Opportunities Current and Future with Digital Advertising

News has been emanating out of Zurich (Ramistrasse to be exact) that Strategic Capital Partners Portfolio Management AG, has been approached to be a placement agent for an up and coming digital advertising company.Read on…..There is a growing feeling in the advertising world that companies and brands that fail to dig into digital media network advertising and learn how to take full advantage of it will be left behind. This attitude (and the dangerous reality behind it) is the engine that will power the digital advertising network industry for decades to come.Consequently, providers of the products and services necessary to tap into the rewards of digital networks can expect a brisk demand. And because digital display advertising networks are still in their infancy in terms of potential market penetration, that demand is not expected to diminish anytime in the foreseeable future. Indeed, it will grow.Of all the components of the out-of-home digital network puzzle (displays, content creation, content management and computer-routing systems) content management is the piece which promises the most opportunity for innovation and consequent financial rewards. Activity by major international technology players to invent and improve digital display technology, digital content creation packages and computer-routing systems has been robust for decades, largely because of their tie-ins with the computer industry.However, now that these innovations have been appropriated for use with out-of-home digital advertising networks, the need for systems to manage these networks has heated up. This demand for management systems is relatively much newer than the demand for the other components of digital advertising networks. Consequently, it has been the weak link in the overall system.“Currently, dissemination of advertising content is limited to old-style technology, requiring significant manpower and lacking both appeal and flexibility,” explained a spokesperson for the 1-2-1 VIEW™ Corporation. “Moreover, due to the limitations imposed by these problems, it has been limited to certain target markets involving massive numbers of people, like transportation stations and public areas in a few large shopping malls. Software tools with the ability to change or update content have previously been viewed as out of reach or too expensive and labor-intensive.”This situation is changingProducts like those developed by 1-2-1 VIEW™ are resolving limitations of this kind with content management systems that give advertisers immediate access to target demographics, along with complete flexibility of content, timing, responsiveness to and interactivity with the target audience, and instant, accurate viewership measurements. Operated through remote management and monitoring technology, the 1-2-1 VIEW™ system permits remote management and performance monitoring, updated in real time. The system’s accurate tracking functionality make quick adjustments to programming schedules possible. Operations are facilitated through central administration, which obtains the files to be played from the storage computer and schedules them to be shown at the local zone or zones selected by the advertiser. The central server pushes the scheduled content to the distribution zones. The servers at the local zones then play the files when any terminals send requests to the server in the scheduled hour.The benefits of this type of system are obvious: dynamic updates and localized message delivery by segment, time of day and location; complete control by advertisers and operators of ad rotation, location, time of day and frequency; the ability to adjust campaigns instantly from central operations or remote locations; accurate and real-time tracking of viewership, with results securely viewable over the web by advertisers; optional interactive features giving interested viewers a chance to receive additional follow-up information or purchase incentives; and relatively low up-front technology costs with the ability to scale up quickly due to the Internet-based delivery mechanism.The total control, programming flexibility and interactivity offered by emerging content management systems can make today’s digital out-of-home advertising networks highly effective. Campaign results can be tracked in real time. Media play-out statistics can be collated and analyzed based on various categories to ensure full accountability and facilitate accurate billing.Clearly, the world of out-of-home digital advertising networks is rapidly expanding, generating opportunities that are open-ended.Profitable Channels claims that new digital media, including out-of-home digital advertising networks, is the fastest-growing slice of the marketing and communications pie. The firm points to the Veronis, Suhler, and Stevenson 2006 Communications Industry Report, which forecasts a growth rate of 20 percent per year for new digital media.Profitable Channels also notes that Veronis, Suhler, and Stevenson, along with several other industry sources, have forecast that “within five years, marketers will shift as much as USD 40 billion of traditional media spending from traditional advertising media to new media.”The opportunities in out-of-home digital advertising networks are not only open-ended in nature, they are international in scope.Asia, for example, is and will continue to be a fertile field for growth in the industry. Population growth there is strong. Plus, the public has fallen in love with electronic communications and has a high level of technical literacy. The demand for instant, leading-edge communications in all sectors of Asian consumers’ lives is robust.China, in particular, continues to offer growing opportunities for digital signage deployment. Outdoor media there is used effectively to advertise high-end products, particularly in the country’s increasingly fragmented advertising environment. Billboards and digital displays in public transportation systems are now the most sought after of the major media platforms in Mainland China.All other media in China, in fact, have suffered a steady decline in growth, while outdoor advertising has achieved remarkable growth rates over the past several years. The rising income levels of higher-end Chinese consumers is expected to continue to pull them away from their televisions to other forms of entertainment. The circulation of magazines and newspapers (except for the local daily publications) is declining. In contrast, China’s outdoor advertising market is attracting more and more advertising dollars as companies search for new methods to target the right customers. Advertising media such as out-of-home digital networks are therefore becoming increasingly attractive – even necessary – in modern China.China is certainly not alone in its growing dependence on digital network marketing. PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2006-2010 report pointed out that EMEA is the largest out-of-home market, which includes digital advertising networks. The report indicated that the area’s 2005 total of USD 7.8 billion is expected to grow to USD 11.2 billion in 2010 at a 7.4 percent compound annual growth rate. Increases averaging 8.3 percent compounded annually are projected for the United States and Latin America. Canada will grow at a 6.6 percent compound annual rate and Asia Pacific will grow by 5.8 percent annually, said the report.While these figures are healthy, it is important to note that the digital network sector of the out-of-home market is predicted to enjoy significantly higher growth rates than those forecast for the overall out-of-home market.An Obvious ConclusionInvesting in communications stocks and mutual funds is one of the real growth opportunities not only in the Asian stock market, but in other capital markets worldwide. Some of the most dramatic growth curves for new companies around the globe have been, are being, and will continue to be posted by communications companies. Providing out-of-home digital advertising networks is one of the freshest and most promising opportunities for growth within this broad sector.The track record of the out-of-home digital advertising network industry is compelling. Its future is promising. Businesses that fail to take advantage of the power of digital advertising networks will find themselves at a distinct disadvantage compared to those that do.The verdict is clear: Well-managed companies that offer effective, innovative products and services to support this still-young industry can expect unbounded future opportunities.