EDITOR’S NOTE: An abbreviated version of this interview was published in the October issue of Airport Revenue News. Below is the interview in its entirety.
Forty years ago, Interspace Airport Advertising opened its doors and began helping local companies advertise their brands at Lehigh Valley International (ABE) in Allentown, Pa. The displays were decidedly static and they primarily welcomed airport visitors to the region. But at the time it was a cutting-edge idea.
A year later, Transportation Media was founded in Chicago to provide airport advertising services at Chicago O’Hare (ORD). Both companies grew considerably over the next few decades before being acquired by what is now Clear Channel Airports. Transportation Media, then a division of Eller Media, became part of Clear Channel in 1998 and Interspace followed in 2006. The resulting company, Clear Chanel Airports, has watched and participated as airport advertising gained traction and evolved into a digital and interactive industry of its own.
ARN’s Andrew Tellijohn spoke with John Moyer, senior vice president for development and general manager at Clear Channel, on his observations about how the industry has changed and where it’s going in the future.
Tellijohn: It’s been 40 years since predecessor Interspace Airport Advertising started in this business at Lehigh Valley International (ABE). What did those early advertisements look like?
Moyer: When Interspace Airport Advertising first launched the Allentown Airport advertising program, which is Lehigh County International Airport at this point, it really looked like and was a corporate and community showcase that was designed to tie the airport back to the community and the businesses in the community, and it looked like a lot of corporate welcomes. So local larger corporations that were proud to be part of the Lehigh Valley for 40 years, those sort of messages – [they provided] awareness that they were headquartered here. There were a lot of product cases, so in many cases the products manufactured here were shown off. And of course the entire program, whether signage or product cases, was all static, no digital or anything of that sort. [It was] nothing that we would see as innovative today, but at the time it was completely groundbreaking to have a professionally designed and managed corporate and community media program at an airport, especially that size.
Just a side note on that, there were two parallel paths here to our 40th. Strangely enough, there were two family-owned businesses that started in the same year. One was Interspace Advertising. The other was a firm out of Chicago that went through various name changes, but was a family business there that started with O’Hare International Airport. It was very groundbreaking back at the time to have a professionally managed program at a large airport like O’Hare, too.
Tellijohn: So these two businesses were really the visionaries behind doing advertising in airports?
Moyer: That’s right. And I guess we’ve come full circle, but it was really a lot more like sponsorship back then. So that company, Interspace, did a lot of sponsorship work because those large companies were effectively buying a brick in the airport and long-term contracts like Bethlehem Steel and like Air Products – those types of firms that simply said, ‘We’re proud to be part of Lehigh Valley, welcome to our part of the world.’ All of that was mentioned at the airport.
Tellijohn: What were some of the milestones that allowed advertising in airports to become more mainstream?
Moyer: Although airport advertising had started in the ’70s, sporadically here and there, and were done as one-offs, there were milestones in the ’90s where considerably sized networks of airports were starting to be managed by professional companies. And there were a number of [Airports Council International-North America] awards given out to us by the late ’90s for real milestone programs. I guess as these milestone programs came together and began to make up a network where advertisers had a single company to deal with and have assurances that the quality of the inventory and the design of these programs would represent them well, airport advertising actually became an industry, it became professional. That really didn’t happen until the ’90s.
Some of the milestone programs took place in Chicago and Lehigh Valley. But some of the local and regional award winners that started to emerge in places like Norfolk, [Va.]; Albany, NY; Sarasota, [Fla.], even in the early 2000s a bit in the islands, St. Thomas, all the way up to Dallas/Fort Worth and most recently Detroit really took the lead in a lot of ways with large format digital almost 10 years ago and then added more digital to that program about five years ago.
Philadelphia International (PHL) has probably one of the sleekest, most-integrated digital programs there is today. Denver [International (DEN)] does, as well. These are all milestone programs that effectively came together from about 2011 to about 2013 when most of the large airports went through a [request for proposals] process again.
Tellijohn: How did Sept. 11 and the 2008 economic fallout affect airport advertising, and how did this new industry recover?
Moyer: The ’90s is when airport advertising became an industry, became professional. It grew tremendously up until about 1999. From ’95 to ’99 was the heyday with new programs being implemented, consolidation into networks of airport advertising programs being managed by professional companies. Then the tech bubble came along in 2000. That stalled things out a bit. That really made a reality check on capital investments and how fast this niche media industry was growing.
Shortly after that, you had 9/11 in 2001. That whole period was pretty rough where it was just a shock to the system. All of a sudden, revenues weren’t growing as fast, advertisers weren’t spending as much anywhere and in particular, in this niche of airport advertising, things started to pull back and investment followed.
Then, after we got some distance from 9/11, from about 2003 on, things started to recover a bit. But there weren’t a lot of RFPs out there. The airport industry was still reeling from 9/11 and they had much bigger things on their mind, like investment in security and how they were going to handle [Transportation Security Administration] requirements. Obviously the airlines were in big trouble. There weren’t a lot of RFPs being put out.
So the industry as a whole became a bit stagnant. There were a bunch of legacy programs that existed. They were fine. There wasn’t a lot of newness.
Then in 2008, the economy took a beating again. There weren’t a lot of RFPs. The revenues weren’t growing on the media side. Then about 2011 or so, all of the largest airports in the U.S. started opening up and saying, ‘We went through all of these issues, we’ve been sitting on our airport advertising programs, let’s start going to RFP.’ All the big ones started going through it. It started in Detroit, Phoenix, Philadelphia, Chicago, Denver, Houston – you name it, they all went through.
Now, today, there are a lot of new, very fresh, highly digitalized programs and even more digital and investment coming online soon. Chicago is being built out with $15 million of capital investment. L.A. installed their own digital. There is a lot of exciting stuff coming up. But we’re near the end of that RFP round.
Tellijohn: Digital and experiential marketing have become prominent in airport advertising. How did the evolution from static to these more dynamic mediums take place?
Moyer: What drove digital was this idea that how can we as the media industry work together with airports to minimize the space impact or requirement within these structures where everyone is fighting for space and at the same time enhance the ad-revenue possibilities, the passenger experience and the advertiser experience.
And digital, because it allows more stories to be told by advertisers, because it allows more advertisers to be in the same high-visibility location, it seemed to be the solution. Of course, airports wanted the added value of the image enhancement to be those airports that are using the latest technologies in their facilities.
So digital kind of lent itself to the passenger experience and to the airport brand and image, as well. The problem was that digital is very expensive. This is going back somewhere between seven and five years, maybe more. We did our first digital in an airport in 1998, which was a real experience.
But it was very expensive, it was smaller format. And one of the big problems was advertisers did not have content to put into these things. So you had this very dynamic media designed to tell a story, designed to show dynamic content. But you had a lot of advertisers that just didn’t have that kind of content. So what happened there was slowly but surely the prices went way down for digital. The quality went way up. The size available went way up. And interestingly enough, the introduction of digital flat screens in people’s homes, individual consumers, and users getting used to running around with mobile devices like smartphones and using them actually resulted in more and more content becoming available and more focus on digital content.
So the media industry, the advertisers, have actually started to catch up and be able to use digital in the way it was intended for. That helps.
Tellijohn: How deep into airports was Clear Channel when it acquired Interspace, and why was that a good move?
Moyer: Clear Channel was already deep into airport advertising. They had acquired a Chicago family business that had considerable airport advertising contracts. So at the time they purchased us, they were in [Chicago O’Hare International] ORD, Midway (MDW), Dallas, Denver, even Newark. They had a portfolio with just about equal revenues to Interspace as far as the airport industry goes.
So it was the merger of two of the best in the business, certainly the largest in the business as far as large national and international airports go and local and regional airports.
The attraction to Clear Channel at the time was Interspace was highly, highly creative. They were like a tech start-up. Innovation was very high at Interspace and had a large local and regional network. And they had a proven again and again the best practices in the industry for marketing and monetizing local and regional airport programs.
Clear Channel had this airport investment that had a large national network, had the best practices in the industry effectively for national and international brands being sold into large airports. They wanted the innovation. If they could merge the capabilities to use the national network to sell into local and regional airports and use the innovation and local-regional expertise to take into larger airports, it was a win-win combination that would be a milestone in the industry. In fact, it’s tough to merge any business, but we got through it. Systems were integrated. And best practices from both the standard-setting companies were merged. It’s very effective today.
Tellijohn: At what point did the advertising at airports really become mainstream and accepted as a practice?
Moyer: I would say that was probably mid- to later-’90s where advertising really hit the radar as a viable but yet still specialized media buy for advertisers. That was just because it had the network scale, the ensured quality and it had consolidated down to two firms to go to to be able to purchase an impactful campaign across airports.
Tellijohn: Airports seem to have become more open-minded in where advertising is displayed at airports. When did that happen, and how do you see it evolving?
Moyer: We firmly believe that airports in North America, particularly in the U.S., have become more open to advertising placement, sizes and digital. It hasn’t really kept up with the demand or expectation relative to the huge and growing amount of competition off airports by other media.
There are so many choices out there today for an advertiser or an agency representing an advertiser on where they put their budget . And the choices are multiplying monthly. Now, when you’re pumping your gas, you’ve got a video screen running advertisements in front of you. While you walk down the hall in the mall, you’ve got a drop-down digital screen in front of you. When you’re on this app or that app, you’ve got advertising of different types. It’s just getting embedded into everything as a solution to pay for things or to add revenue streams. It’s everywhere, especially the mobile thing, which has now become more than a talked-about first-adopter type of product. Really large, savvy marketers are moving substantial dollars to mobile. And within the mobile category, there are a staggering number of ways you can go at it and different apps and things you can spend on.
So the fight for dollars for airports has become immensely more competitive beyond this unique ability airports have to monopolize airport advertising within the airport facility. The expectations from advertisers has become larger, more impactful in order to compete with this other media – more head on, more larger format. So we’ve only really gotten to the tip of the iceberg right now when it comes to the sizes, the experiences, and the digital and mobile media in airports. Some airports are going to be willing to go there and some aren’t.
Tellijohn: Is this an area where some airports are missing out on revenue opportunities? And are there others?
Moyer: Absolutely. There can be upside benefits and there can be minimizing benefits. So if you want to maintain a very traditional small location embedded throughout the facility, you’re going to have a hard time competing in today’s media market.
If you want to look at a fresh approach, a very strategic and key large format with highly impactful locations, whether they are in digital or static, throughout your terminal facility, there could definitely be upside.
Another upside is for outdoor. Outdoor beyond the U.S. has been a fairly large part of many airport media programs bringing in very large dollars. … So I guess my note is that some airports are missing out and are going to miss out. Some aren’t. Some are missing out by design – they just say, ‘We don’t want that kind of program.’ We will customize to that airport’s objectives and desires. Some are missing out by accident. They’re missing out because of their own politics or internal bureaucracy. Some might be missing out because of the inability to act on certain opportunities. But there are a lot of airports out there that are innovative and light on their toes enough and able to work through their own internal process and systems that are going to be able to take advantage of some of these things.
Tellijohn: Any other opportunities like this?
Moyer: I think sponsorship is a buzz word that has been used in the industry over the last five years or more, mainly as a way in by some firms in order to co-exist with or compete with existing media programs. But sponsorships … we’ve been doing since the beginning of our business and have done a lot of.
Really what it consists of is long-term advertising buys that generally come with added value activations. When money comes out of the sponsorship bucket, it’s usually longer-term, generally highly impactful and it generally comes with value-added things and activations like parking spots or express check-in or dedicated lounge areas. These sorts of things have become the expectation of larger sponsors and that’s just because they’ve come to expect them at other venues like concert arenas and stadiums. There’s a large advantage to keeping that monopoly airports have on their own facility under a single firm and not creating unnecessary competition because airports are already competing with massively growing competition externally by many other media providers and media options.
There are going to be opportunities on the mobile side. Advertisers and sponsors are going to be looking at mobile technologies such as being able to interact with the ads in one way or another, converting viewers in airports from offline to online. It started in an outdated way now, QR codes, then you have near-field communications. You’ll soon have people talking about beacons that can reach out and ask a traveler if they are interested in interacting. Those sorts of things are coming up.
Tellijohn: Is there anything else you’d like to add?
Moyer: The one point I would make is in the end, the potential for an individual airport’s media program from the point of revenues, passenger experience, those sorts of things, that potential is really achieved in the end through their relationship with their partner, with their media provider partner. And that potential is greatly enhanced through a very close relationship, open and honest communication and very collaborative on ‘how do we get from A to B if the airport objectives are B,’ how do we get there together. Because there is so much competition in the media segment off airport, to create that confusion and competition on airport is just not productive.
