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I’ve been watching the ad market closely for many, many months now.  We all know how depressed the ad business has been and how fearful folks on the brand side can be about pulling the trigger on campaigns this year….”is it time yet?” seems to be a common thread.  It’s made this year, to date, frustrating for most to say the least – only in that it’s very difficult to forecast and plan for what’s coming because everything is so last minute.

We’re living in a spot buy economy for media utilization, which has not happened in a long, long time.  Large campaigns that usually have some runway to them are being decided on 2, 3 and 4 weeks out.

From what I have seen, the current economic conditions have dramatically accelerated the interest and awareness of Digital OOH – which is a good thing – and the fact that we’re digital means that when a campaign pulls the trigger, we can launch in very short time periods.  I’ve seen a few campaigns planned, bought and launched in less than 4 days from initial contact to live.

Since January, my feeling (and granted I’m no economist and an eternal optimist) has been that the ad business will likely start spending again in Digital OOH in healthier quantities in late June – late July with a full run up in September.  I don’t think the same effects will happen to the broader ad market but newer, cost effective, efficient, innovative mediums will start to see some movement.  Oh…and did I mention we’re Digital?

So it was interesting to see an analyst on Reuters comment on the recent investor run-ups in media stocks.  He has a more dire prediction (he’s commenting on the market as a whole and mainly focused on the holding cos and large media owners which make up the vast bulk of total ad spend)

If the recent run-up in media company stocks is any indication, a number of investors believe advertisers are again ready to open their checkbooks for television campaigns, radio spots or a roadside billboard with a 14-foot-tall underwear model.

…

Still, experts warn advertising budgets are not yet showing indications of a comeback, after corporations heavily cut spending on everything from print campaigns to Web banners as the recession worsened late last year.

While you’ll always have disagreement between the optimists and the pessimists on what will happen and when, recent movement and activity in Digital OOH ad sales leads me to believe that the purse strings are loosening and that many simply want to “get down to business”.  It just so happens that, for the innovative, Digital OOH may benefit faster than some expect

Do investors know something we don’t?

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A number of people, including Bob Garfield, have predicted this was coming for some time.  The Brand/Agency fight over remuneration has been a challenge going on for some time now and it’s continuing to accelerate.

According to Ad Age, Coke has decided to move to a value/performance based relationships with their media and ad partners.  The theory is “if you don’t at least hit last year’s objectives/result, you don’t get to benefit from profitability”. Coke is trying to move everything to this area by 2011.

CHICAGO (AdAge.com) — Coca-Cola Co. is trying to start an industry-wide movement toward a “value-based” compensation model like one it’s adopted that promises agencies nothing more than recouped costs if they don’t perform — but profit margins as high as 30% if their work hits top targets.

Usually tight-lipped Coke disclosed its plans at the Association of National Advertisers Financial Management Conference in Phoenix on April 20, saying it wanted to nudge the industry into adopting value-based models as a standard practice. If it succeeds, agencies accustomed to being able to book profits long before they deliver work won’t have that sort of certainty anymore.

P&G started this years ago and a few other brands are starting to really push this model.

Nokia recently moved to this model and upon refusal to move this direction from one of their agencies, they pulled the entire account on the spot.

This marks a major crimp/problem for many agencies.  The ad business has been fighting this form of shift for some time.  There are so many factors that could impact their profitability on this model (e.g. let’s say coke launches a crappy product but the ad campaign is fantastic.  If consumers don’t like the “taste” they won’t buy, affecting Coke and therefore the agency’s results.) Or alternatively, if a Brand manager makes bad decisions about a program or chooses creative that the agency doesn’t support….

This could be very bad for “new” media as the ad business is typically very risk averse.  New technologies or opportunities may never see the light of day under the bigger agencies in this model if it means that the agency and account director may not get their bonus if they “try new things”.  Alternatively, smaller agencies who take risk or innovative ADs in agencies could blow their numbers out one year and be fired the next.  It’s a tough conundrum for newer media.

Regardless of the push-back, this matter isn’t going away and many agencies are having problems wrapping their heads around how to tackle this.  It marks a wholesale change in their business models – one that could be crippling if not executed/affected well.  Many of the old guard in media will have the hardest time adopting to this form of compensation (hence the push back)

Brands or cognizant that this could really mess up the agency world and so are taking a slow approach to migration but it definitely is coming

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Wow – this has gotta suck.  Isn’t it a little weird how everyone is saying that the little, unstable guys will go bankrupt?  This kinda turns the tables doesn’t it?

read away

NEW YORK (AP) — Shares of Clear Channel Outdoor Holdings Inc. slumped Wednesday after a Goldman Sachs analyst downgraded the stock to “Sell,” citing a deteriorating outdoor advertising market, a recent jump in the company’s stock price, and the likelihood of default at its parent company.

Goldman analyst Mark Wienkes cut the stock from “Neutral” in a note to clients Wednesday.

Shares fell 26 cents, or 5.3 percent, to $4.63 in afternoon trading.

The company’s stock closed Tuesday up about 50 percent since the beginning of March, when it reported a fourth-quarter loss of $3 billion because of an impairment charge. Revenue fell 16 percent.

Wienkes said the rally is unjustified. “In the near term, Clear Channel Outdoor will likely continue to experience sizable revenue declines,” he said, adding, “Faster expense growth has and, we expect, will continue to shrink cash flow margins.”

On top of that, parent company CC Media Holdings Inc. looks more likely to default on its debt, Wienkes said.

The parent company, which also owns Clear Channel Communications Inc., was taken private last July by Bain Capital Partners and Thomas H. Lee Partners. It has about $21 billion in debt, according to a securities filing this week, and has drawn concern from credit rating agencies that the recession may drive it into violation of its financial obligations.

The report from Goldman said a violation of its debt terms could push CC Media closer to a bankruptcy filing next year.

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About time!

Seems people are getting smart about how to start to use Twitter feeds in ads, per my comment last time on the Land Rover ads – just one step further.  via @AdRants on twitter, Volvo has started to embed twitter comments and feeds in their YouTube ads.

Why more people don’t do this in Digital OOH I just don’t know.  There are IP connected screens that can extend social and mobile media into the real world.

Target, engage, repeat…just keep saying it to yourself

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This has kinda been my mantra about the benefits of Digital OOH for some time now. The medium is efficient (more targeted media for less), effective (it produces better ROI/action results if used properly) and scaled (there is now enough media out there in Digital OOH to get the coverage you need).

So when I read this post on AdRants about Facebook at Ad:Tech Paris, their mantra and the line from Facebook Europe, I had to smile:

The biggest takeaways: Mark Zuckerberg is God, and God’s particular mantra is “Efficiency, Effectiveness, Scale.”

Media has a problem and those three little words are what you should be focusing on to help your clients succeed.

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Cool little article and video around how a new approach to design and creative in newspapers helped save and grow circularion in Poland.

There’s a few folks out there in the Digital OOH field like eCast (bars) and Showcase Media (taxi/transportation) that are taking not only their fundemanetal content design but ALSO their actual product design to the next level and turning the consumer expectations of DOOH on its head.

The results are fantastic and quite powerful.

The video is a good watch if you’re a designer and need some help convincing those above you on where to take DOOH content design, etc.

Reminder that good design attracts viewers, which in turn attracts advertisers.

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Haven’t been able to confirm this news AT ALL so it may be fluff but just heard some possibly interesting news on Posterscope (which also contains Hyperspace).  The source was kinda credible but ya never know.

This pure (unsubstantiated) rumor/ rumbling is that there may be some consideration going on to merge Posterscope/Hyperspace with Isobar.

Isobar, for those of you who don’t know, is the aggressive roll-up of Digital acquisitions that Aegis put together a few years ago after an acquisition binge to get into “Digital”. Smart/talented group of folks.

There was some other news in there I heard WRT Vizeum but I have the attention span of a gnat so kinda trailed off at that point.  While all of Posterscope doesn’t necessarily make a lot of sense to me, some of their Digital properties like Hyperspace does, depending on where Aegis feels DOOH is going, so who knows.

If it does indeed turn out to be true, it helps support some of the comments and trends I’ve been making/seeing on the Digital shops quickly and aggressively moving to make Digital OOH/Digital Signage advertising part of their groups, instead of residing with the OOH teams/companies.

Background articles are here:

http://www.robgorrie.com/2009/04/06/razorfish-into-tv-expanding-beyond-digital/

and here:

http://www.robgorrie.com/2009/03/25/is-digital-ooh-finding-another-home/

My my…things ARE getting interesting, aren’t they?

Like I said though…this is just rumblings and may not be true.  I did, however, meet up with a senior guy from Aegis at the iMedia event I presented at that is trying to build an uber-platform for Digital, integrating all of their various properties/formats of Digital together and he was QUITE interested in what we were up to and how it fit in to their “super model”.

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Kudos to the fine folks at Captivate, Land Rover and Y&R/Mediaedge:cia

I’ve been harping on now about (Stephen Randall’s) New Media Triad for a while.  Trying to explain to people that with Digital OOH’s IP connected screens and social media’s crazy speed and connectedness that it’s about time that creative agencies and media agencies start learning how the hell to INTEGRATE Digital OOH into a broader spectrum program that ties the various aspects of all of this “connectedness” together using Digital OOH as a “promotion base”, attract people with things like Twitter keywords and drive them to various web or social properties for engagement and involvement.

Let me tell you, it has not always been an easy sell – especially for those who don’t understand how easily all of these things connect and can be launched/integrated.

So I’m happy to give kudos to the folks at Land Rover, who I assume launched this program through their creative/media agencies Y&R & MediaEdge here in New York, promoting Land Rover’s semi-private retail launch event here in NY, promoting it on Captivate screens.

General idea?  Use Captivate screens, promoting the SUVs with sexy media with a Twitter keyword of #lrny.  This keyword allows you to tweet news to a searchable twitter tag (above) that let’s you comment on the event.  You can even use twitpic to post photos while there.

And all the while you get folks twittering about the event and vehicles here:

Now all they have to do to make me happy is integrate those tweets back into the ads to further engage consumers!

Well done guys!  Creative maturity starts to hit the DOOH scene!

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In a marked departure from their “traditional” business of non-traditional (aka Digital), Razorfish has jumped into traditional advertising by doing their first TV Spot during the “Celebrity Apprentice” for All-Laundry.com.

The AdWeek post can be found here

The work is more evidence that the lines between digital and traditional shops are blurring. Just as traditional agencies are expanding their digital capabilities, interactive shops that until a few years ago mostly built Web sites and banners are muscling into turf that was formerly the preserve of general agencies. Digital video is a key battleground. Traditional shops have laid claim to it as their preserve while digital specialists like AKQA, R/GA and Razorfish create much of it themselves.

This is a follow up post to my spot on DOOH finding another home in the Digital agencies because they don’t look at it in such silos and are proving to the market that they look at things (campaigns and media purchases) in a much more holistic manner than many of the traditional shops have been doing with the emergence of all of the new-fangled channels” that we’re all forced to deal with.

In further evidence of this starting to affect traditional shops, I’m sure many have seen JWT closed their Chicago office.  The could never adapt after losing their key clients. Those who can’t adapt to the new realities of the media business are suffering.

As I mentioned, DOOH may be just as attractive given its IP connected nature and ability to tap into social and mobile programs already on the go inside the Digital agency walls

UPDATEW: Ouch!  Apparently AdRants didn’t like this little approach

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Good report and article from AdWeek on the effects of Digital OOH and Shopping and purchase decisions.  This is kinda what the Point-of-Purchase (now Shopper Marketing) industry has been telling people for years but it’s never been as sexy as buying TV so it’s always an afterthought.

Me thinks some brands and agencies may need to re-think some approaches soon if they want to make in-roads in the next 2 years in this market.

The kicker is that Internet advertising has little or no impact on planned OR unplanned purchase decisions.

From back in the day: “things that make you go hmmmm.”

http://www.adweek.com/aw/content_display/news/client/e3ie9ac42d5eeee8158103eb7a8bc771b90

Being an old retail hand, I’ve been around this type of research/knowledge for ages – it’s interesting to see it finally show up in the ad rags though….prior to now it’s been relegated to the POP trade rags like POP Times

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