Forget the skyline billboards blighting the Bund. Daniel Wu, CFO of Shanghai-based Focus Media, sees the world of advertising in a new light û under the track lighting of office building lobbies where target-market CEOs are stuck waiting for elevators to arrive to swoop them up to their offices.

It's a captive audience who û by and large û will do anything to look away from the other suited executive who might want to make small talk. After all, who wants to chat before one's morning dose of caffeine?

So Wu comes to the rescue with Focus Media's liquid-crystal, flat-panel television displays in the lobbies of commercial office buildings, retail chain stores, beauty parlours and country clubs.

This start-up, it's barely 3-years old, claims to be China's leading outdoor TV advertising display company by number of screens. As of June, its network included over 35,000 displays in over 20,000 commercial locations and retail shops in 52 major cities in China û including Beijing, Shanghai, Guangzhou, and Shenzhen û making it the leading out-of-home audio-visual media network in the country. And the company serves more than 900 domestic and international brands and clients, such as Toyota, Bank of China, Nokia, Siemens, Pizza Hut, Motorola, China Telecom and China Mobile Communication.

It listed on the Nasdaq exchange on July 13, after selling 10.1 million shares to US investors (7 million ADR units offered by the company and its selling shareholders offered an additional 3.1 million ADRs to the public). The offering price was $17 per ADR; each ADR represented 10 ordinary shares. Goldman Sachs was the sole bookrunner and the joint-lead manager along with Credit Suisse First Boston in a deal that was 20 times oversubscribed. It priced above its indicative range of $14 to $16, rare in the US, and evidence that investors see the growth potential for the company.

Wu says he now has roughly $100 million to hand to invest û after deducting listing fees and $52.7 million to the selling shareholders. He is using some of that money for general working capital, plus he plans to expand Focus Media's screen network even more û target areas include shopping malls and retail shops such as hypermarkets and supermarkets. He is also acquiring more regional distributors û currently the company operates directly in 22 cities and through regional distributors in 30 others.

Wu's expansion strategy is cautious. When moving into a far-flung area, Wu first pairs up with regional distributors. "These people know the local government; they know the local real estate developers. They have the regional expertise so it's much easier for them to penetrate the market," says Wu.

So there's no point in trying to bypass them and start up the distribution without a local partner. But once the local partner does penetrate the market û and proves itself, Wu swoops in and offers to buy it.

For the investors who purchased shares in the relatively young Focus Media, recent earnings reports are heartening. In August the company announced that its second-quarter profits more than doubled as revenue surged this year. Profit at Focus Media rose $4.3 million from $1.98 million in the same period a year earlier. Sales increased to $14.6 million from $6.4 million. But, investors will have to wait for a dividend.

"We are still in a fast-growing market with many new opportunities. To invest in these new opportunities requires cash," says Wu. "Therefore, we have no plan for dividends in the near future."

Indeed, operating expenses were up in the second quarter as well û totalling $4.3 million from $3.4 million in the first quarter; but the percentage of total revenues in the second quarter was 29.5% compared to 35.2% in the previous quarter. The increase was due to hiring more employees û from 1,111 as of March 31 to 1,649 as of June 30. The new hires are selling more adverts and installing more screens.

Wu says he won't be returning to the market any time soon to raise more money û the IPO cash is sufficient. But expansion possibilities are endless.

"We're offering very different, very new ideas, which actually makes the China market innovative and at the cutting-edge of advertising. You don't see these ideas as much in the US and Europe," he says.

What's new? It's not just the adverts for chic housing (featuring stunning tai tais who evidently live their daily lives in evening gowns) or expensive dining in the upmarket office building lobbies where target-market white-collar, educated executives work.

Novel ideas include putting flat-screen TVs in top-tier golf clubs: Focus Media is in over 150 of the top-end golf clubs across China. The screens are located in waiting areas and where golfers queue up to register û where one might be bored enough to watch a video. If, as a golfer, this doesn't appeal to you û put your advertising executive thinking cap on. Say you want to sell a Callaway Big Bertha golf club, what better place to do it? If you simply want to reach customers with disposable income and exclusive tastes: you've got your captive market.

While Wu has put some monitors inside elevators, a la the ubiquitous Bloomberg monitors in Hong Kong bank buildings, he prefers lobbies û where there is more traffic. And while he has considered putting screens inside taxi cabs, as one increasingly finds in New York and even Macau, Wu reckons you cannot guarantee what customers will flag down a taxi, so it's harder to target advertising.

Because the Focus Media concepts are cutting edge the sales pitch is still one that would stretch Willy Loman. "We've got to give a bit of a discount for advertisers to bet on it," says Wu, noting that an executive who chooses traditional TV "won't be yelled at by his boss" because people perceive it as successful. But for something new, the executive is taking a gamble so "you have to give advertisers an incentive to try it. You have to give them a discount in the short term." But in the long term, he reckons people will realise this is the ultimate in target marketing.

Go into shopping malls, and advertise retail items. Your clothing, cosmetics and home decorating businesses will know that their potential customers are already tuned in. Go into a beauty parlour with flat-screen TV commercials for nail polish, hair colouring and skin care. One simply has to fit the commercial with the setting.

For now, Focus Media is sticking to China. The company has a 20% investment in Focus Media Hong Kong, which also has the rights to distribute in Singapore. And it has a distributor agreement in Taiwan û but Wu's primary focus is the mainland, where offices are springing up across the country and disposable income (and thus consumer target markets) is growing.