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Clubs Have Options to Enhance Their Digital Advertising

OVERLAND PARK, KS — With new equipment purchasing down or non-existent at most clubs, many operators are turning to entertainment systems and interior club signage to spruce up the atmosphere in their facilities.

ClubCom, Pittsburgh, a subsidiary of Zoom Media, Montreal, has had a long-standing relationship with the club industry. That relationship was enhanced this past summer when Zoom Media struck a media and advertising partnership with LA Fitness, Irvine, CA. Zoom Media's reach in the industry is currently 1,600 clubs in the United States and more than 2,500 clubs worldwide.

According to The Nielsen Co.'s Fourth Screen Network Audience Report for first quarter 2010, Zoom Media's fitness network was the highest-ranked fitness network with more than 34.7 million gross monthly digital video ad exposures, an increase of 18 percent from fourth quarter 2009, which had 29.3 million.

Zoom Media, which acquired ClubCom in 2008, includes Gold's Gym, Bally Total Fitness, XSport Fitness, Urban Active and Lifestyle Family Fitness among its other clients.

“We never take any organization's confidential information anywhere else,” says Tom Lapcevic, president of ClubCom. “What we do learn are best practices. We help educate the industry on the best way of promoting a certain product or service at this time of the year based upon the mindset of the population.”

ClubCom focuses on three objectives with club companies: a better member experience, driving the club's business initiatives and generating revenue for the club. A club can display its own advertising in between music videos that are played on TV screens and also on digital signage.

“It's a patented process,” Lapcevic says. “It's an integration of entertainment with digital signage with television communications. It essentially captures the environment. When you walk in, it's what you see on the screens, it's what you hear on the sound systems. If we're going to really captivate the viewership base, that's what you need to do. You have to capture both of those mediums. It creates a habitual process. The members get used to looking that way.”

Lapcevic says that costs to implement ClubCom services vary, depending on the package or packages they choose. Some clubs choose a la carte purchasing for the digital signage package, the overhead entertainment package or the personal viewing programming package. Some clubs choose all three.

Regardless of which service a club chooses, its return on investment will be greatly affected by the elimination of costs and expenses, Lapcevic says. The costs of cable packages would be reduced and overhead music costs would be eliminated if clubs choose a company such as ClubCom for their entertainment services. Also, marketing expenses that previously were earmarked for print handouts and posters on the club walls would be drastically cut as well.

“With digital signage, we digitize that image, we push a button and it broadcasts everywhere,” Lapcevic says. “It's a very powerful but also cost-efficient way of delivering internal marketing and communications.”

Lapcevic adds that companies such as ClubCom can help clubs generate media revenues through advertising that can subsidize the costs of operating the digital systems.

“Even if [club owners] have to hold back a little bit on capital expenditures regarding equipment, [this is] a way of upgrading the overall feel of the environment and the programming,” Lapcevic says. “There's various ways we structure the payments, but over time, this is not an out-of-pocket expense at the end of the day for the clubs once you take into account the revenues that are being generated.”

Other companies have accounts with clubs for their in-house signage and advertising. In February, the Health Club Media Network (HCMN), Woodland Hills, CA, forged a partnership with Town Sports International, New York, to serve its clubs in New York, Boston, Philadelphia and Washington, DC. The HCMN now serves almost 4,000 clubs.

The fitness network unit of RMG Networks, San Francisco, generated almost 14 million monthly digital video ad exposures in first quarter 2010, an increase of 46 percent from fourth quarter 2009, which had 9.5 million. RMG, which has relationships with LA Fitness, Life Time Fitness and Powerhouse Gyms, is in about 700 clubs now and plans to grow to 1,000 clubs by the end of the year, says David Bruce, general manager of the RMG Fitness Network Business unit.

RMG provides live TV programming, with channels that include CNN, MSNBC and CNBC, and can advertise the club during a commercial in addition to providing digital signage throughout the club.

“We see [providing live TV programming] as really the highest-value inventory within the club,” Bruce says. “From an advertiser prospective, being able to essentially deliver a TV product into a club is the highest-quality impression versus something that's static or just audio or [does not have a] great content brand like CNN. There's nothing as impactful as a piece of video.”

Broadcastvision Entertainment (BVE), Thousand Oaks, CA, has products in more than 25,000 locations worldwide, says Kevin Fee of BVE's business development unit. BVE advocates local advertising for clubs rather than national advertising, and local advertisements can be outsourced to local ad agencies, Fee says.

“Local ads can create the feel of neighborhood and community and, thereby, provide a much more relevant experience for the viewer,” Fee says. “National advertising throughout the day bombards us all. What club member viewing a digital signage display during their cardio workout cares about seeing an ad for a major brand of vitamin-enhanced water? It's a waste of their attention and does not provide the targeted connection that digital signage systems can make with customers or enhance their overall club experience.”

Fee says digital signage from BVE can be as low as $799 for a player and software package at a non-subscription platform. Display costs vary based on the size of the screens.

Advertising and club signage are not confined solely to the cardio area. Other places, such as the reception area, locker rooms and personal training areas, provide opportunities to reach members, Fee says.

“If not designed properly, there could be an entertainment overload in some areas of the facility,” Fee says. “We have had many clients go with a simpler, less expensive and more targeted experience rather than implementing costly products and features that allow the user to surf the Internet, e-mail, download music and play video games. The importance of entertainment is well-known, but you don't have to spend a lot of money to see a return on your investment.”

Like Lapcevic, Fee says entertainment companies can help clubs' return on investment through digital signage that can help lift sales for ancillary revenue streams, such as Pilates, personal training or the pro shop.

“The clubs that see the most ROI are the clubs that choose to sell third-party advertising spots to local businesses at a recurring monthly fee in combination with advertising additional services offered in the club,” Fee says. “These clubs have also made a conscious effort to reduce the amount of hard copy [paper] advertising distributed in the club.”

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