Wednesday, April 30, 2008

Monetizing empty space with digital signs

Mediapost had a pretty neat article on monetizing vacant storefronts yesterday, noting that as big and small retailers alike close their doors thanks to a tanking economy and/or shifting customer interests, new businesses have arisen that use storefront windows to show big vinyl, paper or digital signs, effectively turning them into giant, centrally-located ads. The article notes:

"Ground-floor digital displays are ideal for just about any brand that wants to reach people on the go," adds [store window advertising company WindowGain COO Prem Hira]. Benefits specific to digital displays include real-time information. For example, the spots actually pull news, weather, etc. from the web site.

The economy's loss may well be a boon for companies like WindowGain. The International Council of Shopping Centers predicts that store closings may total 6,500 for 2008, or about 1% of existing stores, which would be the highest since 2001.

It's easy to see the appeal for ad buyer and real estate owner alike. For the ad buyer, there are few better places to make an appeal than at eye-level. And the sizes of the displays that can be used are limited to the sizes of the store windows: in other words, they're huge, and very eye-catching. For the real-estate owner, they get to (potentially) make some money at a low cost and low risk, using assets that might otherwise simply be posting a loss.

On the other hand, I once heard a story (not sure if it's true or not) that several of the buildings in Times Square are actually empty inside. As the story goes, the landlords and building owners have found it so lucrative to simply sell their facades to advertisers, that it's not worth the hassle of getting tenants, collecting rent, handling build-out costs and generally dealing with the insides of the buildings at all.

It's a little scary when advertising becomes the primary revenue source for a very staid, traditional business like that. I guess it's better than going bankrupt, though :)

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1 comment:

David Weinfeld said...

Hey Bill,

Very interesting take on an emerging media platform. As a partner in a company - Motomedia - that turns vacant storefront properties into Streetlevel Billboards, I am a tad biased. But, the truth of the matter is: This media opportunity offers widespread benefits to advertisers and commercial real estate owners.

In addition to our Streetlevel Billboard and Streetlevel TV solutions, we also deploy pop-up shops (temporary retail stores), experiential marketing installations, and, ultimately, bring life to vacant properties.

We draw attention to vacant properties and help our commercial real estate partners advertise their vacancies and illustrate the traffic and exposure that their vacant properties offer to long-term lease holders.

Times Square is an entity in and of itself, like no other place on earth. As the CEO of Van Wagner said in a recent interview, "People don't buy magazines or watch TV for the ads, but people go to Times Sqaure to look at billboards."