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Synopsis of
Digital out of home media industryMay 2011
Research aims
Definition and fragmentation
Industry performance
What we can expect in the next two years
What we can learn from others
Definition and
fragmentationfragmentation
Definition
Out of Home Digital Media is the
frontier between television, the
internet, mobile, interactive
terminals and the traditional
billboard or poster.
http://en.wikipedia.org/wiki/Out-of-home_advertising
2 categories of dooh
Digital Place Based Networks (integrate targeted
entertainment and/or info programming with ad pods
narrowcast on digital video screens)
Digital Billboards/Signs (advertising-only messages
through screens equipped with LED or LCD techs)through screens equipped with LED or LCD techs)
http://en.wikipedia.org/wiki/Out-of-home_advertising
fragmentation
Fragmentation in US market
http://www.coadydiemar.com/html/mm_volume6_2011.html
Industry fragmentation
Players (220) Types Key geographies (4)
Emergingmarkets (16)
Categories Delivery
CBS Outdoor
Clear Channel
Neo Advertising
Zoom media & Marketing
Brand Connections
Gas Station TV
NBC Everywhere
Network Operators
Aggregators
Speciality agencies
Venues
Brands
Americas
Middle East / Africa
Asia Pacific
Europe
US / Canada, Mexico
Brazil
UK
Germany
France
Spain
Italy
Russia
D. Place-based (DPN)
D. outdoor (DBB)
Cinema
Retail
office
entertainment
transit
Microtiles
LCD
LED
Organic LED
Wi-Fi
Cellular 3G
WAP
QR CodesNBC Everywhere
Premier Retail Networks (PRN)
RMG Networks
Cemusa Inc
CNN Airport Network
rVue
Seesaw Networks
AdCentricity
...
Russia
Japan
China
South Korea
Australia
India
Middle East & Africa
transit
roadsideMobile apps
Bluetooth
SMS
NFC
3D
SaaS or ASP?
Dynamic, fragmented, and rapidly evolving space
http://dse-365.ascendeventmedia.com/ExhGuide.aspx?p=64#1512
Venue granularity
Further granularity can be applied
http://www-958.ibm.com/software/data/cognos/manyeyes/visualizations/digital-
out-of-home-media-categori-2
Patrick quinn interview from pq media
http://www.youtube.com/watch?v=i4Bc-8paLMk
Milestones 2010
June 2010. PepsiCo, signs multi-year, multibrand agreement with Gas Station TV.
Feb 2010. LocaModa, launch DOOH app store inc Foursquare
Feb 2010. Disney + Google bid to invest in Bus Online in Shanghai.
2010. 16% DOOH growth totaling > $6.47 bn.
2010. Revenue increased by10% and DOOH share of the OOH market to 9.4%, despite bad economy
April 2010. Nielsen becomes the accepted audience measurement tool.
Milestones 2011
Jan. Access 360 Media, digital networks in stadiums, arenas and shopping malls, secured $12mil in capital
March. Al Barq installs innovative Digital Media Units, adding 58 new screens in Khalidiyah Mall
Feb. 7-Eleven TV will reach more than 200 million shoppers monthly – 4th largest TV channel – worth $75mil.
April. RMG + Blue Bite deploy first NFC (Near-Field-Communication) technology.
May. VisionChina expands transport coverage add 3 new lines.
April. RMG predict 25% of networks to merge or be acquired in the next 1-2 years.
Industry reaching $1bn in revenue
mobile
DOOH DOOH reaching $1bn in revenue held back by fragmentation
0 2 4 6 8 10
internet
Years
Pq media report
The PQ Media Global Digital Out-of-
Home Media Forecast 2011-2015 is the
most comprehensive source of strategic
intelligence used by leading DOOH
operators due to its breadth and depth of
data and predictive analytics.data and predictive analytics.
http://www.mediavataar.com/news.php?id=735
http://www.pqmedia.com/globaldigitaloohforecast-2011.html
It also includes five-year forecasts, five-year histories, and a wealth of other exclusive data, analytics and insights.
industry performance
Key markets
The U.S. remained the largest global market, while
China was the fastest growing.
China currently leads the world in the number of digital
signage displays deployed and number of NASDAQ IPOs,
with the country's biggest digital signage firm,Focus with the country's biggest digital signage firm,Focus
Media Holding, alone operating more than 120,000
screens.
http://knol.google.com/k/how-big-is-the-digital-signage-industry-in-china#
Digital versus traditional
2013 forecasted OOH Ad spend US
dooh2010outlookv4ltd-us-100426184926-phpapp02.pdf
Dooh spend
http://www.digidaydaily.com/stories/the-quiet-digital-revolution-in-outdoor-1/
25% $500mil
Digital place-based networks
Digital billboard and signage
Dooh spend split in us 2010
$3.5 billion in sales
16% – 17% growth in 2011
75%$1.5bn
PQ Media
DPN made 3 times larger than DBB.
Venue granularity
dooh2010outlookv4ltd-us-100426184926-phpapp02.pdf
Monthly DOOH screens viewed by venue 2010.
Campaigns (RFPs) by industry industry industry industry in Q4 2010
The telecommunications industry represented more than 50%
http://www.marketingcharts.com/direct/telecom-leads-q4-dooh-rfps-16131/adcentricity-q4-top10-venue-inclusions-by-subcategories-feb11gif/
Campaigns (RFPs) by venue venue venue venue in Q4 2010
Long dwell times, interactivity, social nature and consumer connectivity options within these environments saw growth
http://www.marketingcharts.com/direct/telecom-leads-q4-dooh-rfps-16131/adcentricity-q4-top10-venue-inclusions-by-subcategories-feb11gif/
Top 10 networks
Largest DOOH Networks - based on 18+ Visits
Total Day
Company 18+ Visits
Exposures/Vi
sit Total Exposure
Premiere Retail Networks (PRN) HDTV
127,552,877 0.5 61,535,226
Best Buy 32,136,859 0.7 22,961,442
Outcast/PumpTop/HCMN 22,883,180 1.5 33,668,310
Zoom Fitness 18,277,601 1.8 33,310,401
indoorDIRECT 16,571,970 0.9 14,596,469
GameStop TV 14,754,089 1.2 17,356,880
Source: Nielsen (4th Screen Report, November 2010) - modified to reflect HCMN/Outcast/PumpTop merger.
http://www.coadydiemar.com/html/mm_volume6_2011.html
RMG Fitness 10,467,244 1.5 15,857,875
TargetCast 10,264,337 5.1 52,308,475
The Hotel Networks 9,827,248 2.3 22,667,844
TouchTunes 7,368,487 13.9 102,072,577
Access 360-AMNTV 5,494,428 3.6 19,549,174
AMI 3,441,743 11.4 39,218,884
A few Key players – us/europe
Description Location
Venue / industry Screens Reach
RMG networks offers advertisers the ability to reach consumers using its portfolio of place-based digital networks
US In-Flight Entertainment, Fitness Entertainment, Point-of-Care, mtvU, Taxi and NYTimes.com
200,000 screens
60 million viewers every month
National CineMedia
largest digital in-theater network. 170 Designated Market Areas (DMAs) (49 of the top 50)
US Cinema 17,300 screens
650 million
Captivate Elevators and lobbies of large urban office buildings and
North Americ
largest in-office network in US. Nearly 1,000
8,900 screens
Reaches 3mil consumers. urban office buildings and
suburban office campuses. America
in US. Nearly 1,000 buildings in 15 of the top 20 major metro areas or Designated Market Area (DMAs)
screens consumers. 59 million advertising impressions per month
CBS Outdoor It is the third largest outdoor media owner in revenue terms.
US, Europe, UK
Transit – bus shelter, underground
Premier Retail Networks (PRN)
a network solution provider Retail 64,000 screens. 10,000 venues.
CNN Airport Network
satellite television network broadcasting general news, weather, stock market
Global Airports 48 airports
A few Key players – asia
Description Location Venue / industry Screens Reach
Bus Online China's No.1 in-bus digital mediawith revenue of $US45mil
China Transit - buses
Digital Media Group (DMG)
advertising solutions for subway systems in China.
China, Shanghai.
Transit - rail 4.3 million passengers in Shanghai.Expecting 9 million by 2013.
Air Media (AMCN)
operates the largest digital media network in China
China Airports. In-flight. 32 airports, inc the 15 (AMCN) media network in China
dedicated to air travel advertising
inc the 15 largest in China. 8 airlines, inc the 3rd largest
Focus Media (FMCN)
China's largest Digital Media Group
China office lift lobbies,shopping districts, and residential complexes
165,000 screens. 96 cities.
Vision China largest out-of-home advertising networks using real-time mobile digital television broadcasts
China Transit 60,000 screens. 17 cities.
26 million per month
Asia Media It operates the country's Largest Transit-TV Network.
Malaysia Transit – buses and trains
3,000 screens
Be Digital Subsidiary of Click Grafix, southeast Asian distributor for technology suppliers including Scala
Malaysia Restaurants. Links DOOH, SMS, Web
40 restaurants
What we can expect
in the next two yearsin the next two years
strengths
Despite the economic downturn, digital billboards
generated 6-10x more revenue per month than static
Equipment and infrastructure costs are falling
Consumers are spending more time out of the home Consumers are spending more time out of the home
than ever, twice more today than 30 years ago.
Interactivity is promoting longer dwell time.
TV is fragmenting decreased effectiveness of traditional
advertising and pushing clients to find new mediums
http://m.clickz.com/clickz/column/1717540/digital-out-home-landscape-
brief
weakenesses
No critical mass – TV’s tens of millions vs. DOOHs
thousands
Agencies are seeking methods to better plan and buy
DOOH more efficiently.
Capex for new new tech impacting profit margins and
sales teams too expensive to develop DOOH network.
Standardizing audience measurement to compete with
other media
opportunities
Audience segmentation (age and sex)
Image-recognition systems for targeting advertising.
Narrowcast networks eg for dental clinics.
“Pay-per-Look” where advertiser charged for the number
of eye-contacts with the screen.
New LEDs with black-base will improve image quality of
DOOH.
threats
Content bias towards video content giving TV /
broadcasters an edge.
Competition for other merging media remains stiff
(mobile and social).
Fragmentation will continue to disrupt revenue until
further consolidation occurs.
Industry life cycle
Gold rush 2003-08
Shakedown 2008-11
Breakout Post 2012
Downturn , mergers and acquisitions reduced competitors and increase screens.
Ruled by innovation. Competitors creating unique value.
70% of DOOH controlled by 10 networks. Further consolidation required.
http://11thscreen.com/2010/11/inside-look-at-dooh-forecast-via-pq-media/
Scale not value
“…a lot of M&A activity going on right now, both inside and
outside of our sector. Second, most of the perceived value of
these acquisitions still lies in the pursuit of scale, not synergy.”
“To date, companies like Zoom and RMG have gained scale by
purchasing smaller network operators (or just their assets) … purchasing smaller network operators (or just their assets) …
to allow them to sell onto a much larger number of screens.”
“These practices make DOOH more attractive to advertisers
who are accustomed to purchasing both reach and frequency in
very large numbers.”
http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/DOOH_Networks__Will_There_Be_Only_One_-781.html, Bill Gerba, DOOH Networks: Will There Be Only One?
Mergers, acquisitions, closures
42Media Group goes bankrupt
Access 360 Media purchase Arena Media
Ad-Dispatch acquires Volt Media
AdWalker goes bankrupt
Artexe SRL acquires Emmerrelogic SRL, becomes DOOH.IT
Avanti Screenmedia goes bankrupt
Bally Technologies acquires Coolsign's gaming division
ClearOne acquires NetStreams (and just received its NASDAQ delisting notification)
Core Technology merges with Studio 911
Muzak goes bankrupt
National CineMedia makes strategic investment in Danoo (now RMG Networks)
NCR acquires NetKey
NetKey acquires Webpavement
Pixman Nomadic Media goes bankrupt
PlayNetwork acquires Channel M
Primesight acquires Titan Outdoor's UK roadside business
Redbus Group acquire assets of Streetbroadcast
RMG Networks acquires Pharmacy TV
Screenred disappears (and presumably goes
Aug 2008. Good time to get bought.
Danoo acquires IdeaCast
Digiadvans acquires Mobile Eco Ads
Digital Poster AS goes bankrupt
EDR Media acquires The Golf Network, becomes Sports Retail Networks LLC
Fujitsu acquire global rights to TELentice (after bankruptcy)
JCDecaux acquires assets of Titan Outdoor UK
Kaleidovision acquires Music Concierge
Litelogic goes bankrupt
Medscreen goes bankrupt
Mermaid acquires Media Solutions AB
Millennial Media acquire TapMetrics
Minicom Digital Signage spins out from Minicom
Mood Media acquires Music Matic
Screenred disappears (and presumably goes bankrupt)
SMART acquires NextWindow
Sony acquires Convergent
TargetCast buys Ripple Networks
Touchtunes acquires Barfly
Verifone acquires Clear Channel Taxi Media
Vision Media Group goes bankrupt
Visser Digital Media acquires CampusLink and LevelVision College
WSJ/KPCB make strategic investment in TargetCast
Zoom Media & Marketing acquires Sports Display, ClubCom, GymTV, Allied Media's nightlife network and Wellness Health Education Network
http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/M_A_List__Digital_Signage_Mergers__Acquisitions_and_Bankruptcies-769.html
What we can learn
from othersfrom others
what we can learn from apple
There can surely be no larger or fragmented market than the
mobile industry. The carriers with all their self-interests at
stake kept the walls of their gardens high. It took Apple,
ironically with a closed operating system, to show the market a
way out of its deadlock on one of those fronts. What DOOH needs right now
In many ways, the App Store might be more valuable and
disruptive than the iPhone. The App Store transformed an
industry within 18 months – enabling over 100,000 apps to be
developed by November 2009 and over 3 billion downloads
worldwide by January 2010 (Source: Apple, Inc).
background
Neo Advertising convinced the three largest retailers to
“take the leap” into Digital Signage.
“As you know, these people are extremely difficult to
deal with and convincing them was not an easy task.
Now the market really sees the Neo Project as one of
Industry contacts essential.
Now the market really sees the Neo Project as one of
the key ways to institutionalise this media.”
Smr_01_08.pdf
Investment of capital in delivery.
Neo’s service offer
Developed an advertising network using plasma and
LCD screens, operating mostly in the retail,
supermarkets and hypermarkets.
Neo operates the largest network in the nation, in the
top 40 shopping malls. They also operate in pharmacies top 40 shopping malls. They also operate in pharmacies
and travel agencies.
Smr_01_08.pdf
Content extension
After two years of operations, the fact that only
“broadcast” content was available became frustrating
when planning campaigns.
“We were not getting some business because some
clients had no content for this medium, so we decided to clients had no content for this medium, so we decided to
create a service department to help clients make the
shift from traditional to digital signage.”
Started by creating light flash animations with 8 full
time staff working on content development.
Smr_01_08.pdf
Production fees are low
digital signage solution providers
Foot Print Asia URL
1. Cisco Au, Ch, HK, India, Indo, JP, KR, MY, PH, SG, TW, TH
http://www.cisco.com
2. EnQii China, Hong Kong http://www.enqii.com
3. Broadsign None http://www.broadsign.com
4. C-nario None http://www.c-nario.com
5. YCD None http://www.ycdmultimedia.com
Top 10 globally
These people are likely to buy you Most have offices in
US / Europe only
6. ScreenRed None http://www.screenred.com
7. Scala India, Japan http://www.scala.com/
8. Remotemedia None http://www.signagelive.com
9. TELentice No data No data
10.Stratacache None http://www.stratacache.com/
http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief
Published 2008
Why cisco and enQii
“Both are global operations. Cisco is so obviously global,
with operations in almost every country you care to
think of.”
“They also both offer a device / appliance rather than a
PC based solution. Whilst not the be all and end all of PC based solution. Whilst not the be all and end all of
reasons (we do have several PC based-signage solutions
in our top 10) we do think that devices / appliances are
a much better way forward for delivering signage
solutions.”
http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief
Why cisco and enQii
“We predict more and more of the larger installations in
2008 will be device based – there is also a growing
trend, especially amongst retailers, to choose device
based solutions (ease of management, small footprint,
‘greener’, etc.).”
“Another trend that we like is the Software as a Service
(SaaS) ASP model much trumpeted by Broadsign (and
others of course) who came in third in our top 10.”
http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief
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