Outdoor LED screen business: A network of success

Thomas Pukas

In this issue we offer you an article by Thomas Pukas, director of Lithuanian company “Actual City Media” that owns a network of outdoor LED screens. The article is extremely useful and informative, especially in respect to tendencies in current advertising video market. The article is reprinted here with the kind permission from the author.

The use of digital outdoor LED screens signifies a brand new stage of development in the area of outdoor advertising. A network of outdoor LED screens could hardly be called a novelty. But naming it as a traditional means of advertising would still be too early. Outdoor LED screens should better be treated as an alternative to the usual static outdoor advertising with certain strategically strong advantages.

In any case, the use of outdoor LED screens signifies a brand new stage of development in the area of outdoor advertising. A number of articles have already discussed the strengths of presenting information on LED (Light Emitting Diode) screens versus the static outdoor stands. It is not worthwhile repeating, therefore, by this overview and based on a successful example of Lithuania, one of the European countries, we will aim to introduce certain solutions that are highly important for the development of the network of outdoor LED screens.

Success of outdoor LED screen business in a small European country

Although outdoor LED screens encounter certain challenges when trying to establish themselves in certain places, this is a common thread for all branches of the outdoor advertising industry. LED technology as a result of its efficiency is becoming more and more recognized and significant. One of the best examples of successful development of outdoor LED screen networks could be a network of outdoor LED screens operated by a Lithuanian company “Actual City Media” (ACM) in five major cities of Lithuania. ACM has successfully grown into a network of ten screens within the period of four years.

The company is not planning on stopping anytime soon, since by the end of this year it is planning to install eight new LED screens. This factor distinguishes the company out of other owners of outdoor video screen networks operating in substantially larger European countries but limiting their scope of activities to only four or five outdoor LED screens. In Lithuania, special attention is given to the installation of such screens at strategic placements and promising places. To this end, there is close cooperation with research agencies which help us identify the places that are most frequently situated near large shopping centers or bustling crossroads and attract the heaviest flows of traffic and people. It is estimated that the flow of people passing within the visibility zone of the outdoor LED screens amounts to approximately four million people per week. Taking into consideration the fact that the population of this country is almost 3.7 million, the abovementioned figure is really very impressive.

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Advertising outdoor LED screens by “Actual City Media”

The value of planning

According to Tomas Pukas, Director of ACM, one of the reasons for such a quick and successful introduction of networked outdoor LED screens in Lithuania, if compared with other neighboring countries, is that both the right selection of places for the installation of the screens and the appropriate management strategy oriented toward the customer's goals. “A pivotal role in the advertising business is played by the efficient distribution of the broadcasting time within the selected media channel. For this purpose we constantly conduct research in order to determine the intensity of the traffic flows depending on the time of the day. With that, we have identified distinctly different types of traffic flows near each of the outdoor LED screens, which helps us offer our customers the most efficient layout of the broadcasting time”, said Pukas.

The duration of video ads most frequently broadcast over the outdoor LED screens ranges between 10-15 seconds. The video ads are usually repeated every one to two minutes. This duration is sufficient for the presentation of brief information. The periodical repetition of video ads contributes to both better memorizing of the information and attracting of a wider audience. Although approximately 90% of video ads are specially created for the advertising on outdoor LED screens, the advertising material designed for television can also be easily adapted for this purpose as well. Still, it is necessary to take into account the fact that the information for advertising on outdoor LED screens must be brief and clear and use large images/pictures and fonts for the text. Otherwise, the broadcasting of a video ad may become absolutely inefficient.

The customers of ACM may also profit from Post Campaign research conducted by ACM as part of the agreed fee. “The analysis of research results can help customers develop a more precise and efficient plan for the next advertising campaign. It becomes much easier for them to decide on the frequency of broadcasting, the cities and the duration of the video ad. This helps achieve better results and save on any redundant broadcasting,” said Pukas. The video ads are broadcast on the ACM outdoor LED screen 18 hours per day from 6:00 am till midnight.

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Ads on outdoor LED screens by “Actual City Media”

The broadcasting is not limited to advertising

The largest part, approximately 70%, of video messages broadcast in Lithuania consists of video ads. In addition to this, the information such as the news, announcements of events, weather forecasts, which are important to the general public, are also constantly broadcast on the outdoor LED screens.

According to Pukas, the broadcasting of the information helps in retaining high ratings of accessibility for the advertisements broadcast on outdoor LED screens. “People do not treat our screens as they would the typical means of outdoor advertising, they know that by looking at the screen they will also find out about events, the weather forecasts for the following day, etc. It means that they naturally prefer the outdoor LED screen to the static outdoor stand,” said Pukas. He maintained that while standing at the intersection and waiting for the green light the drivers watch the LED screens in the same manner as they watch television. “For those drivers and passengers who are forced to wait in traffic jams the outdoor LED screens are a form of entertainment. Instead of looking at nearby cars they can watch the information broadcast on the screens,” Pukas observed.

Ad recall is governed by a number of factors

The expertise of research agencies was used in order to find the efficiency of this means of advertising. The respondents were shown certain video ads from the advertising campaigns on a computer screen and later asked whether they had seen such advertisements on outdoor LED screens installed in their city. The results of the research showed that the efficiency of the advertising in major cities of Lithuania, where outdoor LED screens are installed, ranges between approximately 23% and 64%.

According to Pukas, the recollection of advertising campaigns depends on the specific character of the information. The research results show that the observation of support campaigns is several percent higher than the observation of image campaigns. Potential consumers are more likely to notice and memorize promotional sales campaigns since they are typically attracted by discounts and gifts being offered in the campaigns. Beyond that, men and women recall different campaigns. And to take it one level deeper, different campaigns are also recalled by the representatives of different age groups.

The experts say that such differences can be explained by specific products and services advertised during the campaigns. “Each advertising campaign has its target audience; therefore, it is quite natural that it reaches only a certain group of people. For example, the advertising of the Internet on the ACM outdoor LED screens was more noticed by men of up to 39 years of age, while the advertising of a medicine against diarrhea - by elderly women,” said Pukas. The results of reach ability research showed that the use of other media means during the advertising campaign, the magnetism of the offer, the reputation of the brand, the quality of the video ads and other factors also leave a certain impact on people.

Forecasts for growth

The data from the research regarding the volume of advertising broadcast on the outdoor LED screens showed that during the previous year as compared with the year 2004, the number of advertising seconds sold within the blocks of advertisements broadcast on the outdoor LED screens had doubled an increase of 90%. This year, the company forecasts that the number of orders for advertising will be even larger due to the fact that the network of outdoor LED screens in Lithuania will be expanded this year from 10 to 18 screens. The new devices will also be installed in smaller cities with the populations up to one hundred thousand people.

New convenient tools for outdoor LED screen advertisers

Still, in order to occupy a larger market share it is necessary to offer new services or convenient tools to the customers. To this end, ACM has introduced a “LiveAd” system which helps our customers amend the content of their ads with the help of a computer and access to the Internet. This service was introduced at an unusual time, when the outdoor LED screens were broadcasting real-time information flow about the results of matches played during the European Basketball Championship. The results were sent to the outdoor LED screens by one of our employees, who watched matches in various bars and updated the information with the help of a portable computer and access to the system. Thus, those who were passing by the LED screens were regularly informed about the course of the match.

The “LiveAd” system became interesting to those companies, which prefer making changes to the content of the information and advertising messages. The customers who are using the system include daily newspapers, gambling companies, news portals, and television channels. According to Pukas, the customers also show great interest in other offers prepared by the companies operating networks of outdoor LED screens - a possibility to unite several companies into one network by providing an opportunity for them to coordinate settlements of accounts and the pricing interlinked with the research and accessibility, efficiency analyses.

Pukas says that the customers’ demands will continue to increase in the future; therefore, the advertising companies must apply new methods of management, and search for efficient solutions acceptable to their customers and themselves.