Gorrie's story: the $10M deal (or: how advertisers may start ditching above-the-line spots)

Rob Gorrie is kicking off 2009 with a series of great blog posts. Let's hope he finds the time to keep it up for the rest of the year.  If you're not a regular follower of his blog, there's at least one article that you should check out -- an anecdote from a CPG that wanted to re-think their media mix to see what a world without spending money on broadcast TV ads would look like:

In mid December (on a Monday), one of my sales people came to me, extremely excited.  It turned out that a buyer had just called him, panicked, because his client (a CPG - Consumer Packaged Goods) had just told him to cancel all of their broadcast dollars for the following year (or as much as their cancellation clauses allowed). The final number to play with was around 10 million dollars.  The client also said that they wanted a new plan for 2009 that didn’t include radio or TV - at all. Oh - and by the way - they wanted a new plan by Thursday.  We were - of course - more than happy to help out

I don't think manufacturers or retailers are about to start abandoning TV commercials en masse just yet, but whereas in the past such a story would be completely unthinkable, the combination of a crappy economy and decreasing returns on TV ad spending has forced these companies to start looking for alternatives to their old standbys.

Tags: out-of-home advertising, retail media, ooh

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).

Tags: digital signage, retail media, shopper marketing

Coming soon: electronic shelf labels

By now we've probably all seen that guy at trade shows, with a booth full of tiny screens showing itty-bitty digital images and mounted to on mocked up supermarket shelves. I think I've come across this tech at pretty much every major industry show I've gone to in the past five years. But I've yet to see a single deployment.

According to some news from BizJournals, that may change soon, thanks to a $52M cash injection by Galleon Group into electronic shelf label pioneer Altierre Corp. And given how cheap tech is getting and how expensive labor (and everything else) continues to become, it looks like the time for such a seemingly-overkill system might finally have come. The article notes:

The technology would eliminate the paper labels that are often changed weekly in grocery stores, freeing up workers and reducing paper waste, says CEO Sunit Saxena. ESL would also eliminate discrepancies between the shelf and cash-register prices and allow the flexibility to make immediate price changes, he says.

"You've got a poor store manager trying to orchestrate the changing prices of 40,000 products, and they just can't do it," Saxena says. "So how do you get the information out there? Through wireless networks."

The system consists of a digital liquid crystal display (LCD) device that sits on the shelves' rail and can be altered from a central computer in the store's office or company headquarters. The system uses secure Wi-Fi to change a price in less than two minutes. The digital displays are powered by batteries with a shelf life up to five years. The system would pay for itself in one to two years by eliminating the cost of paper tags, Saxena says.

While the touted benefit is the ability to change prices faster and more efficiently, there's obviously also the potential to provide additional information (e.g. nutrition info or promotions on food items), as well as more nefarious uses like real-time, demand-based price adjustments that could mean the $3.19 box of Cheerios you put in your cart turned into a $5.59 box by the time you checked out. Sure, nobody says they plan to do that, but you know they're all thinking it :)

No word on when we'll see pilots of Altierre's technology, but according to the company, two major grocers are already testing the stuff out.

Tags: electronic shelf labels, retail media

Retail experts ponder digital media for in-store experience

Today AdAge had a conference in New York titled "Retail in Detail: Where the Digital World Meets the Physical World." Focusing on the use of digital media to bridge the gap between current-day bricks-and-mortar retailing and the Internet, provide new messaging outlets, and improve the customer experience (you know, stuff we've been talking about here for years now), they invited several retailers and marketing experts to talk about their understanding of the present state-of-the-art, as well as their vision for the future. I particularly liked Trevor Kaufman's (CEO of WPP's Schematic) take on the direction "digital media" is taking:

"We're very focused on the three categories of media: proprietary media, things they own like website customer lists; earned media, things in market where people are talking and acting as influencers, like blogs and message boards; and paid media. ... But the metrics are difficult and internal structure of client and agency haven't lent themselves to that...."

...Which pretty much sums up the opportunity and one of the primary challenges that many of us see today. On the subject of measurement, Jerry Courtney, Group Manager of Corporate Multimedia at Target, reiterated the challenge of getting some use out of the myriad of metrics available to us now. He noted that, "Technology enables you to measure so much that you need to start personalizing your ROI. It's hard to say, 'That was good, but was it better than X?'"

It kind of gets back to my point from a few weeks ago that measurement is simply a means, not the end, and unless you can quantify the value of the measurement information itself, it's almost not worth doing any kind of measuring at all.

Still, the level at which many retailers are beginning to embrace digital media is a bit parochial. I've seen more and more companies start up legitimate and budgeted digital signage pilots or projects, but few are attempting anything beyond the current humdrum "hang a screen and sling some content onto it" procedure common throughout the industry.

Granted, enough folks still seem to have a problem with that, so maybe I should bite my tongue and wait for the current generation of problems to get solved before wishing for a whole new set :)

Tags: digital signage, store experience, retail media

Digital signage ad market looking good for 2008

Brandweek's running an article about the success of ad-driven digital signage. Being Brandweek, the article still includes the requisite amount of "gee, who'd of thunk it?" introspection about the digital out-of-home industry in general, but it also contributes some speculation-driven industry numbers and info about PRN's Wal-Mart network that need to get republished and recirculated so that they'll become quotable "facts." For example, consider the following:

• In-store networks are projected to generate $330 million, per PQ Media, Stamford, Conn.
• That's a 43% gain from $210 million the channel generated last year (2006).
• Research from PRN shows that that in-store TV marketing generates 56% average recall versus 21% for regular TV spots.
• More than 66% of content used on the PRN network in the last 12 months was created specifically for the retail environments compared with 50% during the prior year. (hooray!)

That's all new information to me, but it seems believable enough. As I noted just the other day, it looks like the Wal-Mart network still dominates the percentage of digital signage screen time sold in the US, since they were selling $100M worth of spots way back in 2005, they estimated that they'd do around $150M in 2006 (of the $210M estimated to be the total size of the market), and even if they stagnated for 2007 and 2008, they'd still be doing 50% of all the ad sales business that there is to be done in this country.

I suppose it's not too surprising given that Wal-Mart is estimated to have about 20% of the retail grocery and consumables business, 22% of the US toy market, and leading or top-10 positions for a number of other key retail categories according to Wikipedia. Even so, with all the ballyhoo surrounding advertising networks of late, there ought to be either more competition for the PRN network, or else a larger overall market size. To think that every other ad-driven network in the country -- hundreds of thousands of screens -- are only able to garner somewhere between $150 and $180 million in sales is pretty astounding (and not in a good way). If we were to say that there were 300,000 unique "channels" available on which to sell space outside of the Wal-Mart network, that would mean that each screen was only being monetized to the tune of $600/year -- $50/month -- at the $180M number. That's pretty terrible.

Tags: digital signage, retail media, PRN

VM+SD grades digital signage deployments

I somehow missed this article that came out last month at VM+SD Magazine, where Sean O'Leary, the magazine's technical editor, marks off 10 years of covering the digital signage industry by taking a look at some of the current over- and under-achiever networks out there today. Looking at retailers like Anahi, American Eagle and FYE, O'Leary generally feels that digital signs have come a long way since the late 90s, though they still have a ways to go before becoming adopted as a standard part of any retail interior. One of the more interesting parts of the piece was his admittedly non-scientific survey of the local retail landscape, where he noted the following breakdown of stores that had digital signage networks:

• department stores: 1 of 10
• home furnishings: 0 of 10
• book stores: 1 of 2
• jewelry stores: 2 of 28
• women’s fashion: 0 of 45
• men’s fashion: 0 of 25
• electronics: 3 of 14
• beauty and health: 0 of 19
• shoes (all types): 3 of 24
• games: 0 of 4
• sports/memorabilia: 1 of 5
• youth fashion: 4 of 10
• outfitters/extreme sportswear: 2 of 2

While we're so often focused on the major new deployments going out, from this simple survey it's clear that there's still an enormous amount of growth potential left in our little industry. Since he is writing for VM+SD, O'Leary focuses mostly on the visual impact of digital signage and its overall effect on the in-store experience. For example, he notes that the, "composite of young, edgy fashion shops (such as Metropark and D.E.M.O.) and action “outfitters” (such as American Eagle and Oakley)" are ahead of the curve when it comes to digital signage, probably owing to the, "age and coolness level of the target audience[s]" that they appeal to. His ultimate conclusion:

when I see great concept and execution – such as in the Anahí store – I become inspired and want to revisit Woodfield to share my great digital signage ideas. Think of it: If you’re stuck with a small storefront on the third level, why not invest in some eye candy to pull in customers from right across the mezzanine? Wouldn’t Lego increase sales with some videos of its robot kits? I wouldn’t be able to get my kids out of there. I wouldn’t be able to get me out of there.

During the first years of the slow-moving digital signage revolution, there were bottlenecks in almost every phase of the technology. But now, flat screens are dirt cheap; networking and delivery systems are reliable; and software abounds for scheduling and managing programs. All that’s lacking now is the will, the vision and the budget to tap into the power of this medium.

Tags: digital signage, store design, retail media

More info on the i-vu digital signage network investment

Ask and ye shall receive, I always say, and Adrian Cotterill over at the Daily DOOH was kind enough to forward the press release that I was looking for regarding the i-vu investment deal mentioned yesterday. For extra credit, check out the Wikipedia page for General Mediterranean Holdings, the organization making the investment. I'm starting to feel that things may not be entirely what they seem, and I wouldn't be surprised if the $82M was contingent upon the firm winning a number of contracts that require massive amounts of money to front the hardware costs.


NEWS RELEASE CONTACT: Ash Communications
October 2007 TEL: +44 (0) 20 7734 5666
i-vu SECURES £40 MILLION NEW INVESTMENTTO BECOME WORLD'S LARGEST DIGITAL NETWORK

In one of the largest investments in outdoor digital seen in the UK, leading
interactive digital screen media network owner, i-vu, has secured £40
million (US$80 million) of new funding, which will make it the largest
digital network in the world - with well over 300 per cent growth in the UK
and USA in one year - and enabling it to expand into Europe.

As a result of the investment, i-vu is also planning to create its own
content for the network, develop its interactive offering to advertisers,
increase partnerships with a range of content providers and develop the
network as the leading interactive customer service and management tool for
the salon industry.

By the end of the year, i-vu will have around 2,200 screens in the UK in the
middle to upper range of hairdressing salons - which cater for young
professionals and highly affluent clients - giving advertisers a footfall of
1.147 million per month. A target of 2,500 screens is planned for Summer
2008 in the UK and 7,000 screens in the US by 31 December 2007.

As part of the expansion, i-vu is committed to changing its programming
daily and has entered into a new content partnership with EMI and cemented
existing relationships with channels such as E!, BBC Worldwide, CBS and ABC.
It now enjoys 120 different content streams. i-vu has also strengthened its
collaboration with L'Oreal in the US and UK.

In addition, i-vu has secured a raft of new salon chains in the past few
months including some of the largest in the UK such as Jo Hansford,
Francesco group, Lookfantastic and in the USA such as
Toni & Guy (USA) and the Regis Corporation.

The funding is provided via General Mediterranean Holdings (GMH Group),
which has consolidated assets in excess of US$4 billion and owns several
media businesses worldwide, including Korad, part of Ogilvy and Mather, and
Middle East Online. .../

Mike Anstey, ceo, i-vu, says: "i-vu has come of age. It has its own voice
and character, which reflects the dynamic lifestyle of its viewers, and
advertisers now understand the appeal of its interactive, up-to-the minute
programming. GMH Group recognises the potential of digital media and
particularly i-vu's unchallenged position in the market and will provide the
platform for us to build on all that we have achieved to date."

Over the past five years i-vu has established partnerships with some of the
leading names in the salon world, including: Clipso, Cobella, Headmasters,
Nicky Clarke, Richard Ward, Rush and Trevor Sorbie. It has also attracted
advertising client such as 20th Century Fox, BMW, Gillette, GlaxosmithKline,
L'Oreal, Masterfoods, Nokia, Toyota, Warner Bros and Wella. The funding it
has now attracted will enable it to significantly increase its penetration
in the UK, USA and Europe and provide advertising brands with the benefits
of size and structure.

GMH Group was founded in 1979 and today is a diverse business group with
activities in banking and finance, real estate and construction, hotels and
leisure, industrial, trading and pharmaceuticals, communications and IT and
aviation. Its 120 companies employ over 7,000 people in the Middle East,
Northern Africa, Europe, the Americas, the Caribbean, Asian sub continent
and the Pacific Rim. With consolidated assets in excess of US$4 billion,
GMH Group brands include Korad, Ogilvy & Mather; Arabic News Broadcast; Le
Royal Hotels; Hilton Hotel, Beirut; and, Unysis buildings, London.

Tags: i-vu, digital signage, retail media

Media Post Weighs In On In-Store Digital Screens

Nigel Hollis of Media Post wrote a succinct overview of in-store digital screens which touches nicely on a couple main considerations for the future of this industry.

Hollis has stated well known facts within the industry such as, "The Wal-Mart TV Network already rivals broadcast networks in terms of weekly reach, and market research firm Frost & Sullivan says that by 2011, 90% of retailers will have in-store digital screens." He also discusses the tons of variables that need to be taken into account in order for digital screens to be successful while focusing his attention on the duration of the ads in relation to their effectiveness, noting that "someone in the market for an HDTV screen who is unsure of the benefits of plasma versus LCD may appreciate a five-minute video on the topic. But someone in the grocery section of the local supermarket is unlikely to devote that amount of time to a video."

This is the perfect kind of article to send to people unfamiliar with the industry, because it touches upon key ideas without delving too deep. But considering how many of today's networks don't seem to reflect Hollis's insights, I think it should be recommended reading for everyone in the industry. If you don't think you can spare another two minutes, then at least read the following paragraph:

Despite its scale, in-store advertising has had only patchy success to date. In the U.K., the major grocery chain Tesco endured three years of lackluster results before figuring out what really drives in-store success: brevity. While online advertisers debate whether a pre-roll of 15 seconds is too long, Tesco's marketing partner Dunnhumby recommends five seconds for screens placed in the main shopping aisles, because the power of these "alerts" rests not in their creativity but in their proximity to purchase. The alerts reported to be most effective are those for price-off events and new or seasonal items. (emphasis mine)

Ad length on digital screens will always be an issue, and Hollis is dead on in his assertion that duration depends largely on the type of product being sold. But the one key variable that he neglects to mention, which will come into play more and more as these ads become standard, is the idea of audience acceptance. Meaning, can advertisers successfully integrate the screens into places they didn't normally exist without a backlash? The best ad content in the world won't count for anything if it doesn't take into account what people are typically doing inside of stores, namely shopping. If shoppers are distracted and annoyed by the screens, they'll not only be a total waste of money but they could even cause potential buyers to leave the store before making a purchase.

There is so much "digital signage 101" content already on the net that it's surprising to come across an article that can still find something new to say (and having said that, I think WireSpring's digital signage page is still one of the best). One thing that I'd really like to see is more feedback from non-industry readers as they learn about our field and its current developments. Opening up a dialogue with people not already intimately familiar with digital signage at an early stage in their education will yield new perspectives, especially from parties with a vested interest, like retailers or advertisers. And in fact, we could probably learn even more by spending more time with average, everyday shoppers. After all... the biggest, most highly paid media experts in the world can weigh in with their opinions, but if the Average Joe isn't connecting with digital signs as a regular part of his shopping experience then it's still all for naught.

Tags: Tesco TV, digital signage, retail media

P&G redefines "ad spend" to include digital signage and other in-store media

I posted this to Retail Media News yesterday but figured it's pretty central to the (many non-overlapping) readers here who are more interested with digital signage than anything else. The long and short of it: P&G is clarifying the way they spend advertising money to include in-store media, "restating 11 years of ad-spending data in an effort to align their past marketing expenditures with their new terms and plans. AdAge speculates that the new restatement has as much to do with the company's internal goals as it does with the firm's share price, which has stumbled due to lack of organic growth and a slipping ad-to-sales ratio, the primary measure by which its growth was measured throughout the 90s and early this decade." From AdAge:

In all, P&G's restatement added $349 million to 2006 ad spending, with much smaller adjustments in other years, though Sanford C. Bernstein analyst Ali Dibadj believes the differences between the old and new definitions could have boosted P&G's reported 2007 outlays by $350 million, too. P&G said it hadn't calculated or disclosed the 2007 impact....

P&G's figures in the past 11 years show a very high statistical correlation (0.78) between ad spending ratios and organic sales growth under the old advertising definition, and an even higher one (0.87) under the new definition. For the past five years, however, the new ad definition shows a much lower correlation to sales growth than the old one.

The amount of money that P&G spends inside of stores is more than the vast majority of other advertiser s spend in total, and while the financial restatement doesn't necessarily indicate that they'll continue to broaden their reach inside the store, given how fragmented traditional media is and the difficulty P&G is having reaching new consumers, I'd venture to guess that in-store advertisements currently give them the best bang-for-the-buck. The coming challenge is going to be optimizing their presence at retail, since at any given store there's a finite (and fixed) amount of space and increasing competition and clutter from other brands (and the retailers themselves) who all want a piece of the customer's attention.

Tags: digital signage, retail media, in-store advertising

Cheap media, cheap ads

Seth Godin, master of business 2.0 marketingspeak, had a great riff the other day that rings true for so many digital signage projects that I've either witnessed or have been involved with:

When the ads are cheap (think banners, or cable or AM radio), the content is lousy.

A SuperBowl ad costs a few million dollars to run... so the beer companies and the dot com companies spend millions creating the ad, even if it runs only once. A banner ad that you can buy for $200, on the other hand, appears to be created by a small chipmunk in the secretarial pool.

There's no economic reason for this. You can run that banner ad in a thousand places. You can run that radio ad in 200 cities. If the media is cheap, it might just be a good value. And if you can run an effective ad, you can run it far and wide and turn a profit.

Or you could just run a cheap ad.

You and I can probably both think of a dozen digital signage networks where we've witnessed this effect. The screens will go live with gorgeous content, professionally-shot video, high-end animations, and the like. Six months out, the content budget will have dwindled, or maybe it's taking longer to attain a positive ROI, but whatever the issue, the content takes a turn for the worse. Advertisers become stingy, network operators are happy to get anything fresh at all, and consequently everybody settles for a much lower quality of content than they did in the beginning.

What's the solution? Well, from a technology standpoint it's getting easier and easier to make good looking content. Not great content, mind you. That will never be easy. But more powerful tools can get you further into "good" territory than ever before. From a business standpoint, as more digital signage standards emerge (for things like content resolution, file format, spot length, etc.), and as more networks become available to advertisers (either independently, or through some kind of aggregation network), the potential value of each spot should increase. According to Godin's theory above, if you can run an effective ad far and wide, it should be profitable.

One thing's for sure, though: while content doesn't have to be expensive to be great, cheap, uninspired spots will never perform well. And if you can't turn a profit running your ads, why bother running them at all?

Tags: digital signage, out-of-home advertising, retail media

InfoTrends says digital signage is here to stay

Whew, what a relief. Here I thought we'd be shutting off the lights and hanging an "out of business" sign in the window, but InfoTrends has run the numbers and concluded that we won't have to! Specifically,

After struggling in the early years of its development, the business of networked digital displays in retail and other public spaces is now on the path to sustainable growth, according to InfoTrends market research. At the end of 2006, the narrowcasting industry was valued at $1.1 billion with an installed base of 630,000 screens at 97,000 sites. This marks a CAGR of 56 percent as compared with the 2004 statistics....

InfoTrends expects overall CAGRs of 18.5% for revenues, 8.9% for sites, and 11.9% for screens between 2006 and 2011. By 2011, total revenues are expected to reach $2.59 billion. Key findings of the study include:

• The typical survey respondent is using five different types of media, and printed signage and outdoor signs are still the most common.
• Systems integrators are correct in identifying digital signage for advertising, promotion, and out-of-home applications as a key growth area. They should intensify their efforts to increase their exposure for involvement in applications of this type.
• Compared with the survey conducted in 2004, respondents in this most recent study were much less concerned about issues such as lack of measurement of ad program effectiveness, as the body of data supporting the effectiveness of narrowcasting systems continues to grow.
• Indicative of a high level of satisfaction, of the 51 current users of networked digital displays or in-store TV who responded to our structured survey, not a single one expected their usage over the next three years to decrease, and 80% expected it to increase.
• Retailers and brand managers want their promotional programs of any type to deliver sales lift and increase traffic, and they are becoming more confident that narrowcasting systems can deliver on that goal. Securing repeat customers is their secondary goal, while attaining ad revenues from such systems is considered relatively unimportant.

I do agree that more retailers and marketers are starting to understand the potential that these systems have to offer, I also think that a big part of the growth right now is that more are finally figuring out exactly how to determine the ROI on their digital signage networks. By knowing just what to measure, they're having an easier time getting some results, and making optimizations when necessary.

Tags: digital signage, narrowcasting, retail media

POPAI announces initial results of the Marketing At Retail Initiative (MARI) study

In response to the PRISM study being conducted by the ISMI and VNU/Nielsen In-Store, POPAI announced late last year that they would begin their own study of shopper behavior and media exposure in retail environments, with data to be provided around September or October of 2007. The group just announced the completion of their proof-of-concept study, the details of which are in this press release:

POPAI, The Global Association for Marketing at-Retail announced the first findings from studies pioneered by the Marketing At Retail Initiative (MARI). This first proof of concept study was conducted in the United Kingdom at Morrisons and ASDA/Wal-Mart stores. Initial findings show not only the volume of shoppers visiting the stores but the amount of Marketing at Retail materials to which they were exposed to and what materials actually caught their eye.

"This is a significant initiative which will allow brands and retailers to better understand the important role that POP can play in the marketing mix. We have the chance to establish a new language for the accountability of POP that will allow it to be compared with other media. The MARI study will show how POP compares with above the line means of advertising for the first time and will be able to quantify its effectiveness. The study will hopefully reiterate what people in the POP industry already believe, and educate brands and retailers further about the value of POP compliance," said David Martin, Head of brand marketing, ASDA/Wal-Mart.

MARI outlined a series of tests around the world to study Shopper Engagement to begin measuring the consumer experience at retail. Another study in the US has completed work in the field, with the first analytic results beginning to pour out in July. Additional studies are planned in Europe later this year. The Shopper Engagement Metrics trial is the first in POPAI's multi-step vision to position the at-retail medium for the future. This vision includes the development of a Marketing At Retail Valuation platform (MARV) which offers standardize measurement and analysis of placement, materials and messages used in the retail environment to understand what works best to maximize the investment in this medium and the overall media mix. The results shared today not only provide general quantifiable insights into shopper engagement, but more importantly it provides the vast amounts of data required to understand what works best in specific retail environments and product categories.

Important insights revealed for these United Kingdom stores include:

1. 534 shoppers enter the store per hour.
2. Shoppers are exposed the 1.6 pieces of marketing materials per second as they navigate the stores.
3. Shopper's eyes are drawn to 17.8% of the marketing materials.
4. Walk around displays, table units and revolving floor displays were the most seen display types.

The ongoing project incorporates the use of cutting edge technology including small cameras and video software to quantify levels of consumer involvement. This technology will be able to count shopper entry, provide gender and age group demographics, and measure shoppers' sustained visual contact with advertisements throughout their store visit. The software will also be used to develop thermal floor maps of shopper pathways illustrating hot and cold spots in the store and its relationship to the various in-store categories.

Early results from the technology show that there are affordable applications on a broader scale. Lessons learned from this study were applied to the US field trial and will provide a comparison and contrast for not only cultural differences, but improvements in the methodology.

While the early results aren't necessarily earth-shattering, they do represent an important first step in the non-profit group's quest for media measurement at retail. With more results promised later in the year, we may actually have the benefit of working with two sets of numbers -- both PRISM's and MARI's -- before long.

Tags: PRISM, MARI, POPAI, retail media

Alternative Out-of-home ad spending continues to grow

That's not news in and of itself, since OOH has been on a tear the past few years. But taking a look at this chart from eMarketer really gives an idea about the amount of money we're talking about now. Alternative OOH, which includes mostly digital media like in-venue digital signage and advertising networks, has seen better than 20% growth for the past four years, and better than 25% growth for the past two, and was worth almost $1.7 Billion in 2006. Granted that's still a teeny tiny piece of the overall advertising pie (worth over $150B), and sure it's only about 10% of total online ad spending from last year, but for a relatively new industry we're seeing the kind of growth needed to sustain early networks and encourage further experimentation in the space.

The funny thing about all this interest in digital advertising networks is that so far there are relatively few big success stories. Sure, companies like PRN, SignStorey and others have made lots of noise about getting their networks up and running, and it certainly took a lot of time, money and expertise to do so, but even counting these networks as 100% successful, that still leaves us with a grand total of two players. I know there are quite a few smaller networks around, say on the order of 10 - 50 screens, and I do think that local advertisers are still the ideal target for most OOH networks, but that's definitely one part of our industry that continues to seem unduly hyped.

So what's going to fuel digital signage growth over the next few years? What's going to keep us in the high-twentysomethings for CAGR? Ad networks continue to attract venture capital dollars, and one of these days, somebody is going to find that magic formula for building a really successful, homogeneous, non venue-specific OOH signage network, so there's certainly the possibility that enough of these guys will continue to coast on equity dollars until they figure it out. But until then, it seems like new projects in chain store retail, transit, health care and hospitality spaces will continue to lead the way with more understandable and vetted business models.

Tags: OOH advertising, digital signage, retail media

Harley-Davidson, Brookstone chime in on the role of digital signage

It's still somewhat rare to see VPs of marketing, merchandising and store design publish their thoughts on digital signage and retail media in general, so it was somewhat surprising to see this article/interview published by VM+SD last week, which featured veterns from Harley-Davidson, Brookstone, design organization the Design Forum, and an unnamed fashion retailer get together to discuss the pros and cons of in-store networks.

All four agreed that while digital signage system can improve the in-store environment, they don't necessarily have to. Some combination of physical design integration (e.g. embedding screens into existing retail fixtures), merchandising considerations, and of course, great content is necessary to make sure that the screens add to the overall ambience of the store, instead of just adding more clutter to an already busy visual environment.

When it came to listing the current problems with digital signage systems, it's clear that each interviewee had had his or her own experiences, and none of them were quite pain-free. However, the most informative quote came from Harley's Visual Merchandising Program Manager, Lynn Knutson, who noted that, "creating content for the screens [was] the biggest challenge. The amount of content needed to keep a program fresh and relevant to customers and sales staff is tremendous. The time and resources needed to manage a program can be difficult to justify when you cannot tie ROI directly to the program."

It's just amazing to see the number of companies -- and I'm talking established media companies with some considerable successes under their belts -- who still don't realize how challenging/important/necessary it is to keep fresh, compelling content on those screens at all times. At WireSpring, we call it "feeding the beast," since it's the hidden monster that can shred an ambitious digital signage project to bits unless it is planned for starting from day 1.

But for all those who read the last paragraph and are thinking "if it's so much work, maybe I shouldn't bother," Knutsun has a response for you as well: "You need to look beyond the metrics to see how the program improves the overall shopping experience for customers. If you can put your customers into an emotional state of mind when shopping versus an analytical state, then you will sell more product. As the saying goes, when in Rome...!"

Tags: digital signage, retail media, marketing at retail

Google purchases DoubleClick, makes deal with ClearChannel

In case anybody still had doubts about Google's advertising ambitions, they announced a few deals over the past several days that will put them to rest once and for all. First, in an effort to solidify their position as the preeminent Internet ad engine (and to piss off Microsoft, I'm sure), Google plans to acquire DoubleClick for an insane $3.1 billion. Combined with today's news of a massive deal with Clear Channel to sell radio ads on their 1,650 US stations, and hot on the heels of a recent deal with EchoStar to sell trackable TV ads, the search giant is doing everything possible to diversify into other areas, since Internet search advertising still made up well over 90% of their revenues last year.

However, all is not roses for the do-no-evil company. First off, it's unclear whether the DoubleClick deal will go through (though to be honest I'd be surprised if it didn't). Microsoft, AT&T and maybe some others are already lobbying the State Department suggesting that Google's acquisition could give them an unfair advantage. While the notion of Microsoft calling somebody else monopolistic and anti-competitive is ironic (and that's putting it kindly), the suggestion is worth considering. Google already collects a huge amount of personal information from its search engine and affiliate advertising systems, and augmenting that with DoubleClick's technology could make things worse. How bizarre would it be to see Bill Gates and Nadine Strossen, President of the ACLU, showing up on the front cover of the Times together? I tried to come up with a pithy good-vs-evil metaphor to describe it, but I don't care for either of them very much, so my best one-liner involved Satan and a slightly less-evil Satan (which really isn't very compelling).

Meanwhile, both Google and DoubleClick have been experimenting with in-store media for well over a year, and of course Clear Channel is on an outdoor electronic billboard construction boom. Consequently, the consolidation of power here is something we need to be watching very closely. While I'm sure that the TV, radio and Internet advertising folks are much more nervous about this than we digital signage folk are (oddly, the small size of our market is a benefit in this case), companies that want to stay competitive will need a steady stream of market-centric innovations to stay relevant.

Tags: Google, DoubleClick, Clear Channel, retail media

India's in-store TV market heats up

While Europe and North America have hogged much of the at-retail media spotlight the past few years, we've still seen Australia, China and Japan make some noteworthy announcements from time to time. However, with it's billion-plus population and strong economic growth, India has been notably absent from the scene. Maybe it's the lack of infrastructure, government focus on only a few key cities, or the fact that less than 20% of retail activities are what you'd call "organized." But whatever the cause, India has been a sleeping giant in the retail media space, with some projects and trials going on, but no real, big news.

That makes this announcement by TAG Media more interesting, since an expansion to 200 sites or more puts them squarely in the big leagues. Granted TAG is a US-based operation, the rapid pace of retail expansion in India makes them a natural choice for all sorts of digital media. The press release notes:

TAG Media Network Inc. the first and largest national “In-Store Television Network” has extended TAG Media Network to Fabmall, Trinethra & Foodworld. This strategic partnership with the retail chains has developed Tag Media’s network to over 200 plus grocery stores, supermarkets, and hypermarkets nationwide with a footfall of over 6 million per month. Consumers visiting, Spencer's, Fabmall & Foodworld can now experience the pleasure of shopping before they buy plus the opportunity to fulfill desires instantly.

Marketing-speak aside, a footfall of 6 million viewers/month is compelling, though it's unclear how much economic influence those 6 million have. While there's no mention of goals or ROI planning in the press release, it does suggest that TAG hopes to deploy another 500 screens in the coming months, bringing the total to 1,000 by year's end (which works out to an average of 5 per location, but no word on whether some places have one and others 20).

Tags: digital signage, retail media, TAG Media

SeeSaw to launch online ad buy platform for digital signage

ADWEEK notes that SeeSaw Networks, a company that allows media buyers to purchase ad time on multiple disparate digital signage networks at once, is stepping up its efforts by launching seesawads.com, a web-based marketplace for digital sign media buys. By joining together any number of smaller networks into one quasi-cohesive ad "platform," SeeSaw is attempting to address one of the critical shortcomings of many digital signage networks today: unless they're big (and I mean really big), many advertisers are either unaware of these networks' benefits or uninterested in them because it can be hard to deal with the myriad of different business and technical rules to place an ad. Plus, with a merging of networks, SeeSaw gains access to a broad array of demographics and a large slice of the population. According to the ADWEEK article:

SeeSaw's six affiliates allow advertisers to aggregate digital sign inventory from more than 10,000 lifestyle venues across 205 markets. The company's current affiliate roster skews toward younger demos in health clubs, sports bars and universities, but SeeSaw also has substantial avails in grocery stores, retailers and travel centers. Plans call for expanding to target Hispanic and business demographics.

Tags: SeeSaw Networks, digital signage, out-of-home advertising, retail media

PRN to partner with Cgen in China?

While PRN, Thomson (their parent) and Cgen don't have any news about it up on their sites yet, this brief blurb in Forbes indicates that the two out-of-home media players will be working together in some form or other. PRN, known best for its Wal-Mart TV network, and Cgen, supplier of digital screens to the Carrefour chain of hypermarkets in China, would seem to overlap in every area except geographic location, so it will be quite interesting to see what form this partnership takes. The whole of the Forbes blurb is as follows:

Premier Retail Networks (PRN), a wholly-owned unit of publishing and information firm Thomson Corp, plans to form a joint venture with Shanghai Cgen Digital Media Network Co Ltd, the China Business News reported.

No financial details of the planned tie-up were provided.

Shanghai Cgen, a provider of in-store advertising in hypermarkets,received an investment injection of 24 mln usd earlier this month from several venture capital investors including DF Capital, Red Point venture and Sumitomo.

Tags: Cgen, PRN, Premier Retail Networks, digital signage, retail media

When does TV become digital signage?

On Friday, Advertising Age ran an article about the Taxi Entertainment Network, the latest new-media experiment from Clear Channel Outdoor. This network debuts in New York City under the name NY10, and will appear on screens inside more than 5,000 taxi cabs. NY10 will feature local and international news, weather, sports and entertainment content from WNBC, NBC News and NBC Entertainment, and has a projected reach of over 14,000,000 consumers a year. With all of this network-supplied content comes advertisements, which can be day-parted and geographically targeted. While Clear Channel is billing the NY10 as a new advertising medium (and selling the spots accordingly), the content will be decidedly more TV-like than what you'd typically see in an out-of-home advertising project. This raises an interesting question: at what point does a content network really become an advertising (or digital signage) network?

To be fair, that's something of a loaded question, since television has been a commercial affair for quite some time. While early attempts to use broadcast technology for educational purposes largely failed, commercially-sponsored news and entertainment was quick to become TV's killer app. So in some ways, TV has been both content network and advertising network since the very beginning. For out-of-home advertising networks like digital signage systems in retail chains, the primary intent has typically been more obvious: advertise products sold in the store. But even in the digital signage world, networks use different types of content and different ratios of ads to news and entertainment depending on the environment and the target audience.

Read the rest of the article at: When does TV become digital signage?

Tags: digital signage, out-of-home advertising, retail media, in-store media, advertising, retail marketing

Get your free digital signage software!

Back in 2006 when I first wrote this article, it was just a snarky response to an equally snarky blog post from a fellow industry blogger:

Dave Haynes at Digital View is apparently competing against me for this year's Digital Signage Sarcasm Award (DSSA), and has put up a good fight with this post about free digital signage software from the latest entrant into our already-crowded industry. His take on the newcomer summarized in one line:

I never really thought our business was on the precipice of revolt, waiting for somebody to rise up and stick it to the man. But there you go.

Ouch.

I'm with you, Dave. Our list now has over 300 competitors somehow, and I shudder at the thought of how high that number would be if we were to add in the bulk of our European and Asian competition. While it would seem that the barrier to entry into the digital signage industry is quite low (as evidenced by the number of players in the market), to win any significant business takes not only a great product, but also years of history, expertise in your target market, and of course an absolutely killer staff that your customers will all love (so really, it's like every other B2B market).

However, traffic to this page, compellingly-titled "get your free digital signage software," continues to be pretty steady, and I'm guessing it's not just because you like my style of curmudgeonly humor. No, you're probably here because you're actually looking for digital signage software that is free. Well, there's some good news, and some bad news. First of all, folks, nothing in life is free. I know, I know, the curmudgeon rears its ugly head again, but it's true.

See, there are some open source digital signage packages out there (at least one built for the task, and a few that are bolt-on modifications to popular content management packages like Joomla), and those are generally free as in "free speech" and free as in "no money for this software." Of course, unless you value your time at ZERO, there's still the time it takes to assemble the components, get them running, and then maintain them, and a cost associated with that. Maybe you're an IT pro with Linux kernel hacking skills, and that's no problem. Maybe this is a fun hobby for you, which is great. Or maybe you just have to meet some business objective, and after that you have better things to do with your life.

If you're looking for low cost digital signage software or systems though, there are a fair number of options. Lots of vendors now sell low-cost turnkey packages designed for small networks. And of course, there are plenty more options for digital signage software as a service (SaaS), which you can think of as paying for help with the software (and ancillary stuff like bandwidth, storage, etc.), which might ease your sleep at night. It should certainly improve your operations.


Tags: digital signage, software, retail media