“Where others fail on targeting front, digital out-of-home delivers”

Although this is a fairly self serving for ADCENTRICITY, this is a good Q&A session conducted by analyst Sarah Barry of SNLi regarding digital out-of-home…

Where others fail on targeting front, digital out-of-home delivers, CEO says

April 15, 2009 8:17 AM ET
By Sarah Barry

ADCENTRICITY, an aggregator in the digital-out-of-home advertising sector, unveiled on April 13 a full-service, cross carrier mobile marketing offering. In tandem with the launch, SNL Kagan spoke to ADCENTRICITY CEO Rob Gorrie about the digital-out-of-home industry in general and how it is evolving to find new ways of reaching customers in new places. An edited transcript of that conversation follows:

Can you tell me a little about the digital-out-of-home environment and ADCENTRICITY’s place within it?

From an industry perspective, the digital-out-of-home space is LCD screens in various environments — meaning gas stations, convenience stores, grocery stores, pharmacies, doctors’ offices, the list kind of goes on. These screens provide both customized content and advertising opportunities to speak to consumers in sort of captive environments where consumers spend about 30% of their time, which is on the go.

There’s been sort of a convergence of decreasing technology costs and an increase in fragmentation that has led to the entire industry growing up and people needing much more targeted and much more localized ways of being able to reach people. It’s getting to a point now where there is a great, larger, national-scale opportunity to be able to use each of these various environments to be able to speak to clients or consumers in a way that is less obtrusive, but still be able to sort of be around your consumers in what I call the warm-fuzzy-media-blanket effect — really staying with consumers and being with them as they’re on their path to purchase to help facilitate increased sales or just increased engagement with consumers.

So what is ADCENTRICITY’s role?

ADCENTRICITY is what would be called an aggregator in the space. There are hundreds of these digital-out-of-home networks. It’s almost like back in the early days of Internet advertising when there were hundreds and hundreds of Web sites that were all looking to offer advertising and we are the equivalent of what would be the Advertising.com.

We’ve got right now over 80 networks and more than 140,000 screens in North America. And those are in 16 different categories and 72 different subcategories. So a category might be medical and a subcategory in there might be pediatrician offices, or OBGYN offices or chiropractic offices. So you can target right down to a specific type of medical venue if you so desire.

We also have an enormous piece of proprietary software that we’ve developed in-house that allows us to cut the time it takes to buy and manage these ads from three weeks to 30 minutes.

The idea behind it is when you’ve got hundreds and hundreds of networks out there, you’ve got six key points of pain: One — actually understanding what it is that you’re buying from an audience perspective. Two — buying. No brand or agency really has the time to deal with 100 different networks to buy from so we are a single-source provider. Three — creative. Four — distribution is a big one. Once you’ve actually made this buy, how do you get all of this creative to all of the locations and manage it effectively. Five — reporting. It ends up being 3,500 pages of affidavit that we all summarize from the various networks and deliver as a proof of performance. Six — billing. We provide one bill, so instead of the internal accounting departments having to deal with 100 different networks, they get to deal with one person who is chasing them for money.

We’re trying to take all of those pains out and make this medium really accessible to everyone.

Does the digital-out-of-home sector have trouble getting advertisers to move beyond seeing the out-of-home sectors as just billboards and street furniture?

Up until now, the whole industry has sort of been slotted into the out-of-home group, which is a fairly small portion of the media spend that’s out there. That is starting to change fairly dramatically. All of the sudden, there are little political wars that are about to start because the digital guys are going: ‘Wait a minute. All of these screens are IP-connected and anything I am doing on my Web site or on my social networking sites or on Twitter can all be used in here, so why isn’t this a digital property?’ It’s a huge benefit to the industry because there’s a lot of dough in the digital sector that doesn’t exist in the out-of-home sector right now.

Can you give me an example of how an advertiser can use the digital-out-of-home medium to provide targeted advertising?

As an example, somebody like a Samsung, with one of their creatives, they’ll show somebody typing on a phone. In bar environments, it may say, “By the way, you look hot,” but in convenience stores, they’ll use the exact same creative so it doesn’t cost that much more, and just change the message on the phone to say, “Honey, don’t forget to pick up the milk.”

There are other opportunities, like with the Skittles-Twitter homepage takeover that happened a couple of weeks ago. To give you an idea of how you could use that more effectively from a targeting perspective, obviously Skittle’s products are sold in convenience stores everywhere and there is digital-out-of-home media in each of these environments. Well, why don’t we take each of those Twitter feeds and integrate them into a Skittles ad that’s actually at the point of purchase? While some of the comments were negative, some of them were absolutely hilarious and you can use those in the digital-out-of-home environment to have a hell of a lot of impact.

For the rest of this SNL Q&A session click here.