A very big client for Digital Out-of-Home

This post is a reprint from Mediaweek (Plough’-ing New Terrain Schering sets biggest digital OOH buy via new MPG unit), written by Katy Bachman on 26th January 2009. We have published this because it gives a serious signal that large advertisers are taking the digital out-of-home medium very seriously.

Paving the way for new respectability in the digital out-of-home space, health-care and packaged goods advertiser Schering-Plough plans to place the industry’s largest paid buy, estimated to be close to $10 million. The campaign, set for second quarter for a number of its brands, is not only gutsy, it could also be the kind of buy that will help move the medium into the media mainstream. 

Digital out-of-home is still one of those tempting, emerging media that is so new and so fragmented, it generally falls into the experimental column of the budget, (if the advertiser is lucky enough to have one of those these days). That’s why last summer, 22 networks ran a pro-bono campaign for the Michael J. Fox Foundation to demonstrate the medium’s capabilities to reach a national audience.

While all the details have yet to be worked out, Schering-Plough’s plan, developed by MPG’s newly-formed Chrysalis unit, will deliver more than 1 billion impressions over the course of the campaign. Neither the client nor the agency would comment on the estimated cost of the campaign, which observers said lands somewhere between $8 million and $10 million.

Over a period of eight to 12 weeks, Schering-Plough advertising for several sun care, footcare and upper respiratory brands will run on 17 digital networks in nine venue categories. To target consumers closer to the point of purchase, Schering-Plough chose networks that reach consumers in varied lifestyle locations from health clubs and physicians’ offices to malls, coffee houses, golf courses and airports.

The campaign is a departure for Schering-Plough, which like most packaged goods companies, has relied on traditional media. “Consumer mindsets are very different in this environment and we think it is important to explore a variety of ways to reach our target audience,” said Chris Meringolo, director of global media services and digital marketing for Schering-Plough Consumer HealthCare Products. “Digital out of home offers new touch points for communication, many of which are closer to purchase opportunities.”

Moving at least some of its advertising and marketing closer to the point of purchase makes sense for Schering-Plough. While the overall sales for its consumer healthcare products rose 2 percent in third quarter 2008 on the launch of new constipation product MiraLAX, sales of its other over-the-counter products, such as Claritin, were low. After spending about 84 percent of its media budget on TV (per data from Nielsen Monitor-Plus through November ’08), and at least $2 million for one ad in a first-time Super Bowl spot in ’08, the company may have figured it was time to try a medium that was less costly and more targeted.

Schering-Plough’s willingness to try something new and the growing interest in digital out-of-home from other national advertisers is why Havas’ MPG formed Chrysalis in November as a dedicated unit to focus on “touch point communication planning,” including digital out-of-home, event marketing and other location-based media channels. 

“Traditional media doesn’t have the same power it had before in terms of reach,” said Steve Lanzano, chief operating officer for MPG, whose clients include Volvo, Exxon Mobile, Sears, Kmart, McDonald’s, Pearl Vision, Autozone and Fidelity. “When you’re dealing with ratings of 2, it’s not the mass medium it once was.” 

Chrysalis, right now a small group of six people led by OOH vet Connie Garrido as president, has high hopes that the planning and execution of the Schering-Plough campaign can provide insight for other advertisers that have been nervous about harnessing the nascent medium. 

Just as important as placing the dollars, Chrysalis is planning a heavy research component to gauge the success of the campaign using metrics requested by the client. Talks are already underway with a number of research providers and consultants including Arbitron, Nielsen, Acxiom, GfK Group, OTX, Millward Brown and Sequent Partners. 

“TV is a safe haven because there is a comfort in the research,” said Garrido. “If we’re going to go to consumer-centric planning, we need to better understand it and make it comfortable for the advertiser to take a risk. No one has quite figured it out. There is a multitude of approaches agencies use to plan and buy alternative media.” 

For Chrysalis, the planning process was a critical component in understanding and advancing the medium. Chrysalis worked with the Out-of-Home Video Advertising Bureau to bring in scores of OVAB-affiliated network companies, which made brief presentations. To narrow down the choices, Chrysalis held another series of meetings with a smaller group of networks, leading to formal requests for proposals in late December. In the last week, Chrysalis selected the networks that made the most sense for Schering-Plough’s brands.

“Most of the vendors of new media never find out how planning and account people think,” said Mitch Oscar, executive vp of televisual applications for MPG, who spearheaded the initial meetings as part of MPG’s regular series of roundtables with different new media segments. 

“This is about moving a medium forward and bringing clarity to the space.”