Out-of-home media prime real estate

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Related: Marketers treading carefully before Olympics

NEW YORK -- Unless they are staying in a luxury hotel with legal access to international cable, most of the non-Chinese-speaking visitors to the Olympics won't be watching Chinese television. Not inside, anyway. They will traverse the capital's congested streets, passing the outdoor ad spaces mushrooming across China's sprawling cityscapes.

A recent Merrill Lynch study suggests that as China's TV audience thins in urban markets increasingly distracted by new forms of entertainment, out-of-home advertising can help brands "plug the gap" between the shrinking urban TV audience and the 80% of the Chinese population not yet on the Internet. Merrill Lynch analysts Eddie Leung and Thomas Chong see China's out-of-home ads growing 28% cumulatively from 2008-12.

Shanghai-based Focus Media is the best known of China's out-of-home media companies. Its in-elevator digital screens and bus stop light boxes have made it a hot Chinese firm on the Nasdaq.

After the quake, Focus replaced many of the ads it was hosting with a plain black poster showing the numerals 08.05.12, signifiying the date of the tragedy. "We will not forget," the posters read.

But these somber tributes don't appear on any of Beijing's government or bank buildings. These coveted spaces are the turf of state-run Beijing All Media & Culture Group, the designated outdoor ad promoter for the Olympics and the only company with rights to broadcast live TV programs (including CCTV's coverage of the games) across its network of 11,000 LCD screens peppering the capital.

Poised to tap this key juncture between the state's still-communist ideology and its people's growing capitalism is Hong Kong-based Network CN -- a company funded by Ziff Davis Media in the U.S. CN recently struck a deal with BAMC to act as the ad broker for its out-of-home network in Beijing, selling ads into the very hallways and plazas of the seat of Chinese communist power on the eve of its coming-out party.

Stanley Chu, GM of CN, says the company has struck deals with Chinese computer maker Lenovo and Web portal Sina as well as with smaller Chinese companies in real estate, supermarkets and pharmaceuticals.
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