One Times Square: what advertisers need to know about the renovation of OOH’s epicenter
The iconic building is home to some of the most in-demand ad space on Earth. For The Drum’s Out-of-Home Deep Dive, we take a closer look at its $500m web3-focused makeover.
Times Square is entering a new era of hybridization / Jamestown Properties
One Times Square – the famed wedge-shaped skyscraper located in the heart of Manhattan’s Times Square that hosts the annual New Year’s Eve ‘ball drop’ – is getting a $500m makeover.
The neo-gothic building was erected in 1904 and is perhaps the most iconic piece of real estate in the tourist-packed commercial intersection. It originally served as home to the New York Times, where the newspaper was able to seamlessly distribute copies to morning commuters passing through the subway lines under the building.
But the building’s commercial and cultural significance is deeper still: it is home to some of the most sought-after ad space in the world. Times Square has always been ground zero for the world of out-of-home advertising and plans to give One Times Square a facelift are sure to make the space even more competitive for brands hoping to get in front of some of the nearly 300,000 consumers who pass through the intersection on foot each day.
The building’s owner, Jamestown Properties, plans to add a new subway entrance, build out a hyper-modern observation deck, revamp the facade’s digital billboards and revitalize the interior of the building (which has been largely empty since the 1970s), leasing out about 10 floors to brands for custom full- or half-floor immersive experiences. Brands such as long-time One Times Square partner Kia will be invited to create hybrid physical-digital experiences with multimedia AR and VR features for visitors to explore.
“The unique value proposition of the building is kind of fusing the intersection of digital and physical in terms of being able to experience it in person, being able to broadcast content through social media and reverbs of people posting content, but also through direct streaming [of that content],” says Michael Phillips, president of Jamestown Properties.
He hopes that brands will maximize spend on both the building’s interior and exterior. “In order to make the stickiest, most lasting impression, [brands should think], ‘How do we create an experience inside the building where you can learn about the brand values of a business, gamify for rewards, engage with the brand and be part of creating something like a new product?’ And then on the outside of the building, the brand is broadcasting [a message] in signage, but also virtually and through the metaverse to have a concurrent experience for people from around the world. It is the crossroads of digital and physical with an entertainment retail component, but also sort of a gamified experience.”
The project represents one of the most significant shifts in OOH from a strictly physical ecosystem toward a more hybridized model. And it builds on Jamestown’s evolving vision for Times Square; last year, it teamed up with Decentraland to create a metaverse version of One Times Square. Then, earlier this year, it produced ‘Concrete Jungle’, an immersive AR experience with five unique viewing zones within the square, a number of virtual games and photo ops that encouraged visitors to interact with the environment in physical and digital ways.
Now, emergent web3 technologies will become increasingly woven into the physical real estate at the OOH industry’s heart. It’s a sea change with far-reaching implications for advertisers of all sizes. And it’s happening at an especially critical juncture for both technological advancement and the global economy.
Four groups of spenders
The redevelopment of One Times Square is likely to up the appeal for brands, many of which already see the building as aspirational ad space. “If you’re looking to make a major statement in Times Square, you want to be on One Times Square,” says Brian Rappaport, CEO of OOH agency Quan Media Group. “It’s the best screen in the entire square.”
As Rapparport sees it, there have historically been two groups of brands that find value in a Times Square buy. In the first group are heavyweights who aren’t afraid of commitment. Spotify, for instance, has leased a long-term spot on One Times Square – every Friday, artists’ faces are plastered on the building to promote the streaming giant’s ‘New Music Friday’ playlist.
In the second group are those that, as Rappaport puts it, “are looking for a PR stunt.” They want to make a big splash, but may not have the resources to buy a spot for longer than a day or a week. “They want to do something that they can amplify on social and [share with] the press. Maybe it’s taking over six or seven screens in the square for one hour, which is called a ‘roadblock.’”
Matei Psatta is the co-founder and CMO of Blindspot, a platform he describes as “Airbnb for billboards” – in essence, a self-service tool that brands can use to make their own OOH buys. Although Blindspot counts major brands such as Morning Brew, TikTok and Go Daddy among its clientele, the majority of its roster consists of mid-sized startups that have raised anything north of about $10m. Psatta suggests that many of the players in this range are creating an emergent third group of brands finding value in Times Square and similar hubs of OOH advertising. These types of brands are “very test-focused,” he says, and are increasingly interested in making short-term OOH buys to assess the performance of different types of media and creative.
He thinks it’s a wise bet, too. “Short flights are brilliant, because that means you get to test more. People are realizing there is a problem with ‘banner blindness’ in out-of-home if you run the same visual for months on end,” he explains. “So they’re doing smaller campaigns [or] they’re doing multiple campaigns in a month, but they’re trying different stuff. They’re trying new creative – some are doing static, some are doing cinemagraphs. Some are combining it with audio programming. People [used to] say ‘There’s only one way of doing things because this is such an old school channel. You either do it this way or it’s not the right way.’ But now, because there are so many opportunities, people have finally accepted that you have to try things out.”
A final fourth group, Psatta says, are relative category newcomers seeking to establish trust among consumers. For example, he says: “Last year, during the crypto boom, the majority of crypto clients were booking the Nasdaq screen and One Time Square and what is now Midtown Financial or ‘The Beast’ [screen]… coming through us. And they were using it just to give legitimacy to the project. They were picking Times Square as a way of saying, ‘We’re the real deal. We’re not just some kids on a college campus coding the hell out of our app – it’s actually a reliable business.’” Once these kinds of brands make an impact in Times Square, he says, they will then begin diversifying their media spend and become more strategic in their marketing efforts.
And a growing number of brands are falling into these latter three categories (which see plenty of overlap) – they are seeking flashy and ephemeral Instagrammable moments, test-and-learn opportunities or top-of-funnel trust-building. “Shorter engagement and more kinds of engagement have been in great demand by advertisers,” says Jamestown’s Phillips.
And Times Square is, of course, the optimal location to use ad spend in this way, with some 120 million people traversing the square on foot each year.
Stretching brand dollars in Times Square
Of course, even short-term buys can be expensive in Times Square. But as demand wanes for the longer-term buyouts that defined the previous era (Nissin Foods famously operated a Cup Noodles billboard with a ‘steam’ effect on One Times Square from 1996 to 2006), the market is becoming more favorable to smaller brands and short-term buys.
“For Times Square, the general perception is it costs so much money to be there. But if you want to have a presence there or have that singular iconic brand moment, you have to be able to get creative,” says Rappaport. “Maybe you buy a great screen for one day. Maybe you do a roadblock for half an hour. And obviously you get coverage of it – you’re able to push it out on social. You don’t need to be in the square for four weeks.”
He suggests that even brands on a budget can maximize their dollar’s reach in Times Square if they’re clever about it. “If you’re smart and strategic, you could spend minimal but have a large impact,” he says.
For Phillips, being strategic entails taking a data-driven approach to media planning and buying. “There are strong ad space networks and with programmatic [OOH buying], you are able to turn on and turn off at a moment’s notice and buy based off of certain IRL events, whether it’s weather triggers, time of day or certain events.”
Plus, Psatta points out that brands on even tighter budgets can tap into a range of opportunities to make a splash in the square. He explains that some clients opt for smaller street-level Link NYC billboards or rent LED-outfitted trucks that can be driven around the square and have been proven to have both high affinity and high visibility. “There’s always a way to figure out the right to the right mix between budget and impact.”
The new era of OOH
As brands find new ways to make the most of their spend in Times Square, another trend is also informing the direction of OOH media: the emergence of web3 and the rise of integrated digital experiences.
It’s a shift that the industry has seen accelerate over the course of the last year or so, with heavyweight brands including Meta, Subway and the recently disgraced fashion house Balenciaga creating immersive 3D billboards across the world and brands such as Hong Kong telecoms provider CSL teaming up with boy band Mirror to launch interactive AR campaigns.
The redevelopment of One Times Square, the nucleus of the OOH world, will only propel the shift toward more interconnected, web3-focused brand experiences. And Phillips, for his part, is convinced of the role that new AR/VR and metaverse activations inside the building will play in brand growth – especially considering that many such experiences could potentially engage both in-person visitors and distributed online users. “As we move to web3, we move out of a two-dimensional search into a three-dimensional engagement with search and that’s a really valuable tool for any physical place to present itself in a twinned way,” he says. “[Brands will] be able to provide unique experiences to people who may not ever get there physically, but have an affinity for what it is and a curiosity to learn more.”
He argues that the industry is witnessing an increasing focus on engagement – and interactive engagement in particular. It’s the driving force behind what he calls the “gamification of everything,” from the rise of contemporary metaverse-like gaming spaces such as Roblox to the proliferation of QR code-based marketing and interactive connected TV ads. “Dwell times are longer and engagement is deeper. People are engaging in terms of experiences… and if we can provide that in the physical realm as well as in the metaverse and the virtual realm, it’s a magic combination.”
It’s a momentum that OOH is especially well-positioned to capture. At a time when other channels are already seeing a drop in ad revenues amid widespread economic uncertainty, Rappaport says OOH is somewhat “recession-proof.” His agency, Quan, hasn’t seen a significant decline in spend from brands of any size, despite the threat of a potential recession looming, he says.
“Sure, we’ve had one or two digitally-native brands pull back spend for a little bit because… they want to be a little bit more conservative with marketing dollars, but overall, in talking to friends in the holding company world as well as fellow independent agencies and friends on the sales side, there has been zero slowdown as it relates to out-of-home. And I think that’s also why you’ve seen such a strong resurgence in Times Square. It’s always going to be the epicenter of the out-of-home industry.”
One Times Square, in particular, is doing especially well; Phillips says that ad revenues are up 156% over pre-pandemic numbers, suggesting that even in periods of economic turbulence, brands are willing to spend – and spend big – on the hottest OOH real estate on Earth.
Some are so bullish on OOH innovation that they truly believe the sky’s the limit. As Scott Krantz, CEO of digital billboard network Wow Media, puts it: “My prediction is that OOH will eventually move to the skies and become as commonplace as the stars.”
From the wow factor of 3D billboards to ads that grab people at literally the right time and place, innovation in out-of-home is soaring. Find out more in our latest Deep Dive.