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

Clear Channel electronic billboards get hacked UPDATE: no they didn't, maybe

According to Engadget, via textually.org, an 18 year old grafitti artist known as Skullphone has hacked about 10 digital billboards in Southern California to insert his artwork into the screens' ad loops.

Clear Channel's definitely going to need to learn about security -- quick -- if they plan on (a) making a serious attempt in this market and (b) not getting fined (or worse) the first time somebody decides to be a bit less innocuous and delete the firm's entire playlist in favor of some select clips from a favored porn site.

[UPDATE]: According to new "news" (I have to put it in quotes when the source is a semi-anonymous tip to a gadget blog), there was no hacking and in fact "Skullphone" paid Clear Channel for the placements as a one-day promotion of... something. That, and there are unicorns living on the moon, Elvis was seen driving on I-40 with Jimmy Hoffa, and Chuck Norris's tears do in fact cure cancer. Ok, I can't confirm that last part, however I do know that if I were Clear Channel and my massively expensive digital screens were hacked, I might well be inclined to lie about it. I'm not saying that they did -- it's admittedly more likely that somebody paid them to do this -- but if they were hacked... well... I'll just leave it at that.

Tags: digital billboards, clear channel, skullphone

Clear Channel Brings High Def Billboard to NYC

It should come as no surprise that Clear Channel Spectacolor has chosen to debut a new, state-of-the-art digital billboard in New York City's Time Square. The company already owns and operates a number of the huge digital screens, as well as a network of smaller LCD screens at many of the subway entrances across New York City.

According to the official press release, "the new billboard branded 'Spectacolor HD' will boast the sharpest image quality of any digital billboard in the U.S. while also being the most technologically advanced. Spectacolor HD will be the first digital billboard in the world to run multiple advertiser spots in conjunction with streaming news, weather and live HD broadcasts provided exclusively from CNN, the most trusted source in news and information."

I think this is genuinely one time when the "that's awesome!" factor that advertisers usually use on younger, more impressionable audiences may work with adult audiences as well. I work in NYC, and I've seen the billboard up close and it looks great. It's enough to make even the most skeptical of adult media consumers stop and gawk at least for a little while, and in Times Square that's no small feat considering there are tons of ads fighting for your attention.

This really is a great combination of quality technology and great content that gives something back to the viewer. The news feed from CNN and the weather updates are two features that people passing by will find genuinely useful, and as a result they'll be more likely to actually notice the ads displayed on the screen too.

Of course, the question of measuring effectiveness once again enters into the equation. In this case, there may not be much of a problem for Clear Channel because their technology is so far ahead of what's out there that they can charge a premium for ads placed on the screen. Thus, they'll almost certainly be able to meet their ROI targets. As for the advertisers... well, at this point I'll bet they're fighting each other for exposure on the new platform. Yes, it looks that good.

One other thing to consider is how much these displays cost, and whether or not they can start expanding into other metropolitan areas (Las Vegas, Chicago, Philadelphia, etc.). Although, even if they carry a hefty price tag (which I'm sure they do) as long as the response from advertisers and even viewers remains positive, my guess is that we'll be seeing more of these outside of the Big Apple sooner rather than later.

Tags: electronic billboards, digital signage, out-of-home advertising, Clear Channel

Adfreak not impressed with Taxi TV

I came across this hilarious AdFreak post via Brand Experience Labs, who notes that, "if we keep talking about the consumer being in control, why did we insist on creating things like this that the consumer can't control?" AdRant's Brian Morrissey recounts:

During a 15-minute trip, I saw one commercial for a Panasonic laptop a half dozen times and another for some cut-rate brokerage called Zecco.com several more. The menu has “channels” that don’t actually work: Switching from NBC news highlights to “sports” yields yet another Panasonic ad, followed by more of the same news clips. Ads can’t be muted. After my experience, I think I’ll go back to looking out the window. Drivers hate the system because of the GPS tracking, but they also have to put up with the nonstop racket. My driver told me he despises Panasonic after being subjected to the ads hundreds of times a day. He predicts “only tourists” will use Taxi TV after regular riders try it once. “It’s a scam,” he said. “The ad companies and the city are the only ones getting the cheese.”

Several commenters have since noted that there is in fact a mute button that passengers can use, but still, if the quantity of ads-to-content is really accurate, Taxi TV isn't living up to its original billing as a source of information and entertainment. As I originally speculated, though, it was probably just another service that Verifone could offer once fitting all of the cabs with credit card readers (the real essential service in my opinion), and maybe even offset the costs of doing so.

An even bigger problem than pissing off customers, if you can imagine, is making the taxi drivers crazy. These people drive New Yorkers and tourists around all day long, every day, through smog, traffic jams and a million other annoyances. Is it really a good idea to make them any less stable than they already are? Why didn't Clear Channel or Veriphone opt for directional speakers that might shield the driver from some of the noise? Haven't they ever heard of employee fatigue before? This stuff isn't new, it's digital signage 101.

What do you think, will Taxi-TV last? Will we see it change (either in form or function) in the near future? Or will Clear Channel just not care because they're raking in piles of money? My guess so far is that it won't be the latter, since Morrissey seems to indicate that aside from Panasonic, there are only a few other third-rate advertisers, suggesting that sales of screen time haven't gone too well so far.

Tags: Taxi TV, Clear Channel, digital signage

Clear Channel Malls Debuts "Oh Zone" Campaign in East Coast Malls

MediaDailyNews reports that Clear Channel Malls, yet another division of the media behemoth, is will roll out a highly interactive multimedia mall experience dubbed the "Oh Zone" in East Coast malls come March 2008.

The "experience", according to the article, combines human interaction with digital signage and even gaming elements: "The 'Oh Zone' campaign centers on portable sets that include digital video displays and interactive touch-screen consoles. Consumers are directed to the installations by greeters who offer an incentive in the form of a game piece. Once there, they are guided through the interactive displays by staff who explain how to enter contests, respond to product questionnaires, and print out "game cards" that can be redeemed when they proceed to the event area."

The idea merges regular retail or out-of-home advertising with event marketing with the goal of engaging customers instead of simply broadcasting messages to them. The digital signs, fixtures, posters and other POP are enhanced with interactive advertising techniques like collectible game pieces (see McDonald's successful Monopoly campaign) and rewards for participating: "On their way out (of the "Oh Zone"), shoppers receive a gift bag with samples and more incentives to visit specific retail outlets in the mall."



As digital signage gains more momentum in the ad world, we'll see more integrated marketing experiments utilize them with other media to create an immersive experience. A comprehensive combination of different advertising forms, from the new to the old, will be the winning equation for advertisers in coming years.

While I think this particular approach will perform best with younger audiences, that doesn't necessarily mean that it will work with older ones who aren't as easily swayed by gimmicky ad techniques. All demos enjoy give-aways so that's usually a keeper across the board. But the game piece part of the equation could need to replaced in order to reach older, less patient and less engaged audiences. Perhaps a more information based approach (free pamphlets/handouts), or any number of other variables, can substitute for the game pieces in order to reach different targets.

The article also mentions that Clear Channel is promising through the ads "as many as 1,400,000 "brand impressions" and potential engagement of more than 50,000 consumers,"
and according to Clear Channel's definition (from their "Common Outdoor Vocabulary And Definitions Page"), an impression is "The total number of impression opportunities an out-of-home unit can produce measured against a target audience in a market. Cumulative impressions can be combined to reflect an entire out-of-home campaign."

Thus by that definition, an advertiser can assume that by participating in the "Oh-Zone" campaign, 1,400,000 members of their target audience will take notice during the designated period in which the campaign lasts. Now whether that would be in a more concentrated week or two or a less restricting couple of months is the big question. Either way, the idea of selling an interactive, multi-faceted campaign on such a vaguely defined idea is kind of shaky. What makes up an impression? Does it mean just looking at the ad and paying attention for a given amount of time or actually interacting with it?

Check out the Oh Zone web site for details.

Tags: out-of-home advertising, digital signage, Clear Channel

Google purchases DoubleClick, makes deal with ClearChannel

In case anybody still had doubts about Google's advertising ambitions, they announced a few deals over the past several days that will put them to rest once and for all. First, in an effort to solidify their position as the preeminent Internet ad engine (and to piss off Microsoft, I'm sure), Google plans to acquire DoubleClick for an insane $3.1 billion. Combined with today's news of a massive deal with Clear Channel to sell radio ads on their 1,650 US stations, and hot on the heels of a recent deal with EchoStar to sell trackable TV ads, the search giant is doing everything possible to diversify into other areas, since Internet search advertising still made up well over 90% of their revenues last year.

However, all is not roses for the do-no-evil company. First off, it's unclear whether the DoubleClick deal will go through (though to be honest I'd be surprised if it didn't). Microsoft, AT&T and maybe some others are already lobbying the State Department suggesting that Google's acquisition could give them an unfair advantage. While the notion of Microsoft calling somebody else monopolistic and anti-competitive is ironic (and that's putting it kindly), the suggestion is worth considering. Google already collects a huge amount of personal information from its search engine and affiliate advertising systems, and augmenting that with DoubleClick's technology could make things worse. How bizarre would it be to see Bill Gates and Nadine Strossen, President of the ACLU, showing up on the front cover of the Times together? I tried to come up with a pithy good-vs-evil metaphor to describe it, but I don't care for either of them very much, so my best one-liner involved Satan and a slightly less-evil Satan (which really isn't very compelling).

Meanwhile, both Google and DoubleClick have been experimenting with in-store media for well over a year, and of course Clear Channel is on an outdoor electronic billboard construction boom. Consequently, the consolidation of power here is something we need to be watching very closely. While I'm sure that the TV, radio and Internet advertising folks are much more nervous about this than we digital signage folk are (oddly, the small size of our market is a benefit in this case), companies that want to stay competitive will need a steady stream of market-centric innovations to stay relevant.

Tags: Google, DoubleClick, Clear Channel, retail media

Clear Channel expanding their electronic billboard network

MediaPost notes that Clear Channel continues to expand their outdoor billboard network, installing digital billboards in four new markets: Akron and Columbus, Ohio, Memphis, Tennessee and Wichita, Kansas. This builds upon Clear Channel's existing installed base of six markets, which was their stated goal for the end of 2006. The additions bring Clear Channel's network to a total of 10 markets, all of which are near major, high-traffic road ways that can deliver the number of impressions needed to make the signs worthwhile. The company's new goal is to reach at least 100 digital billboards in approximately 20 markets by the end of 2007, suggesting that the screens to have a positive ROI in a pretty reasonable time frame since they're deploying more of them.

Given that the screens have cost an average of $500K apiece to purchase and install, the firm expects to spend at least $50 M in the immediate future to solidify their position as a leader in outdoor electronic billboards. Amazingly, they even plan to use the roadside displays as something of a tourist attraction at at least one location, in what's being described as one of the, "most ambitious digital outdoor ad initiatives ever conceived" by MediaPost. A signage network in the downtown area of the pre-planned "city center" at Westgate, a suburb of Phoenix, Arizona, will be built and operated by Clear Channel Spectacolor, and will include 30 electronic signs of various sizes, including some that are 100 feet tall.

I guess we'll soon get to see if it really is possible to build a new Times Square in an arbitrary location and have it become an advertising mecca. Somehow I don't think that the folks in the Phoenix suburbs really understand what they're getting into from that end of the deal, but the Westgate facility is expected to generate a considerable amount of tourist shopping thanks to its half million square feet of retail space and sports arena.

Tags: Clear Channel, electronic billboards, digital billboards

Just how many NY taxi network projects are there?

Clear Channel's NY10 network is looking even more uncertain now. First, as we noted yesterday, they released a public retraction about the advanced state of the network project, which has been described as an in-cab TV and advertising network featuring multimedia content on embedded displays. Now, ABC and VeriFone are describing what would appear to be a nearly identical network, which leaves me wondering who's really calling the shots. As the press release notes:

WABC-TV/Channel 7, the most-watched station in New York, announced today it will provide news content to the city’s famed yellow cabs. The news will be “broadcast” over integrated payment and content delivery systems developed and installed by VeriFone Transportation Systems, an alliance of VeriFone Holdings, Inc. (NYSE: PAY) and Taxitronic, the leading supplier of taxicab meters in New York.

The new systems deliver the latest technology enhancements mandated by the Taxi and Limousine Commission (TLC) and will be installed in taxis over the course of the next year.

As part of the partnership, WABC will provide a customized version of its market-leading “Eyewitness News,” updated several times a day with the latest news and weather information. The video will be fed via wireless broadband technology from WABC’s website hub, www.7online.com, to thousands of moving taxicabs equipped by VeriFone Transportation Systems.

This would suggest that the meter system will be displaying the content, and not a separate multimedia display in the back, as we've seen in some past networks (and guessed would be what the NY10 network used).

So which story is accurate? Hopefully the situation will become more clear over the next few weeks, as one (or both, if they're not the same) of these networks goes to pilot.

Tags: ABC, VeriFone, Clear Channel, NY10, out-of-home advertising

ClearChannel clarifies NY10 taxi cab signage network

We wrote about Clear Channel's ambitious NY10 in-taxi digital signage network a few weeks ago, right after Advertising Age wrote an article about the network and its implications.

Apparently, what was written at the time wasn't entirely correct, at least according to this correction/retraction that Clear Channel posted today:

Clear Channel Outdoor (NYSE:CCO) wishes to correct the Press Release we issued January 4, 2007. As stated, our goal is to inform and entertain passengers in at least 5,000 New York City taxis by airing NY10, New York Taxi Entertainment Network. At the present time, neither we nor any subsidiary of Clear Channel Outdoor is a party to any contract with any owners of the approximately 13,000 New York City taxicabs. Currently, the Taxi and Limousine Commission (“TLC”) has not authorized the sale of any technology systems with or without media entertainment to owners of NYC taxicabs. Furthermore, neither Clear Channel nor any of the four vendors currently approved for testing, is “partnering” with the TLC. The use of such term was intended to demonstrate the enthusiastic commitment Clear Channel has in working cooperatively with the TLC on this exciting project, which will benefit the entire New York City taxicab riding public. We regret any confusion that may have resulted from the original release.

So did they get into trouble because of this? While they've been trying to go private again, they're still a public company, thus any misinformation leaked to the press can get them into hot water with the SEC. Or, by over blowing the story, Ad Age and anybody else hyping the deal could have inadvertently aggravated the T&LC (a notoriously difficult organization), putting it in jeopardy before it ever got off the ground.

Hopefully we'll get a bit more clarification to this clarification soon, since I was getting pretty excited that somebody like Clear Channel was going to step in and give this thing a try. There have been numerous failed projects to put multimedia devices into New York cabs (and I'll even include that Godawful thing with the voice of Joan Rivers), but nobody has been successful with it yet. Clear Channel, with their big piles of cash, advertiser relations, and out-of-home advertising street cred, could have been the ones to make it happen.

And who knows, maybe they still will...

Tags: Clear Channel, NY10, digital signage, out-of-home advertising

Clear Channel brings electronic billboards to Minneapolis/St. Paul

According to MediaPost, newly-privatized Clear Channel has expanded their outdoor electronic billboard project into Minneapolis, which marks the 6th market that they now provide the devices in (previously we noted that they were expanding the network into Tampa, Florida, and Milwaukee, Wisconsin). In total, the Minneapolis/St. Paul screens join those in Cleveland, Las Vegas, Albuquerque, Milwaukee, Tampa, and London, England, meeting Clear Channel's previously-stated goal of launching 4-6 digital billboard networks by the end of 2006.

At this point, it will be interesting to watch whether they will continue to expand their network continuously, or if we'll see a dropoff in new installations while they test out their business models for ad sales. On the one hand, Clear Channel probably already has a good idea of whether the screens will be profitable (and how quickly they'll get there), so it might be best to continue with the expansion. On the other, though, they already own much of the best billboard real estate (currently populated by static billboards, of course), so they might not feel much pressure to continue with costly installations while they're still tinkering with the model.

Tags: Clear Channel, electronic billboards, digital billboards, outdoor advertising

Clear Channel invests in outdoor digital signage

According to this article at Media Post (free subscription required):

CLEAR CHANNEL OUTDOOR IS EXPANDING its digital signage network with a number of new installations in the cities of Tampa, Florida, and Milwaukee, Wisconsin, the company announced today. In Tampa, three new digital billboards are going live ahead of a planned total of nine for that city's network. In Milwaukee, Clear Channel is bowing six new digital signs.

Measuring 14 by 48 feet, the new signs are standard LED billboards capable of displaying multiple messages, and all are located near heavily trafficked roadways. Segmenting commuter traffic into "day parts" could allow Clear Channel to charge a premium for periods that see heavy commuter traffic--a strategy that Randall Mays, the president and CEO of parent company Clear Channel Communications, has described in public statements.

We typically prefer to call these large outdoor displays digital billboards or electronic billboards, reserving digital signage for smaller indoor applications, but perhaps that's just because of our particular focus on the market.  The article also notes that aside from promoting the viability of the business model Clear Channel is also looking carefully at the technology powering it (unlike traditional media, who, as Paul Meyer, the CEO of Clear Channel Outdoor's global operations says, tend to view tech more as foe than friend).

[ UPDATE 11/16/2006 ] ClearChannel was just purchased by a couple of private equity firms, probably because they want to try some things (perhaps digital signage included) that could have enormous long-term gains, but stock price-killing short-term costs.

Past articles about Clear Channel include:
Clear Channel Outdoor tries out digital billboards in Albuquerque
ClearChannel to try out mall digital signage
Manhattan digital signage network shows sponsored artwork

Tags: Clear Channel, digital signage, electronic billboards, digital billboards, outdoor advertising