Outdoor-Advertising Industry Divided on Merits of Concept : Gannett to Debut National Billboard Network
Gannett Co. plans to launch a national billboard network next week aimed at making it easier for advertisers to implement national campaigns through the Rochester, N.Y.-based communications company.
But even before Gannett’s Outdoor Network USA officially begins on Sept. 9, several firms that specialize in buying outdoor-advertising space are attacking the concept.
While Gannett claims that the program is good for the industry because it will encourage new advertisers to use billboards, its opponents say the program is a clever Gannett sales technique that may be good for Gannett but could damage the industry’s credibility and take business away from them.
Gannett, publisher of 86 daily newspapers including USA Today, is also the largest outdoor-advertising company in North America with about 20% of the $1.2-billion billboard industry.
The network will allow Gannett salesmen to sell space not only on Gannett billboards but also on the billboards of certain other companies, reaching about 72% of the population in the top 100 markets.
It also will facilitate the purchase, placement and production of national advertisements, since Gannett will centralize billing in a way that allows the network to provide advertisers with a single invoice.
The company says it created the network because it could not efficiently meet the needs of advertisers interested in national billboard campaigns.
Outdoor Network allows Gannett to overcome this by organizing a formal network of more than 20 major outdoor-advertising companies, including Ackerley Communications and Lamar Corp., that have billboards in cities where Gannett is not represented.
Metromedia’s giant Foster & Kleiser subsidiary was not asked to join the network because of antitrust conflicts; F&K; competes directly with Gannett in several markets.
Firms specializing in buying outdoor space say they already provide a superior service by assisting advertisers in the purchase, placement and verification of billboards. They say that Gannett will encourage advertisers to use Outdoor Network billboards, while their services help advertisers select competitive rates and optimal locations.
“It is very difficult to buy this medium, so we decided to make it a lot simpler,” said John Hope, a Gannett senior vice president. “The key that makes the whole thing work is that it makes it easier for the advertiser to buy, since he doesn’t have to contact 20 different companies to get competitive data.
“If (an advertiser) wants to buy the top 20 (markets) right now, he has to call 20 different outdoor guys. Now, he can go to one source.”
“What they are telling people is that one-stop shopping hasn’t existed,” said Martin Mullany, president of Out of Home Media Services, a firm specializing in buying outdoor space. “We have been doing it since 1916. What Gannett is offering an advertiser is a lot of hoopla. There is little substance in what they are doing.
“From an advertiser’s standpoint, when you buy outdoor, you have to know about competitive outdoor media in the same market,” Mullany said. “You want to negotiate among competitors. What Gannett is interested in doing is negating the idea of competitive negotiating.”
Jack Donahue, vice president of the Institute of Outdoor Advertising, said he believes that the network will increase awareness of the merits of outdoor advertising.
Donahue, who said his organization represents companies both in favor of and opposed to the network, said: “It’s new and different, so it makes some people nervous.”
When asked to explain why some outdoor-industry experts are opposed to the network, a Gannett outdoor official said: “They have been doing business for so many years the same way that they don’t know how to cope with it. When they get further down the road, their comfort level will increase. This business hasn’t had a change like this for a long, long time.”
Gannett says one of the goals of the network is to attract new advertisers to the medium, which still relies on tobacco and liquor advertising for about half of its sales. Gannett is targeting consumer-packaged-goods companies and will try to sell them on the merits of billboard advertising.
“There is a lot of controversy at the moment over whether this thing will fly or not,” said Richard Asch, president of Asch Advertising, a firm that specializes in buying outdoor space.
“It is difficult to get a reading until something actually happens. To date, there is just a lot of talk back and forth, but it is hard to make a flat-out statement until we see what is going to happen here.”