Circulation and Opportunity to See

Two weeks ago, we talked about the circulation debate taking place in the out-of-home industry. I mentioned that how we measure circulation is not as important as doing it consistently, so that we compare one sign to a similar group of signs in the same way. The debate centers around the difference between two groups of people and how likely they are to see ads. So what is the difference between an Opportunity to See (OTS) a sign and a Likelihood to See (LTS) a sign?

Well, in really technical OAAA terms, the group that has a Likelihood to See an ad is the “portion of the audience who are likely to see an ad, which is based on variable and conditional factors that can impact the probability” of seeing the ad. In far simpler terms, it’s just a smaller group of people that are more likely to see the ad. The question becomes how should the industry discount or calculate that subset of people who are more likely to see the ad?

 

 

OAAA guidelines suggest that the Opportunity to See should be based on something called a “Viewshed.” Check out the Graphic to the right from OAAA’s recent guidelines. It is intended to show the area that is potentially visible to the entire audience. The viewshed is supposed to take into account things like obstructions, size, distance and position. These things are obviously included in a broader category that we call “visibility.”

 

 

The OAAA guidelines go on to say that a Likelihood to See should be based on “proximity of the ad, visibility or eye tracking studies or technology, the speed of traffic on the road, time based event and environmental factors” such as weather.

The big take away here is that circulation is impacted by visibility, so visibility should be considered when evaluating sign sites. One way that GeoPath used to measure visibility was through a Minimum Visibility Guideline.

GeoPath’s old guidelines required a minimum unobstructed visibility for a specified distance during the final approach to a sign based on the sign size and (or) the speed of traffic in the case of Bulletins. That was a simpler time, but OAAA and GeoPath may want to pull out some of those old guidelines to establish some of their new visibility guidelines.

The number one thing that almost everyone asks me, after I tell them that we are billboard consultants is, “Ooh interesting, so that’s based on how many cars pass the signs, right?” I politely tell them that circulation one of the many things that we consider, but we have found a way to complicate it far more than just counting cars.

We’ve talked about the fact that building owners in Times Square NYC receive 80% of advertising revenue and landowners in Louisville, KY may only get 20% in BillboardInsider articles. I thought we’d dive a little deeper today and talk about why that is the case and the many other things we consider when we are estimating a fair lease rate for a billboard site.

Here’s a short list of the things we consider when evaluating any sign site.

• Circulation
• Ordinances
• Demographics
• Market Size
• Other Leases
• Visibility
• Advertising Rates
• The new thing that will probably come up later today that makes each location unique and keeps our job interesting!

 

I’ll take a small part of the first one (Circulation) in this week’s newsletter. You may have read articles recently about the head of GeoPath Kym Frank stepping down. Or you might have heard someone mention that there is a debate raging about OAAA’s new guidelines for measurement. I’ll leave most of my opinions about those things out, but the root cause for the debate raises a valid question. Should the industry ask advertisers to rely on the “opportunity to see” or the “likelihood to see” a sign?

The argument for discounting OOH circulation (traffic counts discounted for lighting) numbers in 2009 was that other media were discounting their circulation numbers based on a “likelihood to see” and OOH numbers were not believable. Advertisers were reportedly discounting OOH numbers when they put their sign buys into the advertising campaign mix. We think that was a valid argument, but the way that GeoPath did the discounting was deemed a proprietary secret that they could not share. Advertisers could not replicate the formula, so they were told to accept it as a reliable discount.

Whether the industry (pronounced “the big three”) decides to go backward and use an “opportunity to see” or pulls back the curtain and shows the world their secret sauce for discounting to a “likelihood to see” number really doesn’t matter too much in the evaluation of a sign site. As long as we are comparing one sign to others based on the same rules, we will be able to use circulation as one metric for evaluating signs.

We’ve moved! We spent the weekend moving SignValue into larger offices. Now we have a little more room to spread out as we grow. After a long morning moving boxes I was wiped out, so I drove through a Starbucks for something cold (and caffeinated) to keep going. I couldn’t help but notice something at the drive thru. The driver of the car in front of me handed the barista their cell phone, probably to get credit for the purchase, no big deal. But it was the way that she took the phone from the customer that struck me.

She reached out with two hands and carefully took the phone from the customer. It seemed like a pro-move that she had learned through some great corporate training session on her first day (after all she’s handling a $1000 device). When I pulled up to the window I asked her if Starbucks trains their employees to use two hands when taking a cell phone from customers. She told me that they don’t have a policy or training for that, but she wanted to make sure she didn’t drop the phone. Talk about a super conscientious person that goes above and beyond!

 

I’m proud to say that everyone on our team treats our clients with the same care and concern as that barista. We make sure that we handle their signs or property with two hands.