Determining a Win Win Revenue Model for Your Network and Location to Improve the Bottom Line

Speakers: Jeff Jansen (President, Adspace Mall Networks), Tom Lapcevic (President, Clubcom), David Teichner (CEO, Channel M), David Leider (CEO, Gas Station TV), Kim Norris (President, OVAB)

Company Information

The Out-of-Home Video Advertising Bureau (OVAB) was formed in January 2007 to help advertisers and agencies and seeks to grow the industry like IAB did for internet and CAB did for cable. The organization has 17 members with 27,531 locations and 790,748 total screens.

Channel M is a content production firm that also sells advertising for out of home video networks. They work with over 20,000 venues and reach over 100MM consumers per month.

ClubCom was launched in 1999 and provides customized digital media networks for health clubs and bowling centers, reaching over 80MM viewers/month with an average visit of 89 minutes. They operate over 2,000 networks with over 40,000 screens. It should be noted, however, that ClubCom was a product of Precor, a top manufacturer of home and commercial fitness equipment. And in 2002, Precor joined Amer Sports, the world's #1 sports equipment company.

The AdSpace Mall Network:

• 102 class A malls with 100 under contract
• 14+ displays per location avg.
• Over 100MM impressions/month
• 47% watch for 114 seconds per visit
• Content includes summary of sale items and mall event info.

Gas Station TV:

• IPTV network on pumps at gas stations, launched in 1999
• 5,000 screens in 300 cities
• Reaches 30MM+ consumers per month

Session Recap

The session begins by listing considerations for your network (content strategy, parties involved, financial arrangements, etc.) and common objectives. I won't bore any of you with this extemely basic information. If you don't know this stuff, I doubt you are spending $2k/person to attend the show anyway. We "learn" that there are ad sales networks, content driven networks, and hybrid networks. The session unveils "The Matrix" for digital signage, which sounds interesting but is basically a table of the three network types outlining what party (network, venue operator, and/or facility operator) bears the burden for various considerations (installation, marketing, various costs, etc.).

Channel M talks about their experience with Ashley Furniture Homestore, the largest home furnishings retailer in the United States with 300 locations. The goal of the network was to enhance the store environment with targeted entertaining content and promote retailer initiatives (highlight merchandise/customer loyalty/brand equity/corporate messaging). David Teichner discusses the 40 hour playlist that they convinced Ashley Furniture to buy into in order to avoid employee burn out (solid contract there!). Content is comprised of music videos, promo pieces, corporate messages, and Sealy advertisements. The playlist has regional variations and is dayparted. David shows a content example which is a music video by Soul Asylum called Stand Up And Be Strong (if I remember correctly). It has the Ashley logo in the upper right and "No Payments Until 2009" displayed on the bottom. I'm assuming they have a licensing agreement which allows them to do so. The results of the network? - a happier staff, achieved sales goals, enchanced store environment. Channel M's role with Blockbuster is also discussed. They have a dedicated Blockbuster Entertainment Network production team, an agency relationship for promo spot design, and they put crews at red carpet events for exclusive Blockbuster footage. David shows a clip of Blockbuster interviewing Kurt Russell. Results: Blockbuster Entertainment Network rules!

Clubcom discusses their network which is a fully integrated solution, combining overhead programming, personal programming on individual machines, and even a system which provides personal fitness data and facility controls. Their clubs pay for everything (see ClubCom/Precor/Amer Sports relationship in first section), there is a subscription fee, and also a revenue share on ads if opted in. Tom Lapcevic discusses the importance of making sure the programming fits the application. On the overhead displays they had HBO's Entourage, Season 3 teasers and on the personal displays they offered full episodes from Season 1 & 2 as an option. He notes that pushing certain content onto people can be intrusive/offensive and that gym members feel they own the club so you have to be careful with what you display. Tom discusses several of their networks and their individual results. The Fitness First Lifestyle Network in Australia received a 63% advertising recall and increased Gatorade as "regular consumption brand" by 32% (from 1 in 4 to 1 in 3). On the Fitness First (UK) and LA Fitness (UK) networks, Sony Ericsson got a 70% total overall ad recall. On the Court South Fitness Network in Tennessee, Apex Sports Nutrition increased its sales 100%, resulting in a $140,000 annual sales increase. The bottom line was about $100,000. Nice margins!

Jeff Jansen, President of Adspace, presents a Lane Bryant case study. This was a 10 mall pilot which was expanded to 20 during the flight. He discusses the importance of having the logo on the ad at all times, so that if consumers miss part of it they will still know who's ad it is. Good point, and I agree. Adspace used intercepts near mall exits at two malls (one in OH, one in OR) over the course of five days. The sample size was 200 and women were asked "Do you ever shop for women's clothes that are size 14 or larger, either for someone else of yourself?". Wow, what a question to have to ask women! Jeff presents the numbers based on % of percentages, which makes it sound much more attractive, so I will list them more concretely. Of the 200 women surveyed, 59 recalled the ad when prompted, 35 visited the store, and 25 made a purchase. Of the 25 who purchased, 14 of them bought jeans. What kind of ROI can we extrapolate from that? If we are going to say that digital signage will drive sales, then let's talk about it. How cost effective was it for Lane Bryant to advertise at these two malls?

Gas Station TV discusses their client's objective of driving awareness of an upcoming feature film. They used Nielsen testing and studio exit polling and operated with a 10 day prerelease. Exit poll numbers exceeded expectations for the studio based on the media schedule. Nielsen results:

• 85% watched/listened to GSTV
• 84% look forward to waching next visit
• 78% believed GSTV a good source of product info
• 70% recalled one or more ad
• For the feature film, total awareness came in at 38% and 55% recalled any ad