Nielsen is to expand its out-of-home measurement services to cover the digital signage market, with a new service called ‘Nielsen On Location Media’.

On Location Media aims to support the industry by quantifying and monetizing the value of its advertising with a defined set of standardized metrics.

Nielsen has collected together an impressive range of partner networks to launch the service;

- IdeaCast’s Health Club TV, advertising in 1,000 health clubs across the U.S.
- Gas Station TV, pump top advertising in 425 US cities
- The Hotel Network, providing sponsored VOD content in more than 1 million hotel rooms.
- Arena Media Network, covering stadiums throughout the US
- Buzztime, with approximately 3,700 restaurants and sports bars
- OnSpot, a 1200+ network in Simon Malls

Reports (examples of which are already available for IdeaCast & Gas Station TV) will incorporate both field estimates and real world “verifiable truths” - such as set-top box data from hotels, health club membership swipes, gas pump transactions, ticket sales, and interactive plays.

Trade media says metrics for digital signage that can be accepted by media buyers, are becoming a reality. Here is a brief overview of what the press has written on the subject in the past couple of months.

Nielsen is about to launch a new service that will provide monthly audience ratings for digital out-of-home networks in a format similar to that of TV ratings “pocketpieces” (booklets that you can fit into your pocket).

According to MediaWeek, “Nielsen has already issued its first report for Ideacast’s health club network. Sources confirmed other networks have also signed up for the service, among them Gas Station TV, Arena Media Networks and CBS Outernet.”

Katy Bachman, the author of the MediaWeek’s article, continues: “…standardized metrics could be a game changer for a medium advertisers find attractive but that lacks the metrics to give it a fair evaluation.”

“Measurement will bring some order to the whole medium,” said Jim Spaeth, president of Sequent Partners, a research consultancy hired by the Out-of-Home Video Advertising Bureau to write research standards to be released later this summer.

MediaWeek says Nielsen will issue reports free to agency clients, which it does with its cinema reports. For Ideacast, it takes the business to the next level. “Nielsen has a database of 30,000 planners and buyers, and they’re sending this to their entire database,” said Jason Brown, president, sales and marketing at Ideacast, which has already begun selling with the data. “Our business plan and internal projections are based [on these reports]. It’s now our currency.”

MediaPost wrote that, “… perhaps the most important aspect of the new pocketpieces will be Nielsen’s imprimatur, a stamp of approval that would provide legitimacy and authenticity for place-based networks calling on advertisers and agencies.”

Another advantage, according to Paul Lindsrom, Senior Vice President-Nielsen Strategic Media Research, would be “the ability to flow place-based TV audience estimates into media-planning software from firms such as Nielsen’s IMS unit, or various media and marketing mix modeling systems.

Lindstrom called the plan a “fairly simple, fairly straightforward approach” that would enable place-based TV networks to be planned and bought alongside traditional TV outlets, writes MediaPost.

MediaBuyerPlanner.com explains: “Whereas television and internet audience estimates are taken from consumer panels, Nielsen will gather data for the out-of-home video networks primarily from compiling and modeling third-party data, and combining that with Nielsen research conducted by telephone.”

MediaWeek says Nielsen already has competition in digital signage measurement: “While Nielsen is the first research firm to try to establish currency for the medium, it may not go unchallenged. Several other players, including Arbitron, Knowledge Networks, Edison Research, Peoplecount and MRI, as well as TruMedia and Quividi, have developed research and have worked with OVAB to develop guidelines.

“There are a lot of companies out there [looking to measure OOH video]—two companies may also work together,” said Suzanne Alecia, OVAB’s president. “Our guidelines are a rule book for any research provider to use,”” writes MediaWeek.

Advertising Age pointed out on June 23 that, “While out-of-home video advertising was estimated by PQ Media to take in $1.28 billion in spending in 2007, the emerging media sector did so with no standardized metrics for advertisers and agencies to buy it efficiently. The 18-month-old Out-of-Home Video Advertising Bureau is working with more than two dozen vendor and measurement partners (including Nielsen, Arbitron, Screenvision and CBS Outernet) to help create a universal measurement checklist for out-of-home media buyers. But even after the metrics receive official approval from the American Association of Advertisers and Agencies, they’re not likely to be employed until early 2009.”

My colleague Brian Dusho and I were part of several rounds of discussions of the OVAB’s Audience Metrics Guidelines, and I can testify that the document absorbed input from all stakeholders: the largest networks, research firms, technology providers, agencies and advertisers. Once endorsed by trade organizations and published, it will be a solid starting point for standardizing the digital signage ad space.