VisionChina Renews Digital Ad Contract - Analyst Blog

VisionChina Media Inc. VISN recently announced the renewal of a contract to continue operations of its mobile digital television advertising network in Wuhan, China.

The agreement provides for the continuation of digital mobile television advertising services on buses in Wuhan. With this deal, VisionChina is expected to get the bulk of digital mobile television advertising revenues, (which account for 90% of the total advertising revenue in Wuhan) as it will be the sole operator of such services.

According to the Wuhan Bureau of Statistics, Wuhan ranked ninth in terms of GDP among all cities in China with a total GDP of $145 billion in 2013. The new contract is expected to reduce the company's media cost by 46.7% year over year in the region. The strategic move is aimed to strengthen its competitive cost structure, while improving margins and operating efficiency in the forthcoming quarters.

With rapid strides in the digital arena, the future appears bright and advertisers that embrace these opportunities will be able to deliver a cost-efficient, cutting edge digital campaign across its channels. The TV advertisers need to ensure that their content is relevant and engages their target audiences, as a paradigm shift to mobile platform is observed in the digital marketing industry.

As one of the largest out-of-home advertising networks, VisionChina provides digital mobile television broadcasts to deliver content and advertising to displays on mass transportation systems such as buses and subway networks, network delivers real-time programming including news briefs, stock market updates, weather and traffic information, sports highlights and entertainment shows mixed with TV advertisements.

VisionChina currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering now include Marin Software Inc. MRIN and MDC Partners Inc. MDCA and NV5 Holdings, Inc. (NVEE), each carrying a Zacks Rank #2 (Buy).