Thursday, October 30, 2008

Some Tips for Building Your Digital Signage Business

We've been hearing so much about folks in the industry having trouble getting financing, compelling customers to go through with planned projects and even getting senior execs to approve supposedly "pre-approved" budgets. While I don't think there's going to be a quick-and-easy solution to any of these things (thanks a lot sub-prime borrowers and greedy lenders) a bunch of us will be meeting up in Chicago in a few weeks trying to figure out how to help people get through the economic mess we're in right now.

The event is the Strategy Institute's "Building Your Digital Signage Business" seminar, and as the title suggests, it's designed to address all sorts of concerns about actually making a business out of all the hype in this silly industry. (Disclaimer: I'm speaking at this event, but it's the very last session of the 2nd day, so there will probably be about 8 people left in the audience at that point -- but I'll be around the rest of the time to chat if anyone's interested!).

Realizing that there are probably a lot of people out there who need a little extra help getting going these days (or staying going, for that matter), conference organizer David Laird has been tweaking each conference session to provide the maximum benefit for:

  • Digital Signage Integrators: If you think that digital signage could be a growth area for their businesses, the conference will help you to understand which clients will be most interested and provide strategies for selling and rolling out large deployments;
  • Venues Interested in Hosting Digital Signs: We'll shed some light on the different digital signage business models out there, and explain the best way to work with suppliers and vendors;
  • Digital Signage Network Owners: There will be sessions exploring ways to increase ad spends and giving you a better idea of what makes a media planner tick;
  • Digital Signage Hardware and Software Suppliers: The biggest benefit here is networking - you'll have plenty of opportunities to connect with Integrators and Digital OOH Networks to partner on the next deployment and (potentially) win new clients;
  • Mobile Media Companies: With the 'Outernet' upon us and smart phones and PDAs acting as a bridge to digital signage networks, you'll learn about the new business opportunities that these networks enable;
  • Investors (of all sorts): Connect with senior executives about buying, selling or partnering in a digital signage business, and learn about past deals and market trends from those of us who won't be trying to take the money right out of your pockets;
  • Traditional Billboard/Poster Advertising Owners: With advertising dollars sometimes growing by large multiples in digital billboards, find out how this business model works for you;

You're probably not going to walk out of the conference with a dozen new advertisers for your network or a check for $10 million, but you probably will meet a lot of people who have faced the same problems that you're facing, have found solutions to them, and are now looking for new ways to grow, even in this challenging environment.

As always when I go to these things, I'll post an update and my own impressions of the conference after it's over -- if it sucks I'll let you know.  But having gone to "Building Your Digital Signage Business" several times in past years, it has generally been one of the most practical and useful conferences I've gone to.  If you're struggling with your digital signage business and feel like you could use some direction -- or even just some empathetic camaraderie -- you might want to check this one out.

Not the tips you're looking for? The best list around is at WireSpring's Digital Signage Journal.

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Wednesday, October 29, 2008

OVAB releases audience measurement guidelines

Thanks for Dave Haynes for the tip up on this. OVAB has just released their long awaited audience measurement guidelines (PDF link), and at 78 pages they're certainly being thorough about it.  I wasn't up in New York for the conference today, but tried to follow Manolo Almagro's Twitter feed about it.  Thankfully I wasn't doing it on my mobile phone, or the unending plethora of SMS messages would have cost me a fortune on my phone bill this month.

While I expect to do some more in-depth analysis of the report on the WireSpring blog later this week, the long and the short of it is that OVAB is advocating that the "Average Unit Audience should be the currency metric for out-of-home video networks. Average Unit Audience is defined as the number and type of people exposed to the media vehicle with an opportunity to see a unit of time equal to the typical advertising unit."

Without yet knowing what the "typical advertising unit" is, or how one might define the "type" of people exposed to the media, I can't yet comment on feasibility or completeness.  However, measurement guidelines has been the driving goal of OVAB since the group's inception, so I'm sure they've thought through a lot of this stuff more than I have.

So will the guidelines be a universally-accepted starting-off point for media buyers and network owners alike? Or is it just another piece of group-think rhetoric?

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Adspace says advertisers see 38% sales lift

... ok, a 38% promotional lift in one particular case -- but that's a start, right? ;)

In today's press release, mall digital signage network operator Adspace recounts that, "a recent test in 12 shopping centers with the Adspace Digital Mall Network showed that when a major anchor department store discounted $145 Cole Haan men's loafers to $99, Adspace increased promotional lift 38 percent"  The test was done against a control group of malls that had similar traffic and demographics, also ran the Cole Haan sale, but did NOT advertise it on the digital signage network (in those malls, the store saw net sales lift of 15.1%. Stores in malls that did advertise on the screens saw lifts of 20.8%).

Curiously, the press release also notes how people tend to shop in malls less frequently during times of economic hardship. While they try to play that up as yet another reason for lease-bound mall tenants to advertise on the screens, I have to suspect that less traffic = less money for Adspace and everybody else who makes their living inside of shopping malls.

Still, I have to wish them the best. I also wish that they and others would run more split-test experiments like this, and let us know the details.

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Tuesday, October 28, 2008

Are digital signs getting creepy? Is mainstream media just waking up?

Another day, another reference to digital signage approaching something in Minority Report. This article is suspiciously similar to the last article stating that a 'Minority Report-like experience is only 5-10 years away.'


(that's way more efficient than typing it out every time).

PQ, MMI say good things in store for the digital signage market

Not one but two reputable research companies have put their stamp of approval on the digital signage industry in the past week, which surely means that they both must be right, right?

First, PQ Media came out suggesting that the digital signage market will continue with double-digit growth, despite the economic slowdown expected in 2009:

While the industry's growth this year will decelerate from 24.5% in 2007, PQ Media forecasts digital OOH spending in the U.S. to grow at a compound annual rate of 12.9% from 2007 to 2012.

In the first foray into the global digital OOH market, PQ Media found that spending worldwide will grow 12.8% to $6.11 billion in 2008, slowing from 22.6% last year, but forecast to expand 14.5% from 2007 to 2012. The U.S. accounts for nearly 40% of global digital OOH spending, but its share will decline over the next several years, according to Global Digital Out-of-Home Media Forecast 2008-2012.

  • U.S. spending on video ad networks, the largest segment, is on track to expand 8.1% in 2008
  • This growth will decelerate in 2009 before returning to double-digit growth in 2010
  • Digital billboards remains the fastest-growing segment, albeit slower in 2008, posting growth of 28.2%
  • Growth for digital billboards is expected to remain in the 20% range through 2012.
  • Ambient ad platforms will grow 6.8% in 2008.
  • U.S. digital OOH spending grew 23.1% on a compound annual basis from 2002-2007, exceeding 20% growth each year of the period.
As if to further inflate market expectations, MultiMedia Intelligence, another research agency, announced that, "the digital signage market continues its growth as the market consumes 1.1 million displays in 2008... an increase in display shipments of 34% over 2007 [that by] 2012 will consume nearly 2.3 million displays."

MultiMedia Intelligence's new research also found that:
  • Current global economic weakness will sap growth between 2008 and 2009, but 2010 returns to strong double-digit growth.
  • Ethernet is by far the dominant connection interface. HDMI and cellular will become increasingly significant.
  • China overtook the USA as the top digital signage consumer, driven by preparations for the 2008 Olympics.
  • Retail, transportation and restaurants and bars are the top 3 digital signage verticals. Education and corporate communications verticals are making impressive gains.
  • Digital signage is increasingly driven by digital media adapters rather than PCs. Digital media adapters will exceed PCs in 2009.
  • Roughly 8% of digital displays have embedded TV Tuners, with ATSC, DVB and country-specific standards competing for leadership.
  • Although hard disk drives dominate the market, solid state drives are making in-roads.
Here at HQ, the first half of 2008 was fantastic -- lead volume was way up, prospect quality dramatically improved, and many long-term pilots turned into full deployments.  However, around mid-August (which is normally slow anyway), we started seeing a noticeable decline in activities that required, you know, paying for stuff. There are still plenty of entrepreneurs out there, and the number of small rollouts and pilots appears to be unaffected for the moment, but the number of large companies segmenting off a portion of their budgets to try out a new marketing program with digital signs seems to have flattened.

Cash is king right now, and there's no question that many companies are stashing it under giant corporate mattresses right now rather than actually spending it, but I personally believe that this global economic slowdown is going to have significant and protracted effects on the overall market.  Could we see double-digit growth in 2009? Yeah, but I expect it to be more in the 10-15% range than in the 20%+ range as these researchers believe.


Monday, October 27, 2008

Would you pay $10/month for audience measurement?

I got a press release in my email this morning from TruMedia, one of the myriad audience measurement companies that have come about in the last 2-3 years. Recognizing that high cost is a common complaint from many folks considering implementing a gaze-tracking measurement system (and probably  feeling the pinch of the economic downturn to boot), the company announced a new software-only based product that they'll sell to you for $9.95/month per camera. The system uses regular USB webcams as opposed to their more expensive (and complete) standard offering, so this is a pure-price play.

My question is, will it work?  I did an article a few months ago on the WireSpring Digital Signage Blog about this very topic -- what will people be willing to pay for audience measurement? Based on an admittedly far-too-simplistic calculation of what other media pay for measurement services and our own (2007) budget for installing a digital signage network, my conclusion was that it should cost between $1.10 and $9.90 per channel per year.  That's, of course, assuming that our measurement costs were proportional to those for television, radio and billboards.  My own gut feeling at the end of the article was that, "I think virtually everyone would pay $10/channel/year for solid metrics
that could be used to justify higher inventory prices, sell more spots,
or both."

The rub, of course, is that this is only about 8% of the cost of TruMedia's low-price offering on an annualized basis. But $10/screen/month will probably attract a lot of attention from smaller networks that were hoping to do some kind of real-time measurement but found the current array of offerings too complex, too expensive, or (probably) both.

What about you? Would you pay $10/screen/month for measurement? What about $10/screen/year? What about something in between?

Thursday, October 23, 2008

Reactrix, Petters, and a little catching up...

It's been busy here at HQ, so I'm sorry for the lack of action on this blog. Fortunately though, there seems to be very little real news in our space right now, so I haven't missed much. Wait... That's not a good thing at all. Maybe this whole economic crisis I keep hearing about on the news has some legs to it?

Regardless, there are two things I thought I'd briefly comment on. First, by popular request, is my take on the implosion of Reactrix.

RIP Reactrix

Ah Reactrix, we hardly knew ye. News of the implosion of the firm started a few weeks ago when Adrian over at DailyDOOH mentioned that "the first, pretty large in this instance, US based Digital Signage vendor has bitten the dust" and there was a great deal of speculation about who it could be. Many top names were thrown around (thankfully WireSpring dodged the bullet there :), and eventually the "winner" of the guessing game was Reactrix... At which point everybody guessing in the comments let out a collective "what? I thought you said they were pretty large??"

While Reactrix did burn through an awful lot of cash ($85M), they hardly had a big footprint, and they had practically no brand presence, at least if you ask me. Their technology was very cool and made for a terrific demo, but at the end of the day content production costs were ridiculous and most of the 120+ installations had full-time staffers present, making ongoing operations extremely expensive. (For those of you who haven't seen these systems before, they're large projected images on floors that users can interact with by walking on them and making body gestures).

The tech might be worth something to somebody, somewhere, but since Reactrix started up many more gestural technologies have become available, so it's going to be hard finding a competitive advantage there. Small company (footprint- and impact-wise). Big company (spending-wise). Apparently a very small company (revenue-wise). That's a tough combination to live through in any economic climate, let alone this one.

On the Petters Group

The other item I've been getting a lot of email inquiries about is this deal/mess/whatever with the Petters Group, notable in this industry only because they own a big chunk of BroadSign (full disclosure: BroadSign is a direct competitor of WireSpring, and Dave Haynes is my arch-nemesis in the blogging world -- and since he has a moustache, I think it's obvious which one of us is the evil one). In any event, the founder of Petters Group, Tom Petters, has been accused of running a $3 billion fraud scheme via their venture capital arm. He's has been arrested and will be showing up soon at a federal court near you.

Petters's venture capital fund was a significant source of funding to BroadSign at some point in time. Since all assets of Petters Group have been frozen, I suspect, but cannot confirm, that any funds that weren't already disbursed to any client companies including BroadSign have been cut off. And that's... it.

I seriously doubt that anybody at BroadSign had any knowledge of, or involvement in, the alleged fraud. I don't know anything about BroadSign's financial situation (and I don't want to speculate). And while I wouldn't recommend you go and use their software (you did read the above disclaimer, right?), it has nothing to do with the current Petters situation.

One final note: I do think that some degree of failure and consolidation is inevitable. It has nothing to do with the current financial climate (though that will no doubt accelerate things), but rather is a simple function of our market's size and the number of players in it. However, I certainly understand that these failures and closures mean that value is being destroyed and jobs are being lost. That's no fun in any economy, but it'll probably feel a lot worse for those people whose money or jobs were lost in this one.

Thursday, October 16, 2008

Today's Customer Privacy Doomsday Scenario is Brought to You by IMM

I'm pretty sure I've run across this technology before (and certainly it's pretty similar to Arbitron's Personal People Meters), but for some reason when the WSJ starts talking about it, I start getting antsy:
A small media research company called Integrated Media Measurement is trying to bridge that research gap with a new technology that measures consumers' exposure to the audio in ads on television, radio, computers, mobile phones, DVDs and inside a movie theatre -- using a consumer's cellphone.

IMMI embeds its software into the cellphones of the company's 4,900 panelists. The software picks up audio from an ad or a TV show and converts it into its own digital code that is then uploaded into an IMMI database, which includes codes for media content such as TV shows, commercials, movies and songs.

IMMI's database then figures out what the cellphone was exposed to by matching the code. Cellphone conversations and background noise are filtered out by the software, IMMI says, since there is no "match" in the IMMI database.
Like I said, it sounds like the Personal People Meter, right? Well, "yes" and "no".  "Yes" in that consumers are walking around with electronic tracking devices that can scan for audio patterns and figure out media exposure from that.  "No" in that instead of carrying around a single-purpose given to you by a well-known marketing firm, the tracking is now taking place on the cellphone that's probably in your pocket or on your desk or table right now.

Of course today's users of IMM's software know that they're installing something on their phones and PDAs -- the program appears to be strictly opt-in. The initial panel is also quite small at around 4,900 people.  However, it's not hard to imagine a scenario where the firm would partner with a major carrier and offer subsidized cell plans in exchange for leaving the monitoring software switched on.  Rather than hype the source of these "discounted" plans, I'd be willing to guess that the carriers will instead bury the technical details in a gigantic End User License Agreement that nobody will ever read, just as is currently done with software products that embed tracking software. Suddenly, potentially millions of people's media consumption habits could be tracked without violating a single law (assuming that signing off on a EULA is akin to giving consent to conversation recording, or something like that).

The future doesn't have to play out this way, and it would be nice to think that we can count on the outstanding business ethics of these and other firms to keep consumers from unknowningly giving up more than they have to.

Personally, though, I think I'll be reading my EULAs a bit more closely from now on.

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Wednesday, October 15, 2008

The morning press - digital signage news for October 15

Here are some of today's interesting clips from the web:

  • Intava Introduces Audience Measurement Technology - The tool tracks consumers' faces as they look at interactive displays. It's thus in the company of many other companies doing the same thing. Hopefully theirs will work a bit better than the current spate of "solutions".

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Looking for more digital signage info? Check out WireSpring's Kiosk and Digital Signage blog for in-depth industry analysis and even more news about the digital signage industry. While you're there, feel free to read up on our digital signage software and services

Wednesday, October 08, 2008

The morning press - digital signage news for October 8

Here are some of today's interesting clips from the web:
  • Outdoor digital ads have 70% recall - A survey conducted exclusively for Out Of Home Media (India) Pvt. Ltd, found that the average weekly reach of the company’s network in Mumbai, New Delhi, Bangalore and Pune totalled 5.46 million people, with more than 70% of them recalling the OOH screen.
  • Flyte Systems and DisplayIQ Install Live Airline Information at Two Hotels - Flyte Systems is the only company that provides real-time airline departure information. Hotels implementing Flyte Systems airline information on the DisplayIQ interactive digital signage platform are the Fairmont Chicago and the Hyatt Regency Phoenix. A third installation is anticipated at a Ritz Carlton property by year end.
  • Channel M Rolls Out Its First Bilingual In-Store TV Network - Channel M is rolling out a new in-store network for PLS Check Cashers, one of the nation’s oldest and largest check cashing establishments. Advertising and programming on the network, installed across the country at PLS Check Cashers stores, will be offered in both English and Spanish to reflect customer demographics and language preferences.

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Looking for more digital signage info? Check out WireSpring's Kiosk and Digital Signage blog for in-depth industry analysis and even more news about the digital signage industry. While you're there, feel free to read up on our digital signage software and services

Tuesday, October 07, 2008

Dubai to install thte world's biggest electronic billboard

Those folks in Dubai don't do anything small. And apparently that goes for digital billboards too. According to this story at The Inquirer, "Dubai-based construction company Tameer is boasting that it's about to build the world's largest LED screen, which will cover the entire 100m x 20m facade of Podium, the latest landmark office block to pop up in the desert Kingdom's Majan district."

Watch this space for notice of the "world's biggest blue screen of death" once this thing gets turned on.

Monday, October 06, 2008

Titan Worldwide to implement big digital out-of-home signage network

Being able to plunk down $90 million on a speculative project during the worst economic times since the Great Depression is an indicator of extreme confidence, borderline insanity, or, possibly, both.  But that's precisely what Titan Worldwide has announced they're doing, as this press release notes that, "by the end of 2008, brand new breeds of digital signs will start to change the way brands advertise to consumers and how consumers respond to advertising in the United States, United Kingdom and Ireland. Starting in the key U.S. markets and London (with Ireland and Canada to follow soon) Titan Worldwide will rollout digital signs across its bus, rail and subway portfolio."

Titan's Lou Giacalone, formerly of AdSpace/CoolSign fame, has been working on this project for a long while now -- I think I first spoke to him about it a year or so ago.  He was even able to get a room full of people to start talking about technology standards back at DSE 2008 -- an effort which has yielded the POPAI Digital Signage Standards group, which is very busily working away at integration and interoperability documents right now.

One wonders, though. With Giacalone at the helm, will Titan funnel a couple of extra bucks to Planar to reconnect him with his old brainchild?  After all, if they can spend $90M on a network, what's another $20M for a dysfunctional software company?

I kid, I kid...

In all seriousness, the company is deploying a number of interesting formats, including:

Bus Digital Kings -- King size 12-foot displays that use the latest LED and GPS technology.

Platform Displays -- Large HD screens that will form one the largest pieces of Titan's digital rollout with over 1,200 planned in Chicago alone.

Interior Rail Displays -- Titan will also offer large commuting audiences the opportunity to be engaged and entertained within the trains with large HD, GPS-enabled displays.

Urban Panels -- Titan's street-level subway displays with HD screens on both sides of the display.

U.K. Rail 6 sheets -- Over 100 digital D6's (6 ft x 4 ft) in some of London's busiest rail locations.

The company plans to allow for geolocalized content (thanks to embedded GPS sensors), as well as the usual dayparting, etc. They also plan to run ads on all of the screens, since that's their business, but some entertainment and informational stuff on the smaller screens as well.

As to whether all of this fancy stuff will work, Titan is already a pretty big player in the outdoor marketing world, so they probably have a good handle on the sales side of things. That makes this deal more akin to Clear Channel's electronic billboard network, and we know those things are crazy profitable once you amortize the cost of the screens.

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The debate on gas station digital signage continues

So just a week after finding out what the WSJ's Brian Carney thinks about forecourt advertising by digital signage network GSTV, sister network C-Store TV seems to suggest that most people don't agree with him. At least, that's how I'd read this quote from a recent press release:
"Our Nielsen Media Research has proven consumers enjoy and value the Gas Station TV experience as nearly 80 percent of survey respondents call Gas Station TV a good source for product information and almost 90 percent state they want to watch again," said Leider. "This type of consumer engagement has demonstrated how Gas Station TV can help gas retailers enhance their image and product sales."
I've stated before that I'm not a fan of these systems personally, and I've heard from a number of you stating similar opinions. But if there are any readers who do like forecourt advertising and pump-top digital screen networks, I'd love to hear from you. Are you one of these Nielsen data points that appreciates gas pump advertising? Let me know what you like about it, what you'd like to see more of, or what you'd like to change!

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In-store activities consistently rank highest in ROI study

Ad Age is trying to make the best of the bad economic situation here by taking a look at which marketing activities seem to deliver the best results and bang-for-your-buck. Not surprisingly, shopper marketing and in-store activities were ranked first by both product manufacturers and retailers, indicating that, much like my own recent guess about the value of digital signage, etc. versus other media:
A recent survey by Deloitte Consulting and the Grocery Manufacturers Association, in fact, gives shopper marketing higher marks for return on investment than most conventional media. It also found that big package-goods marketers are jumping on the shopper-marketing bandwagon fast, and players who had lingered on the sidelines are ramping up quickly. But retailers are ramping up their own shopper-marketing departments even faster, the survey found -- creating a crush for the same relatively small pool of experienced talent.
Unfortunately, while everybody agrees that shopper marketing is useful and efficient, few agree on what  shopper marketing actually means. Consequently, packaging, merchandising, trade promotion and a whole bunch of other related things sometimes get lumped into that category, and sometimes don't.  Further, it's not totally clear what role retail media networks play in today's typical shopper marketing solutions (again, sometimes they're included -- particularly if they already exist already -- and sometimes they aren't).

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