It’s a peak time for reaching commuters Maria Nguyen
Rising population levels and gridlocked roads in Australia’s major cities, along with an erratic public transport system, spells major headaches for the nine million commuters who struggle to and from work each week.
But while waiting for a bus or train that’s 20 minutes late might be a stressful, pain-in-the-arse reality for many Australians, it’s actually not such bad news for parts of the media and advertising industry, which has access to a bored and captive audience of mainly white-collar workers facing longer waiting times and longer travel distances as Australia’s urban sprawl shows no signs of abating, especially as interest rate rises push workers further away from the nation’s big city centres.
In fact, according to the Australia Institute, the average commute time for full-time workers in the metro cities is now four hours and four mins per week.
In 2007, the out-of-home (OOH) advertising industry grew net revenue by 12.3% to $428m, representing a return to double-digit growth and a fifth consecutive year of growth for the medium.
However, it still hovers just below 4% of total advertising share.
OOH’s broadly defined street furniture sector – dominated by Adshel, JC Decaux, and Eye Corp – has been leading the growth charge for the past five years with its bus and tram shelter sites, rail concourse and platform ads, airport ads, phone booths ads, and other options.
Five years of ooh growth
Street furniture clocked up $166m in revenue in 2007 and was followed by large-format billboards with $144m (dominated by APN Outdoor and Eye Drive); transit ads with $91m (APN Outdoor) and the fourth category of smaller billboard posters, which generated $29m (APN Outdoor).
While the major media owners didn’t want to disclose revenue figures, they all claimed their business enjoyed year-on-year growth. Eye Corp, for example, said its revenue grew 15% year-on-year.
According to the Helen Willoughby, chief executive of the Outdoor Media Association, growth in OOH has been the result of new technology, new formats and more inventory. “Digital technology, such as Bluetooth, keeps the medium fresh, as do new formats,” Willoughby says.
And it’s not just the out-of-home sector that’s been ploughing new furrows to cash in on the growing commuter audience. Print media – and in particular News Limited’s free daily mX – is also stepping up to the plate. mX launched a Brisbane version in March following the success of the Melbourne and Sydney papers and boasts a readership of more than 736,000.
According to mX national advertising director, Tamara Oppen, these readers are the “typically hard to get 18 to 39-year-old urban dwellers” who are always on the go – more than half (54%) are white collar workers and affluent professionals and managers, with a fairly even male-female split.
Oppen says mX’s revenues have grown 50% Y-O-Y, while “FY07 versus FY08 growth trends are in line with online revenue trends”.
Oppen explains the paper’s success is connecting with commuters: “Every afternoon it’s a 15-20 minute window of absolute absorption in the content-rich pages of mX … This is something outdoor media simply does not offer – outdoor is not a content medium. You don’t spend 15 minutes engaging with a poster or billboard.”
James Sneddon, senior communications strategist at Universal McCann, says advertisers are becoming more aware of mX’s potential and starting to deliver even more innovative solutions that engage commuters. Its strength, Sneddon explains, lies in its distribution and the paper’s pass-on rate. He also notes that other commuter publications, such as City Weekly and 9 to 5 magazine, are “less up to date and tend to be editorially light so they tend to be less relevant to the average commuter”.
Adds Sneddon: “If, however, as was the case in London, other news organisations develop a rival title, it will be interesting to see how loyal readers ultimately prove to the mX brand.”
For the time being at least, it seems News Ltd could retain its commuter paper dominance, given Fairfax’s retreat from the market back in 2001, when it launched Melbourne Express just weeks before mX, only to concede defeat and axe its foray into commuter papers after only six months.
What Fragmentation?
Willoughby claims OOH is a strong medium that hasn’t been affected by the F word – fragmentation.
“In the home, consumers have so much choice – TV, the internet, PlayStation and they can switch off and fragment,” Willoughby adds.
“It’s important for advertisers to understand the increasing amount of time people spend outside the home passing all sorts of OOH products. They’re also commuting longer distances and attending outdoor events a lot more.”
Richard Herring, chief executive of APN Outdoor, agrees that while the traditional media world is fragmenting, the audience for OOH is actually increasing.
“There are delays with transport, people are waiting longer and travelling further – there’s no fragmentation with the OOH audience, and this is a very strong counter argument to most traditional media that are becoming less ‘mass’, while OOH is truly becoming more of a mass media that can satisfy virtually all demographic requirements,” Herring says.
“More than 90% of commuters are exposed to OOH advertising everyday on a regular basis, so it has a very high reach potential.”
Understanding the mindset
Herring joins with Anthony Xydis, marketing director for Adshel Australia and New Zealand, in saying their respective consumer insight studies show that commuters are open to being entertained and communicated to.
“They want to be relieved from the boredom and challenges of getting to and from work,” Xydis says, explaining that Adshel’s three-year commuter study was important in understanding how advertisers could communicate with them based on their work-bound versus home-bound mindsets.
According to the studies, work-bound commuters have to stay focussed because they need to get to work on time and are hostage to timetables, offering advertisers the opportunity to communicate new products and experiences. Although, once inside the train, tram or bus, many would daydream, catch up on some sleep and tended to stay more in their own world by reading the paper, listening to music or making telephone calls. For those commuting by car, 98% listen to the radio, and many would stop off for petrol or coffee.
According to Xydis, home-bound is a rich area for advertisers as people are heading back to the nest – they’re thinking about what to have for dinner, what’s on telly that night and catching up with friends or heading to the gym.
“There’s this anticipation of having time to relax and with a greater focus on personal and social matters. And food and wine brands and ads for entertainment, such as TV shows and movies, work well for the home-bound,” Xydis adds.
Herring says APN Outdoor’s Ozone study also found that commuters welcomed entertaining distractions.
“Our study countered the perception or generalisation that OOH was a nuisance. In fact, commuters see OOH ads as a welcome distraction,” Herring explains.
“It makes a huge impact but not in a negative way because there’s no interruption so commuters are quite receptive to it and it reinforces the fact that outdoor is not a passive medium.”
Mike Tyquin, CEO of Eye Media Australia and New Zealand, also extols the reach and impact of OOH compared to other media. “People spend greater time out of the home these days and broadcast television audiences are declining so advertisers must engage consumers out and about and close to point-of-purchase,” Tyquin says.
“Given the fact that commuters simply can’t miss big billboards, large-format roadside advertising provides a most welcome distraction allowing this medium of advertising to be consumed differently to other forms of advertising media.”
For Eye Media’s large billboard solution, Eye Drive, the “unique proposition” for advertisers, Tyquin adds, is that commuters “travel the same route each day allowing for delivery of frequency of message via OOH”.
is frequency card overplayed?
Reach and frequency are the two major measurement selling points for the OOH medium, but it’s not all just about the “hits”, according to some media strategists.
Universal McCann’s Sneddon describes the situation as “farcical”.
“OOH says it has such high reach and frequency compared to other media, but it’s farcical because when you do reach those numbers, the exposure consumers have is so fleeting that you can’t really compare to other media,” Sneddon says.
“In Australia, measurement tends to be very frequency heavy, but when we develop our media strategy, we have to scale down our OOH impact because the reach and frequency figures don’t tell the full story.”
Sneddon also believes that while advertisers are able to buy a lot of space that “hits” consumers as they commute, further investment needs to be made into product quality and more digital formats “to ensure that advertisers truly engage consumers”.
Australia, he says, is lagging behind Europe, Asia and the US in the outdoor advertising space – especially when it comes to digital technology that can deliver not only interactive entertainment and distraction for commuters who are bored, stressed and detached as they travel to and from work or school, but also day-parting solutions, where multiple creative executions can be instantly and remotely rotated on a billboard or panel throughout the day.
According to Charles Parry-Okeden, co-founder and director of Executive Channel, this lack of investment in digital OOH innovation and formats has been the side effect of an industry “fixated” by the MOVE audience measurement system.
“I’m big supporter of MOVE but I think, as an industry, we’ve been fixated on it at the expense of investment in developing and deploying new technology in the outdoor space,” says Park-Okeden, who was the former director of sales and marketing at Buspak before it merged with APN under the APN Outdoor brand.
“It’s being seen as the holy grail by media owners … but they are too focused on it. Digital is what will fundamentally change the OOH product, turning it from a passive, static medium into an active, engagement medium that is far more compelling. We’re behind the rest of world in respect to technology and I don’t think anyone can argue with that – you just have to look at how advanced the UK, US and Japan are.”
Great expectations
However, Australia’s lag can be understood given the number of Australian commuters, as a reflection of our population, pales in comparison to the sheer numbers in Europe, the US and Japan.
But, there’s no denying the growing advertising opportunities OOH presents in reaching Australian commuters – and if increasing public transport delays and traffic snarls are anything to go by, commuters are becoming, literally, a captive audience.
Such gridlock may be great for advertisers and OOH media owners, but even Matt Chapman, managing partner of Total Advertising & Communications, feels sorry for travellers.
“Unfortunately for commuters, a great opportunity exists for advertisers and this will continue to grow given the increased population and clutter in the major cities,” Chapman says. “Perth, for example, as a boom market, now has a 50km suburban stretch north to south to it’s CBD with suburbs appearing at a rapid rate.
“I’m sure, also, that a large percentage of your readers are faced with the daily use of those appalling Sydney ‘car parks’, otherwise known as the M4, M2 and so on, while most state governments are also pushing commuters to public transport.”
Add to all that the launch of the $5m MOVE audience measurement system in the second half of this year, and it’s not hard to see why OOH media owners are expecting further growth.
