” said CEO of Vector Media, Bill Schwartz,  in a recent interview on the subject of advertising on double-decker buses. “Try to imagine the impact of 40 giant billboards at street level in Manhattan or LA all during the day.  You can’t NOT see these.”

Vector is part of the out-of-home (OOH) advertising industry that not only puts advertising on buses and subways of all sorts, but advertises in airports, on bus shelters and street furniture, in movies and arenas, shopping malls and of course the traditional billboards.  According to the trade association, Outdoor Advertising Association of America, there are only about 205,000 of buses with advertising.  The organization claims about 2.2 million countable out-of-home displays, plus additional smaller sized ones such as news racks and ‘alternative’ ones which could be almost anything, like the side of a building.

The value proposition of OOH in general is articulated by the largest company in the sector, Outfront Media Inc. In their 2015 annual report, they say that unlike most other media platforms, OOH is “always on, viewable and cannot be turned off, skipped or fast-forwarded.” An executive at Paramount Pictures, who is deeply involved with marketing, but asked not to be named says that impact is the main consideration for large format out-of-home promotions. We look for something that looks very special. The creative has to be really organic to the actual advertising venue–not just something re-purposed from a poster or a photo shoot. The stuntier something is, the better. Bigger is important since getting something to really stand out is key.  This really helps with ‘unaided awareness’ of a movie. Whether somebody buys a ticket because of this kind of advertising is another story.”

The fact that out-of-home displays are countable is novel compared to the tens of millions of web sites and billions of unique Google GOOGL +1.46% searches where digital ads can be displayed.  With U.S. ad sales at $166 billion in 2015, the industry estimates OOH as 4.4% of the total or $7.3 billion. Of this, about 18% is in transit.

And yet, despite this scarcity, buying OOH advertising remains a relative bargain. In a phone interview with Mark Boidman, an investment banker from Peter J. Solomon who has worked with companies in the OOH sector since 2008 and works with the sector’s  industry groups, the current median CPM (cost per thousand people) of transit shelters at $3.45 is higher than digital advertising with a median of about $2, but compare OOH to non-primetime TV spots at $8.99 and. print magazines at $14.00.

 Courtesy of the Peter J. Solomon Company.

Courtesy of the Peter J. Solomon Company.

Artisanal Advertising

Vector Media, with 60 employees and $70 to $100 million in annual revenue according to the company, is small compared to the big players in the field; it is less than 10% in annual revenues of the most prominent public companies in the space such as Outfront Media Inc. (NYSE:OUT), Clear Channel Outdoor Holdings (NYSE:CCO) and Lamar Advertising (NASDAQGS:AMR AAMRQ +%.)  Schwartz reports that Vector has grown the top line revenue 20% between 2014 and 2015 and is profitable.

Vector works with advertisers on street furniture and events, but its bread and butter is in transit, including food trucks, taxi tops, and regular coach buses, but particularly in large format double-deckers.  They have long term contracts for about 3,000 vehicles including 500 double-decker buses in the U.S. and an additionalpartnership for cross selling for another 800 throughout Italy.

Artisanal Content. The company prides itself on fulfilling advertisers’ needs through its creative, Artisanal customized approach.  “We recognized quite early that the consolidation in the industry left a huge hole for us to fill as our larger corporate competitors don’t have the time or flexibility to focus on creating unique executions that is our specialty,” said Schwartz. “We like to think of ourselves as Ninjas on Jet Skis where everybody else is riding around on aircraft carriers.”

Out-of-the box requests. When Vector worked with the marketers of Sony Picture’s Angry Birds to create a memorable promotion, they needed to coordinate with suppliers and the bus companies that owned the vehicles.  “We had to go to our bus partners and tell them, ‘We want to do this crazy thing and drill holes in the sides of your buses.’ They say, ‘Fine, just put them back together when you’re done.’”

This stop action video shows how the bus promotion was constructed and how it looked once finished. 

Collaboration with other artisans. Vector doesn’t do the fabrication, but relies on partners. Schwartz says he works very closely with one printer, Moshe Gil from Carisma who has a special large 3D printer. “It’s a collaborative thing, and we talk to each other constantly exchanging ideas.  We have worked very closely with them from the beginning. He has all the templates on file.  He also basically runs a body shop, so if something goes wrong with a bus, he goes and bangs out the dents.”

Why is OOH so customized — and yet so cheap?

Schwartz says that selling transit advertising can be as Artisanal as its content creation.  He calls the process “a total push-pull. We deal with agencies. We deal with clients. We deal with buying services. We deal with experiential agencies. We deal with P.R. companies. Our business comes from 360 degrees. There’s not one place it all comes from. A lot of times we’ll be reading articles or watching a show on T.V. or something, and an idea will come to one of our sales guys, and there goes the pitch.”

And the competition is brutal. Of the 800 OAAA members, 500 are U.S. media companies competing for the limited inventory of displays. Even though a particular out-of-home company has long term contracts with the venue owner, perhaps with a regional dominance – or in the case of Vector double-decker bus dominance – there are enough alternatives in a given region or for a given format, that its hard for an individual display company to maintain any kind of pricing power. And  at the end of the contract, the venue owners  can raise the rents which adds cost pressure as well.

For most of OOH’s life, it has been very challenging to validate who is in the vicinity of a display.  “A billboard owner could tell you the number of cars that usually passed by during a commute, and some information about the demos of a working population, but that was about it,” explained Jim Dolan in a phone interview; Dolan is a  Managing Partner of the investment bank, Cherrytree, and was an entrepreneur in the media industry before coming to the bank.   “The way they would sell is to get a customer to try it, and if it worked, great – but they didn’t know why.”

Despite the very individualized placement of billboards and bus ads, the demographic information was so vague as to be useless, said Dolan. He thinks the newest digital technology will help make OOH more valuable to advertisers, and so the industry will begin to have more pricing power.  “There are devices on billboards, for example, that read license plates, to tell who owns the car and often they pass by. And although you can’t tell who the driver is, you know about the household demographics in great detail.”

Where’s the scale?

“Scale always matters in media,” says Dolan, but it isn’t just bigger that counts.  “Newspapers buying each other is not scale – it’s just addition.”   So if there is consolidation in the OOH industry, that doesn’t necessarily mean great scale; Dolan sees digital technology and consultative selling  as the fixed costs that companies will be able to scale.

  • “Centralizing the back office operations will be the core fixed cost advantage.”
  • Digital billboards which can run “time slicing and get more ads in front of audiences with the same real estate.”
  • “The real scale is in the expertise of selling the technology and will be a significant advantage when a company has a sales organization that figures out how to sell to new kinds of customers with new and important insights.”

Peter J. Solomon’s Boidman also sees technology as the way to higher prices and more consolidation in the sector. He predicts that in the next five years digital technology will drive the growth in OOH.  He believes that “Mobile, social internet and video will be integrated into OOH media, making it a more engaging and accountable media channel.”  Boidman thinks that there is such good technology to identify who is passing by what and how long the “dwell time” is, that he claims it will be more accountable than TV measurements.

According to Schwartz, Vector’s business demonstrates that the integration has already begun.

  • “We’ve got beacons and geofencing offerings, enabling advertisers to micro-target audiences, and send push notification.”
  • “We’ve developed a Wi-Fi system that’s basically in every one of our bus markets, so now, you’ve got tourists up there who are visiting. They have access while they’re touring around the city and the opportunities are pretty much unlimited with what you can do with that.  Last year on the Hampton Jitney [a bus company that goes between metro New York and Long Island destinations] we did something with HBO where they promoted their live streaming.”
  • The company is beginning to introduce enormous digital screens on the sides of the buses, and now had 8 buses equipped in this way.
 Bill Schwartz, CEO of Vector Media.  Photo courtesy of the company.

Bill Schwartz, CEO of Vector Media.  Photo courtesy of the company.

LGBTQ History Is American History

On Monday, I stood alongside leaders, activists, and people from all backgrounds that have committed their lives to fighting for LGBTQ rights. I stood humbled beside them, overcome with emotion and gratitude for the blood, sweat, and tears they’ve devoted to ensuring equal rights for all Americans, regardless of their sexual orientation. We stood together - gay and straight, brown and white, young and old - at the site of America’s newest national park: Stonewall National Monument.

 Pacific Press Via Getty Images

Pacific Press Via Getty Images

Established last Friday as the 412th national park site, the ground on which we stood bore witness to the events of June 28, 1969 that helped shape the modern LGBTQ civil rights movement. It was at the Stonewall Inn on that day that New York City police conducted a raid; one of many raids that had become commonplace at gay bars and often resulted in harassment and arrests. Unlike previous raids, however, this time the crowds held their ground and refused to disperse. The protest expanded to neighboring streets and into nearby Christopher Park. It grew to as many as several thousand people, lasted for six days, and marked a significant turning point in the struggle for LGBTQ rights.

Nearly 50 years later, in the very same vicinity, the events of June 27, 2016 will go down in history as the day when the President of the United States, the Department of the Interior, the National Park Service, the National Park Foundation, and individuals and organizations inside and outside the LGBTQ community together declared loudly and clearly that LGBTQ history is American history - and that at this place this story will be told.

For our part, the National Park Foundation will lead an effort to raise the approximately $2 million needed to launch the new park. We will work in partnership with local and national organizations and the community to fund National Park Service rangers, a temporary ranger station and visitor center, research and materials, exhibits, LGBTQ community outreach, public education, and scholar engagement. The Foundation will also help establish a local Friends Group to provide ongoing philanthropic support to the new monument.

As we move from the National Park Service’s first century into its second, I couldn’t be more proud to be part of a national park community that is committed to telling a more complete American story.

With the designation of Stonewall National Monument, the arc of equality bends a little bit more in a direction of ensuring that all people in this great nation have an equal footing in life. Places like Stonewall National Monument will help to ensure that future generations appreciate this place as they do Yellowstone, Yosemite, and the Statue of Liberty.

This work of telling America’s story is a cornerstone of our Centennial Campaign for America’s National Parks - a $350 million fundraising initiative that will help protect America’s treasured places, connect all people to them, and inspire our next generation of park stewards who will be adding their own chapters to this important American narrative.

Join us. Together let’s celebrate our newest national park, Stonewall National Monument, and let’s look toward the future as we honor an America that represents us all.

Support Stonewall National Monument at nationalparks.org/Stonewall and learn more about the Centennial Campaign for America’s National Parks atcampaign.nationalparks.org.



New Bluetooth Increases Speed, Range; Marketers Taking Note


Published on June 21, 2016

A new Bluetooth is coming to town and marketers and agencies are taking note.

The newest iteration of the wireless standard, widely used by smartphones, is moving squarely into the world of the Internet of Things.

The Bluetooth special interest group’s new wireless standard coming later this year quadruples the current range, doubles the current speed and drives an 800% increase in data capacity.

The technology promises to open new doors for brands to reach consumers.

“Bluetooth connected devices that can transmit larger amounts of data open up countless marketing possibilities,” Steve Callan, vice president and director of creative technology at Hill Holliday, told the IoT Daily. “Imagine a home furnishings store that can push decorating tips and discounts for the items in front of you, or a car that comes with its own promotional video and dealer contact information when you walk up to it.”

The new Bluetooth is expected to significantly improve overall connectivity and reliability of the Internet of Things. However, the key for marketers and advertisers is the added capacity for rich media, through what the Bluetooth group calls ad-packets.

“It will be interesting to see how these new ad packets get expressed on the device, especially as messaging is poised to be the next big mobile platform for connecting brands and consumers,” David Hewitt, global mobility lead, vice president of consumer experiences at SapientNitro, told the Daily.

One of the most significant features of the new Bluetooth is to link connected or smart devices, such as beacons, according to the standards body.

“Bluetooth 5 will make beacons, location awareness and other connectionless services an even more relevant part of an effortless and seamless IoT experience,” said Mark Powell, executive director of the Bluetooth organization.

There also are two potential sides of the new standard, at least in the view of one agency executive.

“Bluetooth 5 is touted to reduce opt-in hurdles that have been a huge barrier for marketers looking to connect with prospect customers,” said Hewitt. “On the flip side, if the technology makes it too easy to spam innocent customers, it will quickly face a backlash.”

All of the marketing executives interviewed generally agreed that the new standard will open up many more customer engagement capabilities, especially relating to new abilities to reach consumers on the go.

“We love the opportunity that Bluetooth 5 provides,” said Gary Greenstein, Vector’s chief revenue officer at Vector Media, the outdoor advertising company. “Without a cellular or Wi-Fi connections, we can leverage this standard to deliver rich media and location based offers in conditions never available to us before."

And integration between the physical and digital worlds can mean new opportunity.

This kind of rich and location-relevant engagement has been increasingly popular, but has been seen as difficult with the current technologies and standards available.

Bluetooth low energy (BLE) helped ignite the idea of reaching consumers in the right place and the right time via beacons, but so far has been limited due to the need for consumers to download specific apps to actually be beaconed.

However, the new standard stands to change that and enable ‘connectionless’ transmission, where the beacon signal can trigger content to a phone without the need to be paired, which currently happens through having the company-specific app installed on a phone.

"This is yet another example of investments in technology that power mobile presence marketing,” said Rob Murphy, vice president of marketing at location-based ad platform Swirl.

“Retail marketers who take advantage of these new capabilities can benefit significantly as the physical and digital worlds become more and more integrated."

While the new connectivity to consumers opens up the potential for new messaging, marketers are looking to understand how it plays into the world of their customers, especially with a focus on the upside.

“For retail and hospitality environments like flagship stores, cruise ships and museums, Bluetooth 5 could be a welcome addition to bringing environments to life with an easy, no-need-to-pair handshake with ability to send rich media making for a more responsive experience,” said Sapient’s Hewitt.

“Ultimately, BT 5 will bring more frictionless convenience to our lives, in a world where finding and opening an app on a smartphone is a chore,” said Sapient’s Hewitt.

Beacons On Buses Trigger Mobile Advertising To Pedestrians


Published on June 9, 2016

Consumers walking on busy streets in major cities are likely being beaconed, though most likely have no idea.

Since their inception, beacons have been an insider sort of technology that just makes more accurate the location information of an individual for a brand or marketer.

Most of the beaconing implementations involve fixed locations, like in stores, shopping centers and stadiums.

And then there are beacons constantly on the move.

Last summer, Vector Media, the outdoor moving media company, teamed with beacon-maker Gimbal to install beacons in 500 of the double-decker buses where Vector places advertising from major brands, as I wrote about at the time (Advertising on the Move: Beacons Added to Double-Decker Buses).

The buses tend to roll in retail-heavy markets, including New York, Miami, Los Angeles and Chicago.

I checked in with Vector yesterday to see how the beaconing has been going.

The two beacons on each bus initially were used just to collect information, said Gary Greenstein, Vector’s chief revenue officer.

The idea was to learn more about the audience.

Since beacons can essentially gather a bit of information from any phone that has a beacon-enabled app on it, such as Shazam, Vector wanted to start to better understand more about the potential viewers of their mega-ads on the sides of the business.

The double-decker bus advertising by Vector started some 10 years ago in the pre-smartphone era. Beacons linked that traditional out-of-home ad model to current digital location info.

“The oldest format and the newest format are coming together,” said Luke Leonard, Vector’s head of marketing.

A few years back, Vector added Wi-Fi to the buses in which riders received ads from sponsors.

Then came the Gimbal beacons, with one unit in the front of the bus and one in the back.

When a consumer gets within about 50 feet of the bus, they can get a text message relating to an ad on the side of the bus.

Interestingly, consumer reaction is one more of surprise rather than intrusion, since the message is extremely relevant to what most of the pedestrians are viewing, according to Leonard.

“When they get the message, they are excited,” said Leonard.

“The ad itself becomes the beacon,” said Greenstein.

Continuing the new trend of integrating beacons with geofences and GPS location data, as described here last week (Beacons, GPS, Wi-Fi Combo: The New Mobile Presence), Vector is using all three location aspects.

As to results, 7% of people messaged click through and once inside after that click, 48% engage more, according to Greenstein.

For example, in one campaign for Sprint, of those who clicked through, 48% clicked to find a store near them.

A call-to-action in the messaging is the critical component, said Leonard.

While many of the 40 or so people on a bus at a given time receive location-triggered messages, two-thirds of the total messages are sent to people on sidewalks near the buses.

The location information from people on and near buses eventually will be tied to location-information at and inside stores.

The impact of the Internet of Things will literally be everywhere.