Wednesday, October 24, 2007

OTX study says digital signage really works!

A very positive study on the effectiveness of digital signage was released by research firm OTX today. According to this article, they collected data that shows that, "63 percent of adults find that advertising on digital signage 'catches their attention.' Moreover, the study confirms the stopping power of digital signage, as people consider advertising in this media to be more unique and entertaining, and less annoying than both traditional and online media."

Particularly appetizing to advertisers is the finding that, "digital out-of-home media is even more effective at reaching 18- to 34-year-olds. Seventy-five percent of people in this age range have seen digital signage in the past 12 months and notice digital signage in seven different locations during their week. Additionally, this group finds the advertising on digital signage to be more unique (63 percent), interesting (57 percent) and entertaining (53 percent) than advertising on other media and rates the media even higher than the general population across these measures." Reaching younger audiences is always seen as a kind of "Holy Grail", and if digital signage does in fact reach them better then the medium's fate is secured.

Still, while this study obviously represents good news, it should be taken with a grain of salt. The idea of tracking the effectiveness of digital signage is still a relatively new concept, and there's much work to be done before concrete metrics for in-store media emerge. Considering that Arbitron, POPAI, Nielsen and others are still working out what to measure and how to measure it, results may change in the future.

Also, because SeeSaw Networks commissioned this research (and of course they have a vested interest in seeing positive results make their way into the marketplace), analysts will need to exercise further caution when relying on the results. That's not to say that SeeSaw would intentionally mislead the public, but rather sponsored studies have a funny way of turning out in favor of the sponsor. It's just one of those things.

Personally, (and nothing against OTX or SeeSaw here because they seem like a great companies) for the time being I'm more willing to put a little more trust data coming from Nielsen or one of the other aforementioned gruops, simply because these firms are media measurement experts -- the gold standard when it comes to measuring audiences. Again this is not to say that that OTX's results are inaccurate or their methods incomplete. We simply have more experience and a better understanding of the other firms right now.

Let's hope that future surveys released Nielsen, POPAI, and Arbitron do show the same trends as OCX's study (and more data should start coming out soon). One survey showing the strengths of digital signage is nice. But lots of surveys showing the strengths of digital signage would be really nice!

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Anonymous said...

First of all, thanks for covering the recent release of our newest industry-oriented research on the rapidly escalating digital signage media marketplace. It is very much appreciated.

I would, in response, like to give you a little background on our decision to utilize the services of OTX over many others that we looked at. First, OTX is a well-established research company, working with most major entertainment companies, many of the largest consumer packaged goods firms and other Fortune 100 companies.

OTX got its’ start in the entertainment industry, largely in the area of feature films, where studios must establish a new releases “brand” in a few weeks time. Failure to do so means failure to open their films – which in turn means an immediate loss of tens, and in some cases hundreds, of millions of dollars. There is zero margin of error in this should it fail. In this extremely unforgiving environment OTX both survived and thrived by getting consumer engagement and activation research consistently right. Early on, they also were involved in pre-testing packaging for major packaged goods companies, television spots and other forms of advertising. Again, they survived and thrived in yet another highly unforgiving area of research, where hundred of million of dollars are at stake, by consistently getting it right.

Intrinsic in OTX research methodology is their expertise in providing insights into the both the awareness and attitudinal characteristics of consumers in regards to their customers products and, in the case of our study, digital signage advertising. While we fully acknowledge and applaud the work of Neilson, Arbitron and others emerging in this media we believe that, in fact, OTX has far greater depth of experience and capabilities in gathering the types of information that we believe will be critical to providing marketers with consistent, unbiased and informative data regarding this media.

Bill Gerba said...

Hi Jeff,

Thanks for the clarification. I don't think Phil intended to suggest there's anything wrong with OTX's research. Rather, there are two issues that will crop up with anybody using them as a basis for an argument for digital signage.

First, since they're not POPAI or Nielsen, they don't have the same mindshare with people who will be making the data-driven decisions. There's not much you can do about it -- it's quite simply a matter of brand recognition, oddly enough.

Second, sponsored research is always going to be at least a little suspect, no matter how fine and upstanding both sponsor and researcher are. Again it's not that either company is intentionally or willingly changing the results to look more beneficial, but rather that there's always a conflict of interest brewing in the background, and that can have an unforeseen (and very difficult to detect) effect on the data.