A few days ago USA Today published an article on out-of-home media company RippleTV, who places free digital signs into regional/local chains with a focus on local advertising. The firm is up to about 300 locations all in the southern California region right now, mostly consisting of about 200 Coffee Bean stores and 100 Jiffy Lubes, though the article noted that the QSR Jack in the Box just joined, which could increase their footprint considerably.
Demonstrating somebody's lack of understanding about the out-of-home advertising market (and it's unclear whether it's USA Today's or RippleTV's), noted competitors include, "Gas Station TV, which puts TV ads on gas station pumps... Wal-Mart TV Network lets advertisers run messages in the retailer's stores... [and] Captivate, [who] shows news and information to workers in lobbies and elevators." It's a pretty big leap to assume that your spot for a local dry cleaners running in a selection of Coffee Bean stores is really in direct competition for advertising dollars with a nationwide spot for some P&G product running on Wal-Mart TV, but there you go. Actually, that idea might deserve a bit more explanation: it's easy to assume that alternative out-of-home media compete with each other for ad dollars. However, this isn't really the case at all. Today, when a dollar gets spent on some funky out-of-home promotion, a digital signage campaign, or anything else nontraditional and below-the-line (in marketer speak), that dollar is almost certainly being taken away from TV or print ads, both of which have shown declining effectiveness in recent years (TV more so than many print publications).
That nitpick aside, I thought the most interesting part of the article was a description of Ripple's business model:
The idea of scaling price structures with the number of screens is obviously not new, but the article almost makes it sound as if individual locations become more valuable when other same-branded locations are added to the available pool, which doesn't make any sense. More than likely I'm just reading that wrong, or it was incorrectly described. That would make sense if customers were buying chain-wide and were paying on some kind of CPM basis, but it sounds like the ads are being paid for more like POP displays or posters, which is on a per-location, per-use basis (which certainly makes the most sense to me).
Ripple offers advertisers a self-serve set-up. Companies register at Ripple's website — rippletv.com — then create or upload their image ad. The process is similar to posting videos or pictures at sites such as YouTube and MySpace. They can also can manage campaigns online, choosing stores where they want to advertise.
Advertising rates start at $18 weekly for a local Jiffy Lube to $40 weekly for a single Coffee Bean. They rise when more locations are added. Unlike on TV, the ads are guaranteed to run every five minutes.
Ripple's deal with businesses promises a free 50-inch LCD flat-screen TV and entertainment for customers. The Ripple network shows information from CBS, E Entertainment Network, ESPN and Yahoo.
The businesses also share in the advertising revenue, and dictate which kinds of companies can be promoted in their stores. For instance, Jack in the Box asked that rival hamburger chains be excluded.
Ripple's challenge is making money. The company isn't yet profitable, and its rates are so low, it will take some time to turn a profit.
Has anybody used this network? Can anybody clarify the payment schedule and any anecdotal performance metrics?
Tags: Ripple TV, digital signage, out-of-home advertising