What for, who and how use outdoor electronic screens in the world and in Russia?

Chief editor - Vladimir Krylov

To tell the truth, there is nothing extraordinary in them, as everything reasonable that exists in the world has already been invented and is used in the world. The other thing is that you forget about it in everyday life. Therefore we have decided to start with such a section in which we attempted to generalize and systematize the most popular types and purposes of the usage of electronic video screens.

Moreover, we live in a very particular moment, as it is highly concentrated:

  • The election to the Russian parliament (1999).
  • Electing the president (2000).
  • Celebration of the beginning of the new millennium.

We have divided the answers to the questions “What for, who and how will use electronic screens and signs in the world?” into the ways of usage of electronic screens.

1. Large electronic screens in outdoor advertizing

Approximately 60% of the electronic screens in the world are purchased for implementation of the effective legal financial circuits (schemes) by industrial and financial tycoons (Coca Cola, AT&T, ITT), middle and even small companies, plants or factories (for example, if the corporation has impressive annual turnover (and optionally big profit). Taking into account the fact that advertising expenses are included into the prime cost, the corporation creates an affiliated company and allocates funds to it (for example, lends it) firstly on acquisition of electronic screens and then route money to advertising to the same corporation.

Thus killing 2 birds with one stone: on the one hand, advertising themselves, and on the other hand, the ad money is included into the prime cost and consequently is deduced (removed) from the profit. The outdoor electronic screen simply pays off by a difference in taxes (i.e. if the money is not spend for advertising, all taxes will be necessarily paid from this sum as from the profit. If it will be spent on an electronic screen and these resources will be further routed on advertising actually to itself. During the first year these unpaid percents from the profit will simply pay back the costs of advertizing electronic screens, since the second year will bring additional profit on purely legal basis.

Then, the acquisition of an electronic screen in any case results in amplification of image and goodwill. In Russia such approach became popular very recently and is connected with the fact that it is possible for us to spend only 2% of the turn-over as the cost price for advertising, therefore if there is a company or a financial group with an annual turnover of more than 5 million dollars, it should be of great interest for them.

Besides, as the electronic screen is a full value carrier of broadcasting time like a TV channel or radio station, this affiliated firm can carry out information barter with various editions, radio stations and television channels. It will allow to build and to realize the valuable large scale information and advertising measures (including promotion of goods, services, and also political campaigns). This appears very important for a head corporation in Russia if much money for large scale advertising actions is required, but the company’s turnover is not so great (or the sum of the necessary costs on advertising policy exceeds 2% of the turn-over). Thanks to the informational barter possibilities of its affiliated firm, the company won’t spend “real” money from the profit (or will reduce these expenditures essentially).

This way has sub-direction connected with periods of the greatest instability of the financial markets (that are usually starting before important political events such as the elections). Russian and global financial cataclysms (for example, Asian share crisis, “Gazprom” share collapse on July 2-3, 1998, “black Thursday” of August 13, 1998) visually demonstrate constant redistribution in the field of finance and outflow of financial assets to people in power.

The problem of decrease of financial losses is especially important in such a period. One of the ways to do this is to invest into the informational and advertising systems on the basis of electronic screens and informational advertising activity. The cost of the given systems is close to those of the real estate’s, but unlike the latter, is not simply the way of saving money even during crises, but can also bring income.

2. Large outdoor screens: Authority and prestige

It is characteristic of Russia. If commercial structures buy the electronic screen for its own purposes, it indirectly spends the money on a screen for the city where the outdoor screen will be installed. First of all, an outdoor electronic screen is a new modern architectural discovery and a city pride, especially in provincial towns; secondly, it will be actively used during urban celebrations (the day of the city, folk feasts, national holidays), elections or before large scale national events.

In turn, businessmen receive access to the most favorable (commercially) resources of a concrete city or additional benefits and warranties to their business (and they really deserve it as they, actually, help their city). Thus businessmen return their money. But even if the corporation that installs an outdoor electronic screen does not receive side benefits from administration, the corporation increases its authority and prestige in the eyes of its partners and the citizens, who are actually their clients. And confidence and authority are very important especially during financial and political cataclysms.

3. Electronic screens and advertising agency: Outdoor screens network

Only one year ago the level of “know-how” of the systems allowed reasonable prices (less than 200 000 dollars) for outdoor advertising systems with video and broadcasting capabilities. Their amount was very insignificant not only in Russia, but also all around the world (the situation started to change very recently - after Olympic Games, and especially after World Football Championship).

But till this moment the outdoor electronic screens pay off and start being profitable in 2-3 years. There are examples of very fast and rather successful projects in the field of outdoor advertising, though there are few not so successful ones. Besides, any advertising agency needs from 6 months to 1.5 years to master its skills in this business and to build up a reputation for itself.

This way becomes the shortest and the most effective one if the outdoor electronic screen network is located in one city or in different cities and even states. In this case the number of advertisers essentially increases due to the wider advertising scope of the audience.

The prospects of this way are the following:

  1. Each city actually acquires an enterprise with a certain commodity for export (i.e. advertising time). Taking into account the fact that each year Russia manages to attract more and more Western resources to its ad market (there appear more and more goods of different corporations working in all spheres), each city and the commercial structures participating in implementation of this project will receive real Western money for real “goods” - advertising time.
  2. Confluence of several events of national value (elections to the Parliament, electing the governor and mayor of the city, electing the president, celebration of the new century and new millennium) have always been characterized by large scale advertising activity (also in financial meaning), therefore the moment is more than favorable now. It is very important for the 2-nd and 3-rd way to be the first in your city because there are very few places in any city (3-5) that are favorable both politically and technically. These places will make you the city monopolist in the field.

4. Electronic screens in sport and show business

The customers are the owners of sports clubs, stadiums and shows, but it is a separate world (though the inquiries on electronic screens are very large, but mostly with rent schedule). The recoupment of such projects is generally provided due to the spectators on matches or concerts. But there is also a completely new direction that is the usage of a mobile screen.

No license is needed for such outdoor screens, for example, in Moscow, since this advertising adheres to “advertising on the transport” category and is much easier in design. Besides, the same electronic screens can be also used for outdoor advertising or advertising actions – notice, legally.

5. Electronic screens and social policy

It has never been used in Russia yet, only once the Liberal Democrats bought 50% of all broadcasting time on 2 outdoor screens in Moscow (that were the only ones those days) before the elections. It is widely applied in the world. For example, during the elections in America for the support of Clinton’s campaign. A number of outdoor screens was installed and widely used in several cities. They were also used in Poland during the visit of the Pope, in Japan during the winter Olympic Games, in France during the World Football Championship in stadiums, squares and even near restaurants and cafes.

The practice shows that the most expedient thing (both financially and politically and also for long term relations) is to use complex solutions joining several ways simultaneously. Since the first and second ways guarantee total recoupment, they allow making the third, fourth and fifth way really professional, and profitable.

The investments into your own “Outdoor Video” and “Outdoor TV” channel in given political and economic moment (allocating outdoor electronic screens in “key” places, or using them as mobile systems) would be very strong from commercial and advertising points of view due to:

  • The limited number of “key” places in each city.
  • Relative freedom in this niche of the market.
  • The possibilities to use the newest know-how and solutions in this technology.
  • The forthcoming key events of political and universal value.