as seen in StarTribune:

Digital signs are popping up on billboards, at gas pumps, at the Mall of America — and a group of Twin Cities companies selling software that remotely controls the digital signs is hoping to cash in on the new advertising medium.

BroadSign International of Minnetonka, Wireless Ronin Technologies of Minnetonka, Telentice Global of Golden Valley and 3M Digital Signage, a unit of the Maplewood firm based in Bainbridge Island, Wash., provide software that ensures digital signs display the right information or advertising at the right place and time.

The market for such software is still relatively small — no more than $100 million worldwide, analysts say. But digital sign advertising has become a $500 million-a-year business as an alternative to traditional broadcast and print mass media.

Are we really watching? Nobody knows. But market researchers are working feverishly to find out.

“The major factor holding back the growth of digital signage at this point is that its effectiveness isn’t proven,” said Aravindh Vanchesan, an analyst for California-based research firm Frost & Sullivan. “But new studies by the Nielsen Co. and others are trying to correlate product sales with the exposure people have to all these advertising screens.”

BroadSign, which said this week its software will control a 44-by-31-foot information screen above the entrance of the Democratic National Convention in Denver, is a sort of computerized middleman. The firm doesn’t sell advertising or own digital signs, but it does license its software to the firms that do. BroadSign’s software controls the flow of information to and from the signs through its Canadian data center.

“We control 150 different digital sign networks around the world, and we know what content and what ads are being run on them at any time,” said Rick Engels, BroadSign’s CEO.

A chief concern among businesses which are considering the use of digital signage is that such a network will be ineffective. Indeed, much of what we’re witnessing in the industry suggests that many businesses don’t understand the potency of the technology nor how to harness it. This is likely due to digital signage being a new and innovative technology. Though many advertisers are experiencing success, standards of usage haven’t been firmly established.

For example, newspaper or television advertising follows proven models of successful. The strategies that are deployed in those media are based upon what has proven effective in the past. Digital signage is new and therefore lacks a benchmark approach. That being said, traditional advertising yields helpful clues regarding what works.

Why The Customer Matters

As advertising has evolved, so too has the consumer’s receptivity to marketing. No longer is the typical consumer content to be bombarded with a litany of marketing messages. Today, they focus on what is relevant to them and quickly discard - or ignore - the rest. Whether you’re deploying a digital signage network in a movie theater, casino, shopping mall, or a small chain of kiosks, the messages you broadcast across the system must address the concerns of the customer in a compelling manner. The experience must be engaging for the customer. Below, you’ll find 3 tips for making your digital signage efforts more effective by focusing on the customer.

Tip #1: Encourage Participation

It’s easy said than done. But, it is possible to create a broadcast that encourages your audience to interact with your message. This can be as simple as leading them through a tree of choices. Or, you can design a complex series of messages that builds your audience’s expectations about your products while allowing them to creatively select their own path through your inventory. There are many ways to encourage participation. You need to identify your customer’s concerns and then engage them.

Tip #2: Use The Data

The digital signage networks that are available today can yield valuable data regarding customer choices. This is one of the reasons why encouraging their participation is critical. When customers interact with your displays and proactively make selections, they do so based upon their interests and the effectiveness of your message and presentation. By reviewing customers’ choices, you can identify parts of your message that are ineffective. That provides the opportunity to modify or eliminate them.

Tip #3: Make The Experience Personal

Whether the experience that a customer has while interacting with a digital screen will be positive or negative is largely dependent upon how personal that experience is. For example, assume that a customer is looking through an inventory of shoes. Each selection will further identify that customer’s concerns. This can provide a framework around which you can tailor your message to address specific concerns based upon gender, age, vocation and other factors. Each selection builds upon the element of personalization. And the more personal your digital signage broadcast is, the more engaged the customer will feel.

Making Digital Signage Effective

Most fundamental principles of marketing address an audience’s interests, concerns and passions. Digital signage is no different. To leverage its effectiveness, you need to engage your customers with messages that are compelling to them. By reviewing the data that your network yields, you can create an experience for your customer that feels personal and encourages them to interact.

Broadcom blog writes:

NBC Universal and Google announced a strategic partnership that would give the largest search advertising company access to cable TV ad space inventory, Ad Age reports.

The move, if successful, could enable smaller marketers, who have been using Google’s paid search ad engine AdWords and who have not been able to afford TV ads before, to buy air time on a number of NBC’s cable outlets, bypassing traditional media sales channels.

According to Ad Age, when the system is in place, it would allow ‘non-traditional’ advertisers to upload their own content and target it to cable TV households based on the desired geographic markets and viewer profiles using an online interface, thus avoiding agency overhead and media buyer commissions.

In addition, these new advertisers would be able to receive high-tech metrics via Google TV Ads application, which can report second-by-second set-top-box data, says Ad Age: “That measure has become more popular as companies such as Starcom USA, TNS and Nielsen have offered plans to help advertisers get more precise data about how viewers watch TV, skip across channels, and use digital video recorders.” The network TV ad space will not be affected by the deal, Ad Age reports.

This collaboration could give NBC Universal a much needed edge against its “Big 4″ rivals amid continuing fragmentation of TV market, while providing Google with a revenue stream from traditional media.

Mainstream agencies and research companies are likely to perceive the NBC-Google agreement as a threat, as it contributes to the erosion of their control of TV ad space and has the potential of taking over at least part of network TV sales in the future..

Many attempts of creating online ‘media space exchange’-type of enterprises since the early 90s have been thwarted, not without efforts by the traditional media establishment.

If the collaboration works, I don’t see any obstacle for Google to start making inroads into digital signage (judging by company’s reported patent applications it is already working on it), as there would not be too much difference in the ad sales set up. It would make more sense, though, when digital signage ad space is more aggregated.

The four-company collaboration offers an enhanced visitor experience by seamlessly blending digital design into the historic and timeless environment of the Smithsonian.

The museum, originally designed to accommodate 500,000 visitors per year, is now hosting more than seven million visitors per year.

Therefore the new digital signage system extends wayfinding beyond directional guidance, to education and detailed information on events and exhibits within the National Museum of Natural History.

“We are excited with the results of the project and believe we have created a new standard for using digital signage as a wayfinding tool,” said Bryan Meszaros, Chief Business Development Officer of OpenEye.

The kiosks FITCH designed encourage the sophisticated digital signage system to blend in, not overwhelm visitors to the museum.

Integrating the displays into the environment was a challenge due to the age and design of the museum.

“The kiosk locations are at crucial points in the customer journey,” comments David Hogrefe for FITCH.

“Our design is a seamless bridge between the permanent physicality of the building and the dynamic, ever-changing digital content.

We also used the kiosks to establish a new visual language representing enhanced wayfinding for the visitor.”

“It was a pleasure working with the design team at FITCH,” comments Meszaros.

“They have helped to make technology a modern extension of the environment.”

The National Association of Broadcasters (NAB) has sponsored one of the first books to explain the business of digital signage. Out-of-home digital displays offer a powerful extension of or a cost-effective alternative to television advertising.
The greatest benefit is in the degree to which “Digital Signage: Software, Networks, Advertising, and Displays: A Primer for Understanding the Business” (NAB Executive Technology Briefings) by Jimmy Schaeffler, describes digital signage. Also beneficial are explanations on how it fits into the marketing and communications mix, and what to consider when investing, deploying or using this medium.
Also referred to as “dynamic display”, “retail TV”, “narrowcasting” or “electronic signage”, digital signage has accelerating momentum as a powerful marketing, staff and patron communications instrument.

The book describes various business models for digital signage in a wide range of applications including retail, transportation, hospitality, banking, education, automotive, houses of worship, medical, consumer services and staff, visitor and patron communications. It also references deployments around the world with a focus on North America, Asia, Europe and South America.
The history and emergence of digital signage are addressed by reflecting on the use of videotape runway shows used by New York fashion houses in the late 70’s. The current state of deployments and ad spending presented in the early chapters help to clarify the megatrend toward out-of-home dynamic display.
The characteristics and inherent capabilities of digital signage are well articulated, along with trends and key reasons that are driving the exponential growth of digital signage.

Digital Signage: Software, Networks, Advertising, and Displays: A Primer for Understanding the Business” (NAB Executive Technology Briefings) by Jimmy Schaeffler
Published by Focal Press April 10, 2008
ISBN 978-0-240-81041-6

“Madison Avenue is bracing for the worst ad slump since 2001 as a drop-off in consumer spending is likely to lead marketers to rein in their budgets”, reports New York Post on September 21. “The anticipated drop in spending in 2009 comes on the heels of a slight decline in 2007 and a more noticeable dip so far in 2008, according to industry data,” writes New York Post’s Holly M. Sanders. Most major press relayed a similar sentiment in the wake of last week’s meltdown on Wall Street.

New York Times quoted the CEO of WPP: “In the last couple weeks, you could smell the fear in New York,” said Martin Sorrell, chief executive at the WPP Group, which owns agencies like Grey, JWT and Ogilvy & Mather, as “institutions that were regarded as invincible have gone down or had to be bailed out.””

The downturn in ad spending had started well before the “Black Sunday”: “… the Nielsen Monitor-Plus division of the Nielsen Company reported last week that ad spending in the first half of 2008 fell 1.4 percent compared with the same period a year ago. The laggards included ads in national magazines, down 3.1 percent; national newspapers, down 8.1 percent; and spot radio, down 10.1 percent,” says New York Times.

Reports forecast that traditional media is going to be the segment worst affected by the financial crisis, followed by online display advertising, which had already suffered a 6% drop in the first half of 2008, according to Nielsen. Display ads on the Internet have been largely dependent on financial and insurance advertisers.

New York Post writes that last week’s turmoil triggered memories of not-so-distant past: “No one wants a repeat of 2001, when the dot-com bust and an economic slowdown caused ad spending to plunge 9.8 percent, according to figures from ad researcher TNS.

During that recession, widespread cutbacks led to layoffs at many agencies, including some closings, shrinking budgets for many TV and cable outlets and the failure of several print publications,” (New York Post, September 21, 2008)

However, in 2001 the media landscape was quite different. Internet’s paid search advertising was not yet as proven and accountable as it is now, thanks to Google AdWords. Outdoor was less prominent and not yet regarded as ‘the only true mass medium left’, and the digital out-of-home ad space was almost non-existent. There are clear indications that these media may benefit from today’s difficult times, as marketers will cut budgets and look for more cost-efficient media placement options.

“It’ll be more pragmatic. More measurable. More digital.” — Nick Law, exec VP-chief creative officer North America of digital agency R/GA told Ad Age (“How Creativity Can Carry Your Business through a Recession”).

If we look at the categories falling under ‘more pragmatic, measurable and digital’, and I would add, ‘targeted’, they all continued to grow at an impressive rate throughout the economic troubles that began in early 2008.

“Despite the overall decline, ad spending for cable television, syndication TV, and outdoor advertising remained fairly healthy. Cable TV grew 8.1%,” writes crainsnewyork.com. Paid search was growing too, according to Nielsen Online. Outdoor was boosted by digital billboards, and in-store digital media (digital signage in retail) was expanding, notwithstanding the lack of standardized buying criteria and measurements.

Online display ads, although digital and targeted, were an exception from the above group due to their exposure to financial ad budgets, and, some say, their intrusive nature. A good example of the exception that proves the rule.

Ad Age’s analysis of what the meltdown means for the advertising industry included this abstract:

For agencies: “… there will be further retrenchment in the financial-services and automotive sectors, with some expecting telecom budgets to be hit hard, too. Across the board, the pressure on shops will intensify to prove return on investment. Expect less-brand-based and more-sales-led metrics.

For media: “…By now, if you are in the media, you know the story: fewer dollars to broad-scale media and more for targeted, accountable media and other marketing disciplines, such as direct and customer-relationship management. Some marketers will double down with their most trusted media partners to create big, provable multimedia programs…” (Ad Age, September 22, 2008, bold and italics mine)

Although it is a fast-growing sector, digital signage is still a minor portion of the Outdoor/Out-of-home media which, in turn, is a modest part of today’s media mix. But that is changing.

The recession will inevitably force marketers to scrutinize ad spending and eliminate a lot of marketing waste. At the same time, it presents a rare opportunity (that occurs only once in every few years) for digital out-of-home networks to demonstrate their unique value as the most flexible, targeted, cost-efficient and accountable medium. The medium that closes a sale.

The new Pew Poll may have important implications for those who wish to market their products with digital signage.

A couple of weeks ago the Pew Research Center for the People & the Press released the results of a major survey about how people in this country consume news.

While the focus of the study was on the news media, I believe the research reveals some important demographic currents that digital signage marketers would do well to recognize and understand. The survey revealed four types on news consumers: News-Integrators, Net-Newsers, Traditionalists and Disengaged. I’ll disregard the disengaged for the sake of expediency and concentrate on three remaining groups because they are where the message for those concerned with digital signage lies.

The two groups offering the most fertile ground for digital signage marketers are News-Integrators and Net-Newsers. Together these two groups, which account for 36 percent of total, show a high propensity for using multiple media types to find the news they desire. According to the results, both groups are well-educate and relatively affluent -qualities most digital signage marketers will find attractive.

Where they differ is in the degree to which they rely on a combination of media technologies when seeking out news. For example, News Integrators view TV as their primary source of news, but supplement it by visiting Web sites most days. Net-Newsers, on the other hand, regard the Internet as their primary source of news. In total, 92 percent of Net-Newsers go online daily to find their news. Other sources, like television, are regarded as secondary. In fact, this group relies so much on the Web that more of them are likely to watch a news story online than sit in front of their TVs and watch the nightly news.

Traditionalist, who account for 46 percent of news consumers, are older, less well-off and less educated than Net-Newsers and News Integrators. Television is the dominant source of news among Traditionalists, and although they own computers, they rarely go online to find out what’s happening.

From my point of view, digital signage marketers can take a few lessons away from this survey. First, most people depend on TV as a valued news source. That’s good news for digital signage communicators because their signs are indistinguishable from TVs at first glance. Secondly, 36 percent of the audience, which happens to be the most affluent portion, likes using a combination of media to get the information they desire. Digital signage marketers can take advantage of this attraction to multiple media sources by adding a broadcast or cable channel into their signage presentations. By using TV in an on-screen digital signage zone, they can grab an audience’s attention while simultaneously conveying their own messages in the remaining zones on the sign.

Third, up-and-coming Net-Newsers and News Integrators show by their news consumption patterns that they are tech savvy and enjoy using technology to determine which media they consume. Hybrid, interactive digital signs adds the perception that the audience is in control of what’s displayed, something that dovetails nicely with this preference.

From my point of view, the results of this survey point out some characteristics about the news audience that can serve as guideposts as digital signage communicators define their message and their approach. Taking advantage of the affinity of these respondents for television news puts digital signage in the game. Using the tools that are available to make it interactive, positions digital signage to excel as an influencer.

Why are digital signage networks popping up on campuses across North America? Because they are one of the few media still being heeded by people 18 to 24 years of age.

While digital signage networks are novel enough to generate “oohs” and “aahs” among audiences of all ages, it is the university and college-aged crowd that is the most responsive. Conversant with technology from a very young age, they are highly receptive to messaging delivered via digital signs. And with the potential for interactivity, digital signage networks of the future hold even more promise as the ideal medium to engage students.

Why Digital Signs Have Such Strong Appeal

Retailers have discovered the value of digital signage networks for directing very specific advertising to a narrowly defined target audience. Hence the term “narrowcasting” which refers to messaging that reaches a particular audience in a particular place, as opposed to broadcasting which reaches a broad, widely-dispersed audience through traditional media like radio and TV.

Other sectors have begun using digital signage for more than advertising. Airports use it to provide information to passengers, banks use it to occupy waiting customers and hotels and conference centers use it to help visitors find their way.

All of these uses have met with positive response from their audiences. But the response at campuses has been even greater. As a recent guide from Digital Signage Today points out, digital signage networks are the “perfect marriage of ideal audience and ideal technology”. Today’s students welcome new technology and are keen to be the first adapters of new gadgets and gizmos. Knowing this, many university administrators have turned to digital signage networks to communicate with this iPod-wearing, Facebook-using, cellphone-and-Blackberry-addicted generation.

On-Campus Uses of Digital Signage Networks

How are digital signs being used in colleges and universities (and even some high schools)? Administrators use the signs to post important announcements and emergency information. Various departments use digital signs in their buildings to communicate messaging relevant to their students. Student councils, sports teams and clubs post information about upcoming events.

Digital signs have become virtual bulletin boards, placed at strategic locations -like libraries, student centers, bookstores and cafeterias - where they can reach the most students. Using RSS feeds, schools can provide up-to-the-minute, current and relevant information to their students much more quickly and efficiently than they could with the corkboards and paper messages of old.

Some universities sell advertising space on their digital signs to generate revenue. Knowing their media-savvy audience, most incorporate marketing and promotional material in small doses and are sure to display it alongside informational messaging so students do not come to view the signs as just another advertising platform.

The Future

What’s next for on-campus digital signage networks? Interactivity using wireless technologies like Bluetooth or SMS. In its guide on education and digital signage, Digital Signage Today discusses East Carolina University which is set to allow students to vote or respond to polls posted on digital signs using their cell phones. This is just one application of interactivity, but the potential for more is there.

Is this function useful? Maybe. Necessary? Probably not. Cool? Definitely. And it is this last trait that will keep students interested and engaged in digital signage networks while they are on campus and after they leave to join the workforce.

I’m Bill Gerba, and I approved this message. If you’re living in the US, you’ve probably heard that sentence (sans my name, of course) a zillion times over the past few months as candidates for all sorts of offices have tried to claw their way out of the TV and into your brain to influence your decision on election day. In addition to the endless commercials, direct mail flyers (I’ve somehow been invited to numerous $1,000 per-head dinners by both parties — no thanks!), and blogs and Internet “news” sites, the candidates’ minions have also been busy putting up signs and placards on every street corner — plus posters on every visible space that will allow them. So it’s a bit counter-intuitive to think that the places that typically contain the most commercial messages per square foot — retail stores — have been a safe haven from political ads. The question is: why?

Every store is a purple store

It’s not that retailers can’t run political ads. Stores are private spaces, so the corporate powers-that-be can do virtually anything they want as far as internal messaging is concerned. But regardless of what the mass media might feed us about “red” and “blue” states, the simple truth is that there are plenty of Democrats, Republicans and independents wherever you look. Thus, promoting one candidate means you’re always going to be ticking off a certain percentage of your customer base, and that’s not good for business. I don’t claim to know the contents of every network operations contract and ad sales agreement signed between retailers and digital signage companies, but I’m willing to bet that most have an implicit understanding, if not an explicit clause, keeping political ads off-limits for that very reason — greater good be darned.

I use the phrase “greater good” above for maximum effect, because my more politically-inclined friends still insist that being an activist for your preferred candidate somehow improves the world. I’ve never really bought into this on an individual level. And I’m downright positive that it’s totally untrue when applied to retailers, hotels, restaurants and other commercially-driven private and semi-public spaces. Pick a candidate, and you alienate some portion of your customer base. If your guy wins, you’ve essentially locked in that alienation for the next four, six or eight years, depending on the office. If your guy loses, your customers’ memories of your activism will likely fade more quickly, but you still haven’t encouraged any additional loyalty. Unless there are considerable political favors to be had if your candidate prevails (which I understand is a big no-no), it’s a lose-lose situation for the retailer.

Gas stations and retailers are in the spotlight

Gas Station TV (which sells ads on pump-top digital screens) was in the news recently for coming to this very conclusion. Apparently, the Obama campaign approached the company about buying ad time to talk about the energy crisis behind $4/gallon gas. However, Gas Station TV made “a conscious decision not to run political ads” and eventually refused to accept the placement. It doesn’t take much imagination to guess what might have happened had they run the ads. Regardless of where you lean on the political spectrum, it’s not going to be very comforting to hear about why gas is so expensive while you’re right in the middle of pumping that expensive gas into your car. And that discomfort might get transferred to the station or brand of stations playing the ads, which could easily translate to future lost sales.

The nation’s largest retailer, Walmart, has taken a different approach to handling political ads. Instead of explicitly endorsing one party or another, they’ve decided to air voting-oriented public service announcements on their in-store TV network. Arranged like a series of old-school gym posters, the “Exercise Your Right to Vote” campaign will be seen by 136 million customers and 1.4 million US store employees every week. Superficially, at least, the Walmart behemoth appears to be doing good and encouraging the democratic process. Conspiracy theorists, on the other hand, think the retailer has a preferred candidate and a good understanding of how core shoppers are likely to vote, and believe that the latter might help get the former elected if enough of them can be encouraged to go to the polls. If that theory is true, Walmart could score a major coup by getting their choice for president elected while never running a single political ad in their stores — all the while encouraging fair play by airing public service announcements instead.

Taking sides is unlikely to pay off

When I was growing up, discussions about religion and politics were generally off-the-table at our family gatherings. (Things were loud and fractious enough without broaching those topics.) That same rule definitely carries over into the retail space, as well it should. Unless a retailer has a significant vested interest and a predictable upside in seeing a particular candidate win office, they’re much better off avoiding the entire debate. And while a mom-and-pop operation probably isn’t going to run into too many problems supporting their man (or woman) for the city council, that doesn’t carry over to national retailers. When you have to present a unified image and message to multiple idiosyncratic audiences in cities and towns all around the country, the game changes considerably.

Say what you will about capitalism trumping politics. I’ll take ads for Pop-Tarts over presidential candidates any day.

Topics: out of home media, new advertising markets, digital signage networks, video advertising networks

More signs of the uncertain times ahead for traditional media in this country have emerged over the past few weeks.

Belo, which owns newspapers like the Dallas Morning News, the Providence Journal, and the Press Enterprise, as well as owns and operates 20 TV stations, said Oct. 1 it was splitting its holdings into two companies: The New A. H. Belo Corp., dedicated to the print properties, and Belo Corp., which will run the TV business.

Then E.W. Scripps said it would take a similar path Oct. 16 when it announced that it would break into two companies: E.W. Scripps Co., which will consist of about 20 newspapers and local television stations, and Scripps Networks Interactive, consisting of Home & Garden Television, the Food Network and Shopzilla.

At about the same time as the Scripps announcement, McClatchy Co., the third largest newspaper company in the United States, said its quarterly profits dropped 55 percent for the third quarter, a result of a weakening advertising market.

It’s clear traditional media companies are suffering a significant decline in readership and advertising lineage. Many of the dollars once spent on newspaper ads are being redirected into emerging new media like the Internet as media consumers increasingly log on to online sources to catch up on their world. Hence, companies like Belo and Scripps are separating business units into stand alone companies to cordon off the drag on their revenue and sustain shareholder value and interest.

These are among the largest media companies in the nation. If they aren’t impervious to the change brought on by new digital media, it’s unlikely other traditional media companies will be able to continue down the same path they’re on without making some course corrections along the way.

To be sure, Internet advertising is taking a sizeable bite out of the dollars once devoted to traditional newspaper, television, radio and magazine advertising. Another emerging digital media competing for its piece of the ad budget is out-of-home advertising, and more specifically out of home video advertising on digital signage networks.

In late January, the Out-of-Home Video Advertising Bureau (OVAB) formally launched with the mission of helping to provide standards and best practices for the newly emerging slice of the advertising industry. It was created by many of the largest out-of-home video advertising networks to remove impediments to the growth of the new ad medium.

One of the chief missions of the group is to help advertisers and those who run out-of-home video advertising networks work together “to plan, buy and evaluate the effectiveness of these mediums,” said Mike DiFranza, president and general manager of Captivate Network, one of the 10 companies that founded the group.

The contrast couldn’t be more apparent: On the one hand, many traditional media are scrambling to restructure so they can decouple business units with the potential to be profitable from those suffering from the re-allocation of advertising dollars to new digital media. On the other, a group like OVAB has emerged to help the fledgling medium of out-of-home video advertising build the advertising “street cred” that traditional media long ago mastered.

While it’s a long shot, perhaps there’s an opportunity for traditional media and emerging media, like out-of-home video advertising networks, to help each other. Why shouldn’t traditional media integrate out-of-home advertising networks into their media offering? Certainly, they have the ability to generate content for the medium, they have the relationships with local businesses to both sell the advertising and secure locations for new signs on the network, and they have well-established market research resources to assist in building new audience measurement metrics. Conversely, why shouldn’t emerging new advertising markets welcome the participation of tradition media, which can leverage its strengths to assist the new medium in its maturation?

The concept of advertising with media outside of the home gained a good degree of notoriety Sunday in The Los Angeles Times with a major article by staff writer Alana Semuels.

The 1,000-word article, “Now showing very near you…”, makes a strong case for digital signage networks and advertising as well as other out-of-home media. In the article, Semuels identifies digital video recorders as a major culprit in diluting the frequency with which traditional television commercials are viewed. As a result, advertisers are hungry for an effective substitute, and out-of-home ads appear to be the solution.

Semuels elaborates on a major theme of several of my recent columns, namely every day more TV viewers are skipping past commercials with their DVRs, making in-store, out-of-home advertising all the more appealing. (Two of my earlier columns discussing the impact of DVRs on TV viewing, include: “Digital Signage Payoff: What Is A Challenge For TV May Be A Boon For Digital Signage Networks” and “Digital Signage Market Poised to Skyrocket.”)

According to the LA Times story, about 20 percent of U.S. households now have digital video recorders. The ease with which viewers in these homes can skip past the commercials has a growing number of advertisers interested in out-of-home ads on flat panel displays near the point of sale where they can influence shoppers making purchasing decisions. And, if they can’t influence a particular buying decision, at least they can elevate brand awareness.

Quoting San Francisco-based Premier Retail Networks, which has 200,000 screens in 6,500 stores nationwide, the article points out 42 percent of shoppers remember a brand they see on in-store screens, twice number for television commercials.

It’s no wonder then that a recent forecast from PQ Media Research indicates that spending on out-of-home advertising will grow 27.7 percent this year. The statistics, part of the company’s “PQ Media Alternative Out-of-Home Media Forecast 2007-2011″ report show the category to be among the fastest growing segments in the media industry.

Last year, media spending on out-of-home advertising reached $1.69 billion, up 27 percent from the 2005. In fact, spending on out-of-home advertising has grown at double-digit rates every year from 2001-2006 with a compounded annual growth rate of 22.6 percent, according to the PQ Media report.

In discussing the reasons for the growth, Patrick Quinn, president and CEO of PQ Media said: “Unlike its mass media peers, alternative out-of-home advertising is impervious to channel or web surfing and is immune to audience fragmentation.”

PQ Media identified several factors driving the growth of out-of-home advertising, including:

advertiser perception that out-of-home ads provide high engagement, targeting options, proximity to point-of-sale, measurable impact and cost effectiveness;
data indicating exposure to and recall of these media are growing;
research suggesting the vast majority of consumers view alternative out-of-home media as favorable and educational;
new technology enabling companies to launch digital advertising platforms that generate higher revenues than the conventional formats they replace.

PQ Media divides out-of-home advertising into three categories: video advertising networks and screens; digital billboards and displays; and ambient advertising. The research firm has found video advertising networks is the largest category, accounting for 60 percent of all out-of-home ad spending. Spending on this category grew 28 percent in 2006 to $1.01 billion with double-digit growth in four markets: in-theater, in-office, in-store and in-transit, according to the company.

High-profile news articles, like the one from the LA Times, draw the public’s attention to this market. More importantly, this sort of coverage helps busy ad professionals focused on traditional media segments to notice the out-of-home advertising market. As these ad pros have their own “Ah-Hah” moments thanks to these sorts of articles, it won’t take too much effort to back up the perception that out-of-home advertising is a growing, important new segment. Research, such as that from PQ Media, makes it easy for out-of-home advertising to be taken seriously -and more importantly for ad buyers to consider it as a new part of their media mix. As they do, out-of-home advertising and digital signage are likely to enjoy even wider acceptance and use.

David Little is a digital signage enthusiast with 20 years of experience helping professionals use technology to more effectively communicate their unique marketing messages. He is the director of marketing for Keywest Technology in Lenexa, KS, a software development company specializing in systems for digital signage creation, scheduling, management and playback.

For further digital signage insight from Keywest Technology, download our Six Basic Digital Signage Applications white paper; subscribe to our digital signage RSS feed that gives a diverse perspective on digital signage from experts around the world; and sign up for our Keywest Update news brief.

Digital signage advertising “will be among the fastest growing ad-supported media over the next few years, and will begin to rival traditional outdoor advertising by 2012,” writes Joe Mandese of MediaPost in today’s Digital Outsider newsletter and blog. The author reviews the results of this week’s edition of VSS’ annual Communications Industry Forecast, published by Veronis Suhler Stevenson, and consultant PQ Media.

According to the updated report, “the “alternative” out-of-home media sector will grow at a compound annual rate of 22.5% through 2012, which is considerably faster than the overall growth of the U.S. advertising marketplace, and only a slight slowdown from the 24.6% annual rate of growth the medium experienced over the past five years.

Based on those projections, VSS estimates alternative out-of-home ad spending won’t be so alternative by 2012, when it will total nearly $6 billion, and account for nearly half (46.4%) of the entire out-of-home advertising marketplace. That compares with a tepid 3.8% rate of annual growth for traditional outdoor ad spending through 2012.”

… “While video ad networks remains the largest alternative OOH category, digital billboards and displays grew the fastest in 2007, due to the strong rollout of new at-road signs, primarily from Lamar and Clear Channel. Spending on digital billboards increased 59.7 percent in 2007 to $372.0 million,” writes the Digital Outsider, quoting the report.

The forecast “likens the digital out-of-home ad marketplace to the explosive growth of the early Internet’s, but cautions that the growth will not come without challenges, including the impact of a general economic downturn that is expected to last through next year. Despite the positive outlook, the digital out-of-home business faces challenges,” the report warns. “In the short term, the sector is untested in an economic slowdown, although it was holding up well in the first half of 2008. Second, while major brands are pressuring their agencies to take a closer look at digital OOH, agencies are demanding more and better measurement on the effectiveness of digital out-of-home advertising. This will be key to the struggle [of] digital out-of-home,” reports Joe Mandese.

The VSS reports also validates our previous predictions that digital signage has a much bigger potential for accountability than any other media: “While macro economics may be somewhat out of the control of digital outdoor media purveyors, VSS notes that the industry is taking proactive steps, including efforts by the Outdoor Video Advertising Bureau, the Traffic Audit Bureau, and individual companies, to accelerate better measurement and ROI metrics.

“Cutting-edge measurement, particularly engagement metrics such as new ‘eye-dwell’ technology, has the potential to make digital out-of-home spending a prominent component of media plans in the future,”” the analysts forecast.

“Improved metrics, and accountability, coupled with increasingly mobile consumer lifestyle patterns, and a shift away from static video advertising, meanwhile, is expected to accelerate digital out-of-home advertising’s share of the outdoor medium, as well as the overall advertising marketplace,” quotes the Digital Outsider.

Ironically, traditional agencies are still referring to network TV, radio and print as “measured” media, and put all new media, including the Internet and digital signage into the “unmeasured” category. Ad Age’s 100 Leading National Advertisers report says : “unmeasured disciplines, primarily marketing services such as direct marketing, promotion and digital communications (including unmeasured forms of internet media such as paid search).” (Ad Age, June 23, 2008)

I understand that “unmeasured” means not measured by traditional yardsticks like TNS, Nielsen or Arbitron, but what other means of communication has more potential of being tracked and analyzed than digital, which, as we see, is already being measured in a myriad of ways?

The same publication, Ad Age, in its July 15 editorial contradicts the LNA report: “… the drive to digital is providing new ways to measure multimedia efforts and proving a catalyst that’s bringing this movement to fruition.”

It’s just a question of bringing existing but disparate data to some common denominators. Hopefully, the OVAB’s long-awaited Audience Metrics Guidelines and other research initiatives will help introduce standards, starting with their fast-expanding list of member-networks.

While the economic slowdown is hurting the traditional “measured” media, the so-called “unmeasured” digital and Outdoor media seem to be doing great. Digital out-of-home is fitting into both categories, so we are in good shape so far…

I expect that this outdated classification will disappear from the trade lexicon in the near future, the same way as we no longer hear about “above the line” or “below the line” media any more…

In the meantime, the “unmeasured” media is running full steam ahead…

TBM - a business leader in the global digital signage arena - currently operates a network of over 1 000 plasma and TV screens across the country, creating a platform for advertisers to share their information with various sections of the population, depending on which audience-specific package is chosen.

Trendsetter in its field, TBM incorporates new technology that provides a basis for revolutionary new communication strategies. Advertisers can now create high-impact campaigns and deliver them virtually instantly via satellite to any of these screens across South Africa. Advertising screens within the TBM network include those at Johannesburg, Cape Town and Durban International Airports, airport lounges at these three airports, Absa banks, American Express, Rennies Bank, Virgin Active, golf clubs, advertising agencies and the Johannesburg Metro Police Department.

TBM also operates “private” television stations for government, NGOs and corporate clients, which can be used for various applications including marketing and promotions, staff training, brand building, product/service information, company communication, promotions, competitive advantage, social responsibility, sponsor extensions and strategic alliances.

In addition, TBM also delivers DVD quality full-motion content to plasma screens located within closed networks, acting as a telecommunications service provider for institutions requiring information distribution to both staff and clients. These are known as hybrid networks, and TBM currently operates such a network for Cell C in over 90 retail centres across the country. By the end of 2006, this figure will have grown substantially. During business hours, the network is used for communicating with the clients in Cell C call centres, stores and franchises.

“Currently, South Africa is lagging behind the international market with regards to digital signage,” says Pierre van der Hoven, CEO of TBM. “Marketers need to start realising that Out-of-Home TV is the way of the future - traditional media has become fragmentised, and has lost the power it once commanded.”

Research shows that digital media is four times more effective than conventional television advertising. Significantly, digital media is also seven times more effective than conventional print media, and receive ten times the eye contact of static signage.

“Studies also show that 75% of all purchasing decisions are made in-store at the point of sale, and that 85% of retail customers say that multi-media displays make a difference to where they shop,” van der Hoven points out.

According to recent studies by New York research company Weinstock Media Analysis, who defines digital signage as ’server-based advertising over networked video displays’, technology sales to this market in North America totalled $US972-million in 2003 and will rise to $US2.23-billion in 2008. It is predicted that this region will have over 540 000 screens at more than 76 000 sites by 2009.

In the US, the broadcast network of PRN - the largest TV network in the retail environment - reaches an audience of over 150 million shoppers every week in over 5 500 stores countrywide. It delivers information and entertainment-packed programming in stores where customers spend over US$256-billion every year.

Advertisers in the UK have also cottoned on to this highly effective marketing medium, and over 57 000 networked screens are operational in public venues. This figure has made an astounding leap from only 10 000 in 2004, according to the Samsung Screen Survey of last year. Apart from producing a value-adding experience for mall visitors, screens have also been placed in government buildings, banks, hair salons and student unions.

Three years ago, Tesco TV rolled out 5 000 screens in 100 Tesco stores, which reach 14 million shoppers a week. ASDA, the other major supermarket chain in the UK, has completed a six-month pilot in two of its major stores. Results of the Spar grocery trial were also published in 2005, and showed increased sales of between 10% and 40% for targeted products.

Besides Tesco TV, other success stories in the UK include Toni & Guy TV, with 230 salons in Europe and expanding across Asia; the Bullring Shopping Centre in Birmingham, which provides information through plasma screens and kiosks; Abbey National, a dual network in 800 stores that does brand advertising and staff training; and the Camelot network, which promotes the national lottery in 500 supermarket and sales outlets.

If South Africa is set to follow North American and European trends - and the signs are already beginning to show - then astute marketers will start to place emphasis on extracting the maximum value from ad-spend, with the added benefit of avoiding a ‘blanket’ marketing approach, opting rather for one that is focused and targets specific audiences.

“Digital screens with moving images are much more effective than static point-of-purchase material,” notes van der Hoven.

“Even though advertisers spend millions getting shoppers in stores, more than half of those shoppers leave empty-handed because static advertising is unreliable, invisible and difficult to manage. In fact, the Point of Purchase Advertising Institute (POPAI) estimates that 30% to 40% of all point-of-purchase advertising is wasted as a result of incorrect and non-displays.”

TBM is poised to play a pivotal role in developing this market in South Africa, and is currently the only South African company that provides all the necessary elements for an OHTV network. “We see a boom coming for the digital signage market in this country, and we’re prepared,” says van der Hoven. “Marketers should be too.”

The UK chapter of POPAI, in cooperation with the Imperative Group, released a report on the use of digital signage and other forms of digital media at retail. I just had the chance to read the document (formally titled Guide to Digital Media in Retail, though they seem to favor the unpronounceable G2DMiR moniker), and thought I make a few comments to anybody who has been on the fence about spending $200 (free for POPAI UK members) on yet another research report.

First of all, at only 26 pages it’s a quick read, which is not a bad thing at all. Having read more than my fair share of reports over the last few years, my estimate is that about 75% of the stuff in there is often hype. The G2DMiR is largely hype-free and statistic-rich. Instead of taking the position of infallible research company, they also took the very nice step (in my opinion) of soliciting case studies and anecdotes from numerous industry experts (at companies including Dunnhumby, Retail Week, Spar, and The Co-operative Group), which gives them an extra degree of accountability (or, they’re all a bunch of liars, though I suppose that’s not too likely

So, for example, I could tell you that “I’ve heard that some retailers see a 20% in sales of advertised products, with a 3-5% lift on the whole category”. But it wouldn’t be very verifiable, and in fact I’d probably forget where I first heard the statistic so you’d be out of luck trying to follow up on it yourself. Or, you could read that very stat in the report, as written by Susan Beetlestone at the Co-operative Group, who manages Europe’s largest digital screen network. Need to cite something to an investor or advertiser? You now have a company name and responsible party.

So should you buy it? I’d say that depends on what your business is, and how far along you are. If you are focused on the retail vertical and are concerned about things like sales uplift and retail case studies, or if you want some details on what the UK’s top companies think about loop length, playback frequency and using audio in your content, it’s easily worth the money.

Although interested in signage as a means of information distribution, I wonder if in a lot of cases the systems deployed are fashionable technology in search of an application? This is a cause for concern because of the power consumed by all these screens/processors which are appearing everywhere…

This cylindrical screen has popped-up overnight in the car park of our local shopping centre. It does not appear to be particularly effective, and if you stand close by you can really hear the fans whirring! Probably costs more to run than indirect sales gained.

My five-year-old son and I were walking through Wal-Mart the other day, when he noticed the “Wal-Mart TV” screens for the first time. We’ve spent plenty of hours in Wal-Marts before, but the screens had always escaped his gaze (perhaps because they’re mounted at heights that give an adult a neck-ache).

But today, he says to me: “Daddy, that’s the TV channel that only shows commercials.”

An exclamation mark appeared in the air over my head. Why yes, son, that’s right – it’s a TV channel with no programs, only commercials.

Now honestly, how many of you would watch such a channel if you were at home? A few of you might have just raised your hands – marketers and ad-men and ad-women and connoisseurs of the art form of the commercial – but for most of us, a network of all commercials, all the time is a nightmare that sends us scrambling for the big, friendly TiVo button.

But there is no TiVo button in a store, only a growing number of screens that the shopper cannot get away from.

In-store media is a powerful tool, and when it is properly done, consumers love it. When the content is entertaining and place-appropriate, it feels like a benefit to the shopper. When the content is nothing but ads, it feels like an intrusion into the shopper’s privacy.

Blame the all-too-human nature to be pennywise and pound-foolish. Many retailers, having just written the not-insignificant check for the screens and the software and the installation of their new digital signage program, turn to face the content beast and say, “Oh, wait, we can save some money here by using ads we’re already running on television or the Web.”

And yes, you can. You can also hire terrible customer service people to save a few dollars in the short-term. How well does that strategy work?

Through the use of digital signage, displays used for loss prevention can also be used to run content that creates brand loyalty and encourages sales lift through, promotions, digital merchandising and cross-selling.

In essence, one screen is used for multiple purposes. First, running dynamic and relevant content will serve traditional digital signage roles such as welcoming patrons and serving as advertising space. Interspersed with that content is live security footage designed to curb theft.

Interesting piece from an employee perspective on digital signage in the workplace as a means of communication:

In my office we use email and posters to convey communication of upcoming events. Being that I work in a firm with very talented designers, the posters are always great to look at. I was reading today about the use of digital signage becoming the ‘in’ thing to do for large companies that have a lot of employees. The message is always changing and therefore it keeps the attention of those walking by or eating lunch if the plasma/lcd was in the lunchroom. There are so many uses actually and I think it would be a fun tool to incorporate into our offices, but then we’d need to have a media team as none of us has time to come up with content, lol. But I think it is a cool resource for companies - do any of you work for a company that uses this type of media to tell you your benefits have changed, or the annual company golf tourney is coming up?

http://www.inamood.com/?p=2207 for her blog.

Digital Signage, with its eye-catching video played in the state of the art, monitors, can play many roles in a retail store - the roles that have at one time or another was filled with various sales staff. The advantages of relying on digital technology to deliver their messages to customers are pronounced. Not only will be able to deliver its message more economical and efficient, in most cases, but rest assured that the contents of the marketing message that is delivered is both coherent and some of the effective.Consider Signalling functions of digital marketing can fill: “attractor” - Gone are the days of the Shill and Hawker walk in the street touting goods and services for sale and is looking to attract passersby into her shop. Except for the novelty effect - what’s old is new again - to pay someone with a sandwich board to draw customers has been completely replaced by display windows and advertising screens. Storefront monitors display advertising allows digital craft the message you want to deliver to buyers of the window and the foot traffic passing through their point of sale. “ambassadors” - Digital signage can be configured to greet and direct customers or clients for customer service counters, Self-service kiosks or sales staff. The efficiency is increased by having sales staff interact with customers on the screen corridors or areas where purchasing decisions are being made, rather than greet each customer at the entrance. Although greeters could be used, customers can go to areas where products and services are, rather than being compared to politely and deferring the ubiquitous “Can I help you?” Issue, with the superficial “No thanks, I’m just watching, “response”. Wayfinder “- digital signals and content can be configured and positioned to provide directional information to customers, through the leadership of the retail outlet for the product aisles are looking for. In the configuration of traffic and directing traffic flow, Wayfinding technology can help customers find the products they are looking for quick and easy way, improve the customer experience and freeing up the sales staff to wait for customers have found the products they are looking and are making their purchase decision. “Signal” - The contents of your digital advertising can focus on the promotion and sale of certain products. The monitors and digital displays can provide real-time promotion of products and promotions in real time, allowing the promotion and sale of products that may have limited lifespan. “Closer” - Digital signage is particularly effective in retail outlets and can be used to promote impulse purchases to sales counter, as well as repeat sales messaging that has already been submitted to its customers all Throughout its purchase experience.Used constantly digital advertising can guide customers through their shopping experience retail, always focused and consistent marketing point of entry to retail outlets. Besides presenting a thought out strategic marketing message, consistency and measurement of digital signage allows you to continuously improve its effectiveness. The metrics through advanced digital advertising software enables you to see what is - or not - the efficiency of converting customers to purchasers.Far more effective than relying on traditional print advertising, the interactive nature of digital signage allows you to cover many of the functions of his less successful sales people - attracting customers, greeting them, helping them find their products - and allows its sales staff to concentrate on building customer relationships and converting that relationship in sales. Digital signage has proven effective in helping retailers build customer traffic, increase sales, improve inventory management and generate additional revenue.
Source:articlebase.com

Digital signage, with its eye-catching video played on state-of-the-art monitors, can play many roles in a retail store – roles that have at one time or another been filled by various sales staff. The advantages of relying on digital technology to deliver your messages to customers are pronounced. Not only will you be able, able to deliver your message more economically and efficiently, in most instances, but you can be assured that the content of the marketing message that is delivered is both consistent and effective.

Consider some of the marketing roles that digital signage can fill:

“Attractor” – Gone are the days of the shill and the hawker standing on the street touting the goods and services for sale and trying to entice passersby into your store. Except for the novelty effect – what’s old is new again – paying someone with a sandwich board to draw customers has been wholly replaced by display windows and advertising displays. Storefront monitors displaying digital advertising allows you to craft the message you wish to deliver to window-shoppers and the foot traffic that passes by your retail outlet.

“Ambassador” – Digital signage can be configured to greet and direct customers or clients to customer service counters, self-service kiosks or sales staff. Efficiency is heightened by having sales staff interact with customers in the display areas or aisles where purchase decisions are being made, rather than greeting each customer at the entrance. While greeters might still be used, customers can be directed to the areas where the products and services are located, rather than being faced with and politely deferring the ubiquitous “Can I help you?” question, with the perfunctory “No thanks, I’m just looking,” response.

“Wayfinder” – Digital signs and content can be configured and located to give directional information to customers, directing them through the retail outlet to the product aisles they are looking for. By shaping traffic and directing traffic flow, wayfinding technology can help customers find the products they are looking for quickly and easily, enhancing the customer experience and freeing up sales staff to wait on customers who have found the products they are looking for and are making their purchase decision.

“Signaler” – The content of your digital advertising can be focused on promoting particular products and sales items. Monitors and digital displays can provide real-time promotion of products and promotions in real time, allowing promotion of sale products and products that may have limited shelf life.

“Closer” – Digital signage is particularly effective at the point-of-purchase and can be used to promote impulse purchases at a sales counter, as well as providing repetition of sales messaging that has already been presented to your customers throughout their shopping experience.

Used consistently, digital advertising can guide customers through their retail shopping experience, providing focused and consistent marketing from point of entry to point of sales. In addition to presenting a strategically thought out marketing message, the consistency and measurability of digital signage allows you to continuously improve its effectiveness. The metrics provided through advanced digital advertising software enables you to see what is - or isn’t – effective in converting customers to purchasers.

Far more effective than relying on traditional print advertising, the interactive nature of digital signage allows you to fill many of the less fruitful functions of your sales staff – attracting customers, greeting them, helping them find your products – and allows your sales people to concentrate on building customer rapport and converting that rapport into sales.

Digital signage has been shown to be effective in helping retailers build customer traffic, increase sales, improve inventory management and generate additional revenue.