Commercial Revolution: Digital Ads Everywhere

Standing in an elevator. Waiting in line at a store. Sitting in a doctor's waiting room. In these and scores of other places that were once arguably boring, you may now find yourself watching a video screen, one placed there to show you tailored content—and especially ads.

You may call it some choice words, but the advertising industry calls it alternative out-of-home advertising. It's also called lucrative, being the fastest growing segment of the advertising market, says PQ Media, a market research firm in Stamford, Conn. While the rest of the ad industry is lumbering along with 6.4 percent annual growth, alternative out-of-home advertising is growing at 27 percent, the company states.

Counting only the screens installed by the member companies of the Out-of-Home Video Advertising Bureau, at last count there were 790,000 screens installed, in 27,000 different locations (counting hotels with multiple screens, including the elevators.)

Elevator ads?

There's a good reason why advertisers are hunting you down in elevators and waiting lines, explained Leo Kivijarv, vice president of research at PQ Media.

"Traditional media is losing eyeballs, listeners and readers as consumers switch to alternate media, such as blogs, especially the youth market," Kivijarv said. "Those that remain are less engaged, as they are media multi-tasking with, for instance, a computer and a TV in the same room."

With out-home-media, most viewers are in a captive environment, such as an elevator or waiting in line at a store, and their attention is more likely to be engaged, he explained.

Advertisers are also eager to reach the youth market since young people have few brand loyalties, leaving them susceptible to advertising, he noted. Their diverse activities make young people harder to reach with ads—but that also means that advertisers who do manage to reach them can reap rich rewards, he said.

And so there has been an upsurge of video advertising in malls, big-box retailers, grocery stores, medical offices, convenience stores, restaurants, bars, office buildings, gas stations, elevators, health clubs, airports, buses, taxis, subway stations, sporting events, fairs, concerts and even shopping carts.

Video pollution vs. 'wait warping'

Of course, one person's advertising is another person's insufferable video pollution, but aside from a few hostile editorials there has been no backlash, Kivijarv said.

"Right now the consumers are not complaining much since many times there is an entertainment part to the content," he said. "Cinemas, for instance, started with straight ads but then started adding trivia questions and the latest news about Paris Hilton. The audiences then stopped complaining, especially the youth market that the ads were aimed at." The informational content is usually acquired from a TV network but is sometimes custom-made, he said.

In fact, to be a member of the Out-of-Home Video Advertising Bureau (headquartered in New York City) an out-of-home advertiser's material must include informational content, explained the group's president, Kim Norris.

"There has been no backlash," Norris agreed. "I think ultimately consumers police the media in their environment, but so far the research has all been positive." She added: "We have also come across the concept of 'wait warping,' meaning that a customer's sense of time while waiting in line is diminished if you are entertained or informed."

Digital billboards, too

Digital billboards are part of the new out-of-home advertising gold rush but are not counted by Norris since they cannot show informational content—drivers might have accidents if they paid sufficient attention. With its ad changing about every seven seconds, the sign company can charge about 10 times more for a digital billboard ad than for a conventional billboard ad, Kivijarv noted, and advertisers will often have tailored ads for specific times of day and the demographic of the passing cars.

In fact, the advertisers will often mount cameras on the billboards to take pictures of the passing cars, to make sure they represent the kind of demographics that their ad is trying to reach, he said.

While digital billboards cost more than conventional billboards—the billboard firms have only put a few in each of their larger markets—maintenance is trivial, since ads can be changed by uploading a new image, rather than by sending out a crew of paper hangers.