TV networks selling out-of-home advertising space

Advertising Age reports that “in recent months, the three oldest [networks] — Walt Disney’s ABC, General Electric’s NBC Universal and CBS Corp.’s flagship operation — have set up ventures to place ads on screens that consumers might watch as they fill up at the gas station, hunt for produce in the supermarket or shop at the mall.”

The article states that the outlets are used to both promote shows and sell traditional TV advertising. I can see the logic – traditional TV revenues are being hit as both media and TV channel fragmentation take effect, so networks should widen their distribution – but I can’t help thinking that this isn’t the right place to be concentrating resources (the article quotes an analyst as saying “At most this could be 2% to 4% of their base business”)

Online video is the area of growth. With so many questions over the best way to approach it, I believe this is where attention to be focused. It “may not hurt” to work on incremental revenues in different areas, but wasn’t that the rationale in the AOL Time Warner merger?

A few issues I see this venture facing

  • Metrics for measuring outdoor impacts will have to be different to measuring TV, restricting the ability for the two sales teams to coordinate and cost save
  • TV companies may be able to buy small out-of-home specialists, but surely the expertise and knowledge lies with the Viacoms and JC Decauxs of the world?
  • The TV networks’ core proposition is mass engagement. They will need new advertisers or new arguments to convince companies to invest in incremental, targeted eyeballs
  • Will the diversification damage the core brand?
  • If one of the benefits is the promote the network shows, would they not be better off just buying the advertising space?

The venture may well succeed. I can see many benefits of showing additional TV content – whether “podbusters”, made-for-broadband content or behind the scenes extras – to captive audiences, such as those in a gym or on a train or airplane.

But I’m not convinced that this is the best method to overcome fragmentation for TV networks.

sk

Image credit: http://www.flickr.com/photos/dmealiffe/

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