Saturday, December 01, 2007

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.

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