What's going to happen to Clear Channel?

Rob Gorrie, Canadian, Adcentricity co-founder, and all-around good guy, posted an article on Thursday about Clear Channel's current spate of financial difficulties, which many analysts feel may drive the media giant to bankruptcy or fire sale later this year. Some of the biggest nay-sayers have pointed to Goldman Sachs's downgrade of the stock from "hold" to "sell" as the final nail in a coffin that has been in the process of shutting closed for some time.

I can't really say whether Clear Channel's current problems will be enough to kill it off. However, the whole situation has me wondering about the way that the company was taken private back in July.  After something like two years of negotiations, they were taken private by Bain Capital just as the magnitude of the credit crunch was making itself known.  But one of the chief arguments for going private, as Clear Channel would have us believe, was that it would allow them to invest more money on infrastructure and long-term projects without having to worry quite so much about meeting short-term sales goals.  Granted, I don't think the company was as worried about refinancing their billions of dollars in debt at the time (such an endeavor has become much more costly of late), but if you believe the execs at the top, a big, costly buildout has been in the plans for a while.

Any analyst worth his salt should be taking into consideration that for a long time Clear Channel has noted it expects to pay more now for the chance of bigger profits later.  That should be taken into consideration.  But of course, if the firm runs out of money and are forced to restructure before seeing the fruits of their labor there any number of things could happen...

Lamar or CBS Outdoor could step in to buy their outdoor holdings. Both companies have big investments in billboard advertising. Additioanlly, CBS Outdoor has a big presence in Times Square while Lamar has been investing in digital billboards, but neither firm has both, so an acquisition of Clear Channel assets would give either a leg up over the other. Alternatively, JC Decaux could use an acquisition to gain a much bigger billboard presence in the US.

I suspect management of the company's radio stations would be spun out into its own new entity.  Clear Channel is still the largest terrestrial radio company by far -- bigger even than the combined Sirius-XM satellite guys -- so as long as there's money in radio advertising it seems like a solid chunk of business that somebody would want to hang on to.

But on the outdoor side, it's a lot harder to say what will happen. Outdoor ad rates haven't fallen proportionally as far as other media like TV and radio have. And outdoor digital billboard rates have risen and continue to generate good returns to the point where more and more companies are deploying the things all over the place.

The bottom line is that now is not a good time to be saddled with a lot of corporate debt.  And Clear Channel -- an advertising company -- is most certainly not going to be receiving any federal bailout dollars.  But the debt issue aside, the company's assets throw off lots of cash month after month. If investors and debt holders are too short-sighted to see the long-term potential of the company's previously-stated plan, I'd guess that we'll see a break up before a bankruptcy proceeding.

Tags: advertising, billboards, clear channel

Signs and the Single Woman

Before heading off to the Expo, Bill posted a recent list of digital signage news of interest. One of the most intriguing – the finding that single images appeal to viewers (especially those over 40) caught my eye. Having read over the full study and analysis by Photo Finish, I wasn't too surprised by the insights into age and income segmented markets – it seems a bit obvious that younger people who deal in a lot of interactive multi-screen formats would be more comfortable with collage and multiple images than older folks who prefer single shots with more emotional content. I’m also not going to bet my money on some of the right brain/left brain gender differences they cite, as that biological research has a fair number of flaws. Better to suggest that there simply are differences in the ways men and women approach the world than search for some flimsy baseline reasons why.

But one insight that caught my attention was one about single women: After slicing and dicing the over-40 market, they remind us:

“Don’t forget single women! There are 13.1 million single women over 50. Only 3.6 million are low income. They’re known for girlfriend getaways and will buy fewer but better things. They should be included in your marketing, whether alone or in groups, and pictured as independent, capable and confident.”

Single or not, women are still more frequently the object on the billboard than the subject to whom content is directed. Racked.com does a great job surveying buildings, design, and billboards in New York City. From their random samples and a general analysis of urban advertising, it appears that most big ad campaigns focus on the “sex sells” message. Not that there’s anything wrong with that, per se (although debates about the appropriateness of American Apparel, Calvin Klein, and other campaigns that push the edge are still, I think, important. We don't want censorship, but we do want to consider what's tasteful. Even though Absolut Vodka’s recent “ad” in Sex and the City reverses the gaze to the male body, these campaigns are still limited in their demographic appeal. Ironically enough, the depth of cultural gender bias in sexy ads is obvious in that I'm comfortable posting the Dove Real Beauty image, but I'm going to ask you to go find the racy naked vodka hunk through a link. It's worth it.).

For the most part, the basic idea of sexuality that’s being sold is still anchored around the “Will I look like that if I buy this product?” model of advertising. It’s extremely difficult to find major visual urban ad campaigns pitched at women that draw upon the insights that Photo Finish suggests.

But what of the insight that women are the largest consumer group today? That as the Boomer population ages, women (regardless of their marital status) will likely remain the larger statistically significant demographic group? That women’s employment rates will remain high – and most likely go up – as the current economic trend continues? That as women gather more income-generating power, the advertising has to appeal beyond the direct social roles as mothers, wives, girlfriends, sex objects? Certainly industry leaders in advertising are beginning to recognize this. And having women in positions to determine advertising content helps (see this great review of a recent history of women in advertising).    But the tech-side of the industry (read: digital signage) has been historically oriented towards men.

In looking over the current array of urban billboards and digital signs, it strikes me that in a desire to appear cutting edge, hip, and tech-savvy, marketers are forgetting basic research into what, as Freud would say, women want. Take a look at these recent billboards and think it through before you pitch your next campaign at June Cleaver or Claudia Schiffer.

(and by the way, the "Husband Wanted" billboard is real, while the "Dear Steve..." one is a promotional teaser for Parco, PI, a short lived reality show on Court TV.)

image sources: the New York Times photo archive, Racked.com, and Australian News Service.

Nielsen GPS-enabled media tracking system measures eyeballs outdoors

I know I've read articles about this type of service before, but Branding Unbound has a nice writeup of Nielsen's latest attempt to measure outdoor media consumption using GPS-enabled tracking devices. Here's the summary of how it works:

[The company] recruited 750 volunteers who agreed to carry the device, called the Npod, or Nielsen Personal Outdoor Device, everywhere they went for 10 days.

Participants, prescreened to establish demographic profiles, allowed their every movement to be tracked and recorded – like an automated digital version of those Nielsen diaries of old. Every 20 seconds, the Npod captured each user’s latitude and longitude, while a computer system compared the data with the coordinates of 12,000 “geo-coded” outdoor signs in Chicago, including bus shelters, standard posters, billboards and overhead signs.

To establish the user’s likely exposure to an outdoor advertisement, the system applies a mind-boggling number of variables – including driver speed, the angle of the display on the road, its distance from the curb, the distance from which the display is first visible, the height of the display, whether it’s illuminated or obstructed, and so on – as users enter “impact zones,” or the point of impression.

Nielsen knows that ¾ of the people who travel under a 200-square-foot sign above a highway overpass actually look at it, while only 30% of those who drive past a bus shelter actually see it.

Using that and other similar insights, Nielsen can then use the collected data to calculate more traditional reach and frequency numbers, which can be used for planning purposes. Given how quickly the out-of-home advertising market is growing, it's not surprising to see these kinds of advanced methodologies being deployed to determine the true impact of outdoor media. To me, the holy grail (and a frightening prospect at the same time) would be combining the impression data for specific users with geolocation data for the specific items being advertised (if they're physical goods, of course). So, for example, how many people drive past the billboard for the local IHOP, and then wind up turning off of the exit to frequent the place for a short stack and cup o' joe?

Another interesting question is how this system will ever be made to work with electronic billboards, which are starting to become more common (though they still account for only a very tiny fraction of all billboard and out-of-home media sites). With a static billboard, you know exactly what's being displayed at all times. With an electronic billboard, you'd have to cross-reference the device's playback log to determine which ad was being shown at the time the individual was looking at it.

You know, because the basic system wasn't complex enough.

Tags: billboards, out-of-home advertising, media measurement