Hyatt Regency Century City

Los Angeles, California

December 9 – 11, 2009

ILM:09

Monetizing the Local Opportunity

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Sonya Rosa, Practice Lead, DOOH, Interpublic Emerging Media Lab

Stephen Randall, CEO, LocaModa

Adam Bleibtreu, CEO, Retail Media Co.

Digital Out of Home

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Digital Out Of Home Trends

Rick Ducey

Chief Strategy Officer

BIA/Kelsey

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DOOH Overview

� There are more than 2,100 outdoor advertising operations in the United States.

– The out-of-home advertising industry is heavily concentrated with just three firms earning 85 percent of traditional billboard revenues.

– Billboards account for 66 percent of all OOH revenues.

– Remaining 15 percent of the market is highly fragmented.

– Newer digital out-of-home (DOOH) segment has more types of companies and is much less concentrated and faster growing than the OOH segment.

Sources: Outdoor Advertising Association of America (2009). Piper Jaffray (2008)

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Overview (cont’d)

� In the United States, a total of $6.99 billion in OOH 2008 revenues comprises:

– 73 percent local ads

– 18 percent national ads

– 9 percent public service ads

� OOH is relatively easy to plan and buy since it is so concentrated. Even so, the extensive types of inventory can be confusing. OOH measurement has been a sore point, but there are new and helpful developments.

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Overview (cont’d)

� DOOH, on the other hand, is complicated to plan and buy — the ecosystem is still emerging but the rise of aggregators has facilitated the process. DOOH must get easier to plan, buy and measure in order to reach scale.

� DOOH by some measures is growing faster than Internet advertising.

� Recent research underscores the effectiveness of DOOH both as a stand-alone advertising platform and in combination with other platforms, particularly mobile.

� DOOH has become another “overnight success,” even though some firms have been around for 10+ years.

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OOH, DOOH U.S. Revenue Forecast 2009-

2013

Source: BIA/Kelsey (2009)

DOOH revenues will increase at a compound annual growth rate of

13.5% vs. 1.4% CAGR for OOH from 2009 to 2013.

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What Is Digital Out of Home (DOOH)?

•OAAA defines digital billboards and

digital networks as follows:

�Digital billboards are static

roadside displays that rotate

advertising messages every eight to

10 seconds.

�Place-based digital networks are

often indoors and positioned in

commercial areas where groups of

people congregate. Place-based

digital networks carry both video

content and static advertisements.

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DOOH Ecosystem

� There are lots of different

players in the unconsolidated,

growing DOOH segment.

� Planning, buying and

measurement tools are

sophisticated.

� Providers are competing for

dominance and de facto market

standards.

� Vendors are starting to provide

solutions to leverage existing

digital workflows used for other

media.

The DOOH ecosystem has lots of

parts, which need to be better

integrated to really drive strong

growth.

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Putting Together a DOOH ‘Buy’

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DOOH and Mobile: Going Cross-Platform

DOOH can motivate users to text responses as call to action. More than half (53%) of adult texters say they are “likely” to text a response to a

compelling DOOH message.*

*Source: OTX/SeeSaw Networks (July 2007)

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Conclusions

� DOOH is fast growing, leveraging spending trends toward digital media, hyperlocal, personalization and engagement metrics.

� The DOOH space is still young, fragmented and complicated to buy. However, with consolidation, partnerships and interoperable platforms, we see the buying process becoming more integrated, which will spur growth.

� There will be continued M&A activity in the DOOH space with acquirers seeking targets allowing them to roll up vertical networks, which are easier to sell together.

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Conclusions (cont’d)

� VCs which backed Reach Media Group, and operators like National CineMedia may look for other opportunities to aggregate DOOH networks for critical mass to drive sales growth.

� We will see more technology integration in DOOH-mobile platforms, which will serve as another revenue driver for integrated marketing campaigns.

� OOH players will increase their DOOH portfolios.

� DOOH will become increasingly personalized.

� While OOH facing “highway beautification” policy issues, security and privacy may be the policy challenges ahead for DOOH.