an interesting read......, page-2

Excellent reading I had to paste it
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Credits go to adrianb on ozestock for finding this one:

For Outdoor Advertising, Size Really Does Matter

Media Week

Outdoor's value has been a well kept secret among advertisers who, since 1993, have steadily pushed revenue higher. But now the secret's out and radio wants in.

Radio companies have been buying, and merging with, outdoor companies at full speed for the past two years. The trend started with Infinity (before it merged with CBS), which bought Transportation Displays Inc. in 1996, followed by Clear Channel's purchase of Eller Media and Universal Outdoor in 1997. Then AMFM (as Chancellor Media) picked up Martin Media and Whiteco, to create Chancellor Outdoor. Last May CBS strengthened its outdoor presence by purchasing top ranked Outdoor Systems in a deal valued at $8.3 billion, while AMFM sold its outdoor company to Lamar Advertising, retaining a 30 percent interest. Today, the top four outdoor companies, Outdoor Systems, Eller Media, Lamar Advertising/Chancellor Outdoor and TDI are either owned by or have alliances with radio companies and command more than half (53 percent) of the total outdoor revenue.

How the radio companies plan to exploit these holdings remains to be seen. So far, the synergy between the two media is largely untapped, and sales forces remain separate. CBS, which hasn't closed on its acquisition of Outdoor Systems, has struck a few cross-media deals with companies such as Penzoil and Fidelity Investments, but those deals are the exception rather than the rule. "They're at the 'let's buy it and then figure out what to do with it' stage. "It just hasn't happened yet," says Diane Cimine, executive vice president of the Outdoor Advertising Association of America. Ultimately, she says, "it can be a great one-two punch to reach consumers out of home and on the go. You see it, you hear it."

But the reason for radio's buying spree is obvious. Since 1993, outdoor ad revenue has steadily increased by high single digits; 1999 and 2000 are expected to follow the trend. Last year, outdoor posted a healthy 9 percent gain to $2.3 billion, according to the OAAA. Through May, outdoor advertising was up a healthy 7.5 percent, with 1999 revenue forecasted to gain more than 8 percent and 2000 to increase by more than 9 percent to $2.75 billion. By 2002, Veronis, Subler & Associates estimates outdoor will bring in $3.2 billion in revenue.

Synergies between outdoor and radio aside, outdoor advertising is increasingly good business. The industry has finally overcome its reputation for "booze and butts." In 1979, tobacco advertising was 39 percent of revenue and alcohol was 19 percent. That's dwindled to 11 percent for tobacco and 2 percent for alcohol. "Now it's everything else but those categories," says Cimine. "The whole face of outdoor has changed dramatically."

Big users of outdoor run the gamut from local services and amusements, to public transportation, to hotels and resorts, with retailers each contributing about 10 percent of ad dollars. One of the fastest growing categories is movie studios, videos and video stores, broadcast networks, newspapers, and radio stations which accounts for about 8 percent of the revenue. Radio has increased its outdoor spending by more than 25 percent this year.

More and more, fashion is dressing up outdoors. Gap, Calvin Klein, Ralph Lauren and DKNY dot major-market skylines, and some pay upwards of $100,000 monthly for ads in Times Square and along Los Angeles' Sunset Boulevard, reports Horizon Media.

Like other media, outdoor has also benefited from the Internet and dot.com related businesses, with companies such as Amazon.com, Excite, and mothernature.com using outdoor to brand their names and drive traffic to their Web sites. "It's shaping up to be our second largest advertising category," notes Jodi Yegelwel, executive vice president of mar­keting for transit ad powerhouse TDI.

With demand for outdoor space on the rise, outdoor companies are pushing up rates. "There is a great opportunity to make rates comparable to other media outlets," says Cimine. But, "it hasn't happened yet. It's still a fabulous buy." In the millennium year, there will be added pressure on outdoor rates from political advertising and the Olympics, she says.

Even though outdoor is only a tiny 2 per­cent of overall ad spending, its effect is growing, particularly in one-of-a-kind locations such as Times Square and Sunset Boulevard, where exposure is impossible to calculate. Signs there can pop up on the news, in movies and in magazines, and that doesn't even take into consideration the millions who walk through the areas weekly. "We can't even ten an advertiser how many impressions they are getting," says Brian Turner, president of Sherwood Outdoor, which sells 60 site "spec­taculars" at One and Two Times Square and 1600 Broadway, making it the 12th largest out­door company in terms of revenue.

A wide range of advertisers Coca Cola, General Motors' Cadillac division, Samsung, Prudential, NBC, Budweiser, New York State Lottery, even The New York Times pay six-figure monthly rates to hold space for 10 years, a far cry from the days when the signs used to turn over every six months. Times Square is so much in demand that Inter City is building a 50 story hotel and 300­foot tower at Broadway and 47th Street that, when completed in November, will accommo­date a total of 75,000 square feet of outdoor advertising. "[The tower] is the largest struc­ture ever built exclusively for advertising," says Bob Nyland, president of Inter City Pre­miere advertisers include American Express, Apple, AT&T, HBO, Hachette Filipacchi, Levi's, Morgan Stanley, Nokia and the U.S. Postal Service.

And to make sure they stand out in the crowd, these ads are not your father's bill­boards. "We are morphing our products," says TDI's Yegelwel. In Chicago, TDI wrapped a two car, 96 foot long commuter train with Washington Mutual's ad message. And no space is left uncovered. In New York's World Trade Center, TDI helped Dodge take over every possible space of the rail station ­floors, walls, posters, banners, escalators ­to create a single exhibit.

"We've had requests for moving, smoking and smelling boards," says Pat Punch, who is a co-owner of Minneapolis-based Atomic Props, a company that specializes in unique spectaculars.

For Poland Springs, Atomic Props created a 30 foot water bottle. Jell-O in Times Square serves up a giant spoon with 4,000 smaller spoons. In Minneapolis, home base for Target, people look forward to a new three dimensional billboard object every month, such as Old Faithful, complete with spray every 10 min­utes, which symbolizes Target's donation to the nation's parks. Minneapolis retailer Dayton-Hudson once had three dimensional boxes of candy that emanated a mint scent. Says Punch: "Over the last 10 years, our business has tripled as people see the possibilities."