Archive for November, 2007
The fast-expanding “market that includes everything from elevators to urinals” lacks universally recognized metrics, writes Advertising Age. The article points out that some sectors of out-of-home video networks (another synonym for “digital signage”) have been experiencing double-digit growth in recent months; and to sustain this growth, networks need industry-wide metrics.
Ad Age describes individual attempts by networks to bring accountability to the medium by partnering with companies like Nielsen for audience measurements (Ideacast), or by trying to fit into criteria similar to those used by agencies and national advertisers for buying traditional media (SeeSaw). But overall, the author says, ”those separate efforts don’t really address the need for a system that would allow media buyers to easily compare different offerings.”
The Out-of-Home Video Advertising Bureau (OVAB), formed in January, sees its main goal in bridging this gap. According to OVAB President Kim Norris, the organization intends to create a system that will “look similar to Nielsen’s TV ratings, since the majority of the metrics are impression-based.”
This is certainly a noble mission and accomplishing it will boost the digital signage market dramatically. However, I still see it as an intermediate step towards a metrics system that is more organic to the nature of digital signage, especially in retail. That is, a system based more on “cost-per-transaction” and “cost-per-action”, rather than on “cost-per-impression”. As some analysts predict, impressions will be still be used as a tool to fine tune campaigns if the sales lift numbers do not meet the targets, and for first-time buys.
I would like to mention here our previous posts on the subject: see the Digital Signage ROI category archives.
November 20th, 2007
While she completely agrees in general with the statement that advertising will undergo “tectonic” changes in the next few years, Diane Mermigas of MediaPost is concerned that the IBM survey and other research has not yet offered any recipes as to how exactly marketers should be handling the changes:
“… we need templates for change.
And that’s where the best intended research and surveys fall short. Media players and advertisers are desperate for concrete ideas, business models, creative formats. They need a road map on how to alter their existing infrastructures, operations and processes to accommodate the new digital ways. They need particulars to help them construct personalized solutions. Too many pricey consultants are still dealing in generalities, not specifics.
The IBM report offers a fine summary and point of discussion of what we know. But it’s also a stark reminder of what we don’t know–and what we need to do in order to become participants in digital change rather than mere observers,” writes Mermigas.
I always try to see how the media trends analysis affects and reflects trends in digital signage. In this respect I found the following paragraph from the article relevant:
“With Google’s ad auction-based ad sales and placement already a model, the report predicts advertising inventory will increasingly be bought and sold through more efficient open exchanges. More marketing will be matched specifically with consumers who are more receptive to and in need of the pitched products and services to maximize ROI. Precise measurement of consumer response to specific ads and companies will determine effective pricing as users monitor and respond to the full spectrum of technologies. Those three scenarios are givens.” - This trend is mirrored in digital signage, where targetting by consumer profile and geographic market, coupled with “cost per transaction” and “cost per action” measurements will be prevalent methods of media placement within the next 3 years.
Related topics: Is Digital Signage for Branding or for Sales Lift? ; New Metrics for New Media? A Multi-Billion Dollar Question ; Digital Media M&As a “High Growth Category,” Despite the Credit Crunch and Fears of Recession: WSJ
November 14th, 2007
According to a new survey by IBM, “The next five years will hold more change for the advertising industry than the previous 50 did. Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked,” - write IBM’s Saul Berman and Bill Battino in today’s MediaWeek.
The article summarizes global shifts in advertising trends as forecasted by more than 2,400 consumers and 80 advertising experts polled by IBM. I would like to point out the parts that are relevant to digital signage:
“… Measurement: Advertisers are demanding more individual-specific and involvement-based measurements, putting pressure on the traditional mass-market model. Two-thirds of advertising experts IBM polled expect 20 percent of ad revenue to shift from impression-based to impact-based formats within three years.” - Since digital signage is a strong impact-based media type, this trend will benefit its growth.
“… Advertising inventories: New entrants are making once-proprietary ad space available through open, efficient exchanges. As a result, more than half of ad professionals polled expect that open platforms will, within the next five years, take 30 percent of the revenue currently flowing to proprietary incumbents such as broadcasters.” - We see a similar thing happening in digital signage with companies like SeeSaw and ADCENTRICITY aggregating, standardizing and packaging advertising inventory from heterogeneous networks.
Aggregators will eventually make it possible for marketers to start buying digital signage directly, bypassing traditional middlemen.
Related topics: Is Digital Signage for Branding or for Sales Lift? ; New Metrics for New Media? A Multi-Billion Dollar Question ; Digital Media M&As a “High Growth Category,” Despite the Credit Crunch and Fears of Recession: WSJ
November 12th, 2007
The writers’ strike may undermine the already weakened network TV and will benefit alternative digital media platforms, predicts Diane Mermigas in today’s MediaPost article.
Mermigas says TV stations will have to offer sizable makegoods to advertisers for the audience numbers lost during the strike, which, in her opinion, will cripple the networks. At the same time, “The Internet search and social networking kings are giving advertisers new options to connect with engaged target consumers, establish ongoing relationships, push cost-effective pitches and make certain transactions. They provide click-accountable direct consumer connections and immediate, personalized communications,” she writes. While Mrs. Mermigas does not mention digital signage (or its synonyms) directly, it is fair to assume that this type of new media falls into the category of “alternative platforms” she refers to.
Here are the exerpts from this Media Post article that I thought were relevant to digital signage professionals with regard to the situation around the writer’s strike:
“The traditional and newer gatekeepers take completely different approaches to the way they pursue, price, place, define and mine advertising dollars. The broadcast television networks and local television stations face stagnating advertising growth; save for the cyclical political election ad spending that is slowly oozing onto the Internet. Advertising-related revenues on the Internet and other digital interactive platforms are growing unabated at double digits.”
“…Suffice it to say that the Internet, mobile phones and other digital interactive platforms will only appreciate in value and importance, and will continue to suction dollars from static old media. It’s probably more worthwhile pondering just how fast and far old media revenues will fall off their historical highs.”
“…The TV networks will have to offer advertisers some form of makegoods for the ratings and demographic shortfalls in their handicapped program schedules and streaming video Web sites. Their best-guess connections to viewers are dependent upon the performance of high-priced, low-return content, the only sure financial offset to which is advertising sales. The collective jolts to the stability of television advertising have never been greater.
What a prolonged strike and absence of new scripted prime-time and daytime dramas and comedies–as well as late-night talk shows–may demonstrate is the willingness of viewers and advertisers to permanently move outside the realm of television networks to competing digital interactive advertising-supported outlets for entertainment and information. These options include professional and user-generated video on Web sites like YouTube, playing video games, locating vintage TV shows of choice of choice on non-sanctioned Web outlets, watching more pirated films online, Internet socializing, shopping and surfing. With 80% of all U.S. adults online, according to a new Harris Poll, the time and money historically spent by consumers and advertisers on television will be seriously challenged.
In the context of these confluent factors, bigger shifts in the flow of advertising dollars will come as a result of increasing destabilization of traditional static media such as television and print, and the increasing value proposition of interactive media such as the Internet. Even television’s 2009 mandated digital conversion will not reconcile the fundamental technical differences with so-called new media. However, the certain makegoods that will be made to advertisers this season based on falling ratings exacerbated by the writers’ strike bring insult to injury for Madison Avenue players struggling with metrics, return on investment, and new forms of creativity.”
“…The millions of dollars in advertising makegoods that could be at stake in a protracted strike will not only cripple television networks’ thin profit margins, but permanently damage the business link between television companies and advertisers. On the film side, piracy continues to sap hundreds of millions of dollars in annual revenues, and the maturing of DVDs (which have extended the profit life of films) is beginning to taper off and decline.
In other words, the writers’ strike is not helping an already tenuous media and entertainment situation.
The ultimate irony is that the studios, networks and other traditional media companies are arguing they can’t assign a portion of the revenues from so-called new digital media because they don’t know what it will be worth. Suffice it to say that the Internet, mobile phones and other digital interactive platforms will only appreciate in value and importance, and will continue to suction dollars from static old media. It’s probably more worthwhile pondering just how fast and far old media revenues will fall off their historical highs.”
“…On the advertising front, television networks have only a dwindling mass audience to offer, which they cannot muster during a strike.
Google’s meteoric growth into an advertising-supported search powerhouse using fundamental practices, metrics and pricing that are radically different from traditional media is a testament to just how fast consumer and advertiser sentiments can change. The new advertising game plans from Facebook and MySpace that feed on immediate, direct connections between engaged consumers and advertisers with mutual interests are attracting support from television’s blue-chip advertisers including P&G, Ford, Toyota , Microsoft, Chase and Coca-Cola.
Their self-service advertising interface services are making it easier for small to medium businesses to participate in an online advertising market that siphons ad dollars away from local television stations. As the marketing game churns, the television networks are confronted not only with keeping pace with the change, but salvaging their existing ad revenue base.
Analysts are mulling the adverse impact that general and strike-related ratings shortfalls (even using the new C3 metrics), and advertising makegoods, will have on overall TV network revenues in the fourth quarter and first half of 2008. Although companies such as CBS–which derives 70% of its revenues from advertising–are especially vulnerable, no media company with television and film ties is safe from a negative financial backlash from a prolonged strike. Even the most diehard TV viewers will be able to stomach only so much reality and rerun programming, making advertiser makegoods essential. The broadcast networks’ aggressive sale of scatter inventory at as much as 40% premiums to upfront prices has created an artificially tight market that pushes the inevitable reconciliation of advertiser makegoods into early 2008.”
“…The group of key target consumers that are mainstays of both television and the Internet will provide the most intriguing insight to how old and new media will fare during these times of high drama. “With TV already less important to the all-important 12- to-34-year-old demographic, a prolonged strike, particularly for television, risks further eroding consumers’ interest in the medium,” observes Pali Capital analyst Richard Greenfield. Unlike the 1988 writers’ strike, television can expect to reclaim even fewer of its loyal viewers and advertisers when the dust finally settles on the current conflict, since the media world is now dominated by many more viable competing options for their time and money.”
Another article, on ADOTAS, predicts thet the writers’ strike may give rise to web TV, the very subject addressed by the strikers:
“…The big question being asked at this time is if this strike could inadvertently give a leg up to the web.
As many shows are going to reruns, users are generating more content and online content is being produced in abundance. The Associated Press quoted Duncan Riley on the Techcrunch blog to say “The trends in viewer numbers have all been headed online to this point; this strike could well accelerate this trend, particularly if it lasts over the long term. It will be a chance for millions online to bloom.”
The strike is addressing this exact thing. The Writers Guild of America is asking for a percentage of the revenue generated online from their work, however the Alliance of Motion Picture and Television Producers say that it is still too early to understand if and how the traditional media will capitalize from online exposure.”
November 8th, 2007
“The concept is simple: Take the millions of lines of time-stamped playlist data from the signage network, place them alongside the millions of lines of time-stamped sales data from the POS, and compare. Look for patterns that reveal which bits of content are having an impact on sales,” writes James Bickers of Self Service World magazine and digitalsignagetoday.com in his article, recapping the latest approaches to measuring digital signage campaigns effectiveness in retail.
James is focusing on the fact that POS data analysis can help one define which type of content or specific content version resulted in better sales - and I totally agree with that. I would add, however, that, apart from the content, you can also test-change-analyze-change-test, etc. - all kinds of scheduling variations: was the day part picked right?; if there were several day parts, which one worked best?; was the frequency (loop saturation) right? was the overall loop length set right?; did the ad adjacency to other content play any role? did competitive ads or their absence have an impact?, etc.
There is more and more talk nowadays about reinforcing this type of campaign effectiveness analysis, that, by definition, can be done only in e-commerce and in retail digital signage. When such applications are standardized and mass produced they will pave the way for digital sigfnage to become part of mainstream media.
November 7th, 2007
Digital outdoor media was further defined and validated as a new and unique medium by outdoor industry visionaries at the Out of Home Advertiser Forum in New York last month. Their analysis was summarized in today’s OAAA newsletter as follows:
• Digital outdoor is not mobile television:
As such, it shouldn’t be used like or created
as television. The message is clear: outdoor
creative requires a unique perspective
and recycled print or television ads
just don’t cut it.
• Digital media’s greatest value is as an ad
delivery device: The speed and flexibility
digital allows enables advertisers to use
outdoor in targeted, time-sensitive ways.
It’s a perspective advertisers have never
had before, and it adds depth and
breadth to their marketing tool kits.
The above are the conclusions CBS Outdoor, Clear Channel and JC Decaux executives came to during a panel discussion at the Out of Home Advertiser Forum, hosted by the OAAA, TAB and ANA, as Nancy Fletcher reports in the newsletter “Outdoor Outlook.”
Answering the question what advertisers really want from Outdoor, another panel stressed the importance of metrics and good content:
• The need for qualitative and ROI research:
Panelists expressed regret because too few
outdoor companies offer research testing
as part of their proposal. Given the sketchy
metrics available for many non-traditional
formats, advertisers have to rely even more
heavily on performance evidence to support
media usage.
• The need for creative assistance:
Advertisers know how hard it is to design
compelling outdoor creative and they want outdoor
companies to assist in this regard, even including
it within a proposal.
According to OAAA’s Nancy Fletcher, the forum participants also reiterated the usual wish list: outdoor media space should be easier to plan, easier to buy and be more accountable.
“The panel consisted of notables – led by ANA President & CEO Bob Liodice, and including David Verklin, CEO of Carat Americas, Doug Checkeris, CEO of Mediacom USA, and Silvia Alvarez, Media Director of Zubi Media,” said the newsletter.
I find that the forum’s insights are highly relevant not only for the digital component of the outdoor media (billboards), but for the digital signage industry as a whole. I would like to emphasize the following three statements in particular:
- Digital outdoor media offers the speed, flexibility and targeting “advertisers have never had before.”
- In the absence of other metrics, advertisers have to rely “even more
heavily on performance evidence to support media usage.”
- Advertisers want assistance in producing good content that will not be recycled print or television ads.
November 5th, 2007
Ken Liao from SeeSaw Networks sent this great response to Daniel Parisien’s post “The Dirty Little Secret of Digital Signage: Proof of Play vs. Audited Proof of Display“:
“Daniel – great topic. We, at SeeSaw, whole-heartedly agree with the industry moving toward much greater accountability. It is refreshing to see your position that proof-of-play goes beyond logs of a playback device and needs to focus on playback at the screen level.
While we generally agree with your four components of an accountable digital signage reporting solution, we would respectfully add two additional factors: traffic and awareness. Traffic is represented the foot traffic passing by a specific location (the potential viewers) and awareness represents the percentage of people that are aware that a digital signage device is in place, displaying content. Everything in the system can operate perfectly, playback on the device is logged correctly, screens are on and displaying ads correctly – but without foot-traffic and awareness, there is no measurement of how many people actually SAW an ad.
By adding these two data components, the advertiser now has a more complete picture of their digital signage campaign’s performance. As Tom (Muniz) mentions, it’s imperative that standards be put forth by those looking to lead this industry.”
I think Ken brings a highly valid point: in order to get reliable impressions numbers, you need to measure the audience and match that data with the proof of play (rather, proof of display, as per Daniel’s definition).
The problem is, in the real world, a lot of networks have neither accurate proof of display stats, nor regularly updated audience measurements. The audience surveys are very expensive and are usually done only once in a few months or once a year at best. So, the accountability becomes fuzzy.
This could be resolved first of all by improving the proof of display reporting process, and, secondly, by implementing digital monitoring of viewership.
Digital cameras that capture every instance of a customer looking at a sign, the duration of eye contact, often even the age, gender and ethnicity of a viewer are already available on the market. The monitoring is real-time, and various types of reports can be generated based on that data. This new technology allows networks to deliver the ad impressions numbers as “hard” data, as opposed to the “soft” data, when only a sample of audience is polled by way of traditional exit interviews and then the results are extrapolated to the whole “universe”.
Such proof of performance can be sufficient to analyze the effectiveness of media spending in a non-retail environment. In retail, however, the ultimate goal is sales lift (see the previous post on the topic), so the campaign performance picture would be completed if sales conversion data is added to the two previous tiers, i.e., proof of display and audience measurements.
Earlier this year I proposed draft definitions of ”the three tiers of accountability” for in-store digital signage:
Tier I:
Proof of ad delivery: How many times was my ad displayed on the targeted screens, in what markets, locations, sites, and over which period of time? Such analysis requires robust proof-of-play reporting mechanisms. This level of accountability is critical for justifying billing per campaign and reconciling invoices. It also facilitates pricing your airtime, if you want to base it on the cost per ad play.
Tier II:
Proof of audience delivery: While my ads were served, how many customers had the opportunity to see them, or actually saw them? The trick here is: you cannot prove audience delivery without having accurate proof of ad delivery first.
Tier III:
Sales uplift measurement. This is the crowning achievement of advertising effectiveness analysis that has become easily available so far only in Internet advertising (when it is combined with e-commerce) and at properly set up in-store digital signage networks. It requires correlation between ad campaign data and POS data.
November 2nd, 2007
… for sales, and, may be, a little bit of branding along the way.
11 out of 12 experts quoted in Laura Davis-Taylor’s article “Branding or Sales Lift? Having it Both Ways” spoke in favor of using in-store digital signage for generating sales lift, while the branding function is performed in the background, as an ancilliary process. The article was published in the October issue of the Marketing At Retail magazine and continued the ’branding vs. sales uplift’ debate that, according to Laura Davis-Taylor, is still raging in the industry.
Frankly, I wonder why the debate is still even on. There are already so many existing vehicles for branding, why misuse digital signage airtime when it is best suited for closing a sale?Perhaps there are a lot of agencies and individuals with deeply vested interests in expanding their branding expertise and services into the lucrative world of retail digital signage. Even then, I see no contradiction here: if branding originates somewhere else, use digital signage to extend that campaign and to actually sell the product. What I don’t see is how digital signage can be used as a primary brand-building vehicle.
My naive thoughts: selling can exist without branding, but can branding exist without selling? And, after all, is there a better way to complete a branding effort than to make a sale?
However, I am glad to see that common sense prevails.
Here are some eloquent expert quotes selected by Laura Davis-Taylor, a renowned retail media consultant, from the RetailWire BrainTrust Query results:
Professor John Greening, Sector Head, Advertising; Associate Professor, Medill Graduate School of Integrated Marketing Communications at Northwestern University:
“Marketers need to look at in-store for what it is rather than trying to transfer another medium’s strength and weaknesses onto it. In the store, aperture is different. At home, I’m in ‘lean back mode’ and looking for a distraction. In the store, I’m ‘leaning forward’ and trying to accomplish something-shopping or buying. So, if the media is not helping me do what I need to do while there, it may end up being distracting or aggravating.
The effectiveness of any medium is always the message. So what we need to do is rethink what types of messages we serve up at each point in time of the brand experience. What makes sense in-store? The message of ‘branding’ in-store gets confused because in the glory days of TV we were all about maximum entertainment. Anything price and item or sales focused was seen as sacrificing the brand. Not true if that information is helping me make a decision on the spot in a store.
Valuable, helpful information at the point of purchase builds the brand in a direct way (like direct-response TV does) while still focusing on results generation. And TV entertainment spots (AKA branding messages) are not the kind of messages that will do this. So the answer is that the brand CAN be built in a store…Just in a different way that’s tied to results!”
Mark Lilien, Retail Technology Group:
“Some marketers push ‘brand-building’ instead of ‘sales’ because deep down they don’t know how to build sales more productively. So they go for the ‘easier goal’: gross rating points. The accusation: it’s easier to buy an audience than to get an audience to buy.”
Philip Straniero, Executive in Residence, Western Michigan University:
“As a Trade Marketer by profession, I am always slanted to take the side of increased sales lift. This is surely a result of my training and a point of view that in-store investments need to deliver increased sales lift and reach a return on investment hurdle rate. I also think that there are ways that these types of tools can be used to grow brand equity with the consumer but the advertising message must be tailored to an inclusionary (not a primary) focus of the in-store advertising.”
Bill Robinson, Senior Executive, QuantiSense:
What do shoppers want, especially when they are in the store? In my experience they have very little need to hear about the brand, unless the brand message is tied to something useful. Usually they want some information about a product or a line that they are interested in. Unfortunately, in-store product information is woeful in almost all stores. Product marketers, if you use your new displays and interactive gadgets to provide this type of useful information, sales will increase. And yes, build your brand in the background, unobtrusively.”
Nikki Baird, Managing Partner, RSR Research:
“In-store digital media is about sales and brand building and entertainment for the shopper. But the implementation costs should be justified by the sales lift alone. If you can get enough value out of your implementation from the promotional opportunities to justify the investment, then the rest – ‘soft’ benefits from a business case perspective – are a bonus.”
Don Delzell, Principal, Retail Advantage:
I believe that the primary reason sales lift is the dominant use of in-store media is that the brand objective ( at the retailer level) has already been met. The consumer has already chosen to shop there, and the beneficial value of reinforcing the belief system through additional brand message delivery is relatively low – particularly when compared to the opportunity cost of using that time and space for an objective not met.
If the retail brand objective isn’t sustained by the shopping experience, using in-line screens to deliver it isn’t going to change the overall consumer affect. We need to reinvent the content so that it accomplishes both purposes. If the product being presented manifests the brand message (and shouldn’t it?), it is possible to script the content so that both product specific messages and brand reinforcement are delivered.”
James Tenser, VSN Strategies:
“The shopper media environment offers layers of higher value for brands – measurable interactions, purchases, and repeat purchase behavior – that should be more valuable than gold to brands. Don’t let the glowing screen fool you. This is not TV. Shoppers view in-store media on their feet, in a distracting, highly stimulating environment, while engaged in a utilitarian, decision-intensive chore. If we deliver and document customer actions, ranging from ‘show me more information’ on up to loyal behavior, we should expect brands to pay lavishly.”
And, finally, as Laura Davis-Taylor put it herself:
“But think about this: Whatever your perception of branding is, it is a means to an end, and that end is sales. Do we spend millions and millions of dollars on marketing to create positive brand perceptions just for fun? No. We do it to ultimately translate into business and dollars. Do stores want to expand on “store as media” just to give people cool places to go? No. They want them in stores and coming back, often buying more. … Branding is one of the many tactics …, but sales will always be the ultimate goal”
I want to thank Sara Dechamps for helping me retype these precious quotes from the hard copy of the magazine.
November 1st, 2007