Captivate: The Newscaster in Your Elevator

(MoneyWatch)  For a truly captive audience, it's hard to beat your office elevator. For years, it was home to little more than forced smiles, awkward body language and eyes uplifted to focus on the sequentially lighted floor numbers as if they were the most captivating programming in the world.

Those days have vanished forever in about 9,000 upscale office building elevators in the downtown business districts of 24 big cities in the U.S. and Canada, thanks to the well-named Captivate Network, which is a division (via acquisition) of Gannett.

"We are really part of a broader industry," Mike DiFranza, President and General Manager of Captivate told me today. "The 'out-of-home' digital media, which includes content networks broadcasting in the backseats of taxis and on subway cars in New York City, inside Wal-Mart stores with Wal-Mart TV, and over all of those screens inside gyms, bars and restaurants."

(The industry has its own trade association, the Out-of-Home Video Advertising Bureau, or OVAB. More about that in a minute.)

First, back to Captivate. "With consumers spending more and more time away from home, advertisers need opportunities to target their messages to people on the go," says DiFranza. "We are really a sibling of the mobile advertising space."

The company reaches 3 million white-collar consumers (HHI $112,000) on weekdays, primarily during the average six minutes of their workday spent in one of those 9,000 elevators. Its programming is a mix of business, sports, entertainment, local and world news that leverages content partnerships with 100 media companies, from Forbes, Wired, CNN, Harvard Business, and the AP, to Crain's, Boston.com, and PopSci.com. Thomson Reuters joined the network earlier this month.

"The way we engage consumers is to design our content screens with their needs in mind," DiFranza emphasizes. "The content is all text-based and appears on the left side of the screen. The ads are in video or flash and provide motion on the right side of the screen.

"That's because people read left to right. And it works. Our studies indicate that consumer recall results (for the ads) are in excess of 48 percent."

The buildings whose elevators house these smart elevators pay a monthly service fee, as in the cable TV business, but that revenue stream accounts only for about 10-15 percent of the company's revenue.

It's the advertising revenue that carries the business. Which brings us back to OVAB, the trade group. OVAB has an initiative to develop a set of standards that will govern the metrics generated by its member companies, so a viewer in a taxi cab, say, or one in an elevator is counted according to the same methodology. The group expects to implement these new standards by the end of this year, enabling commercial ratings by Nielsen and Arbitron going forward.

That is, of course, one critical step toward allowing advertisers to calculate the ROI from this kind of mobile model. A second initiative is creating what DiFranza calls a "back channel where advertisers can translate an ad exposure in an elevator into an action taken by a consumer" -- like clicking through to its website, for example.

Captivate is now in the process of building out its own website, since a person's "next stop" from the elevator is her desk, and the company figures it can provide continuing coverage of news breaks (or advertiser offers) that may have caught a user's attention on the ride upstairs.

Recent tests by Captivate have generated evidence that this strategy will work as long as the value proposition is clear. A $1,000 holiday shopping spree sweepstakes generated 50,000 entrants via the website in a month; and a ski promotion for Mammoth Mountain in L.A. attracted 18 percent of those who viewed it to take advantage of a mid-week lift ticket discount offer.

I recently experienced Captivate's programming in an office building elevator myself, and I was struck by its quality. Unlike many of the digital news operations that rely solely on algorithms, Captivate employs a team of human editors who mold the specific programming mixes and adapt them to each local market, down to the building level.

This ensures quality that a mere RSS feed cannot.

Captivate is an example of a successful media company that established a clear mission for itself, as opposed to throwing up everything at the wall to see what sticks. "In hindsight the main thing we did right," says DiFranza, "was to concentrate on a niche audience and stay true to that."

Best of all -- no more awkward moments in that office elevator.