Archive for September, 2007
Retailers are gradually getting used to the idea that, through in-store media, they now own the largest mass media outlets, the advertising real estate that is growing even faster than Internet (see previous posts). Digital signage networks, in turn, are the fastest-growing segment of retail media.
One of the pains of such fast growth is that, unfortunately, very few digital signage networks have people with media sales background on their staff. Quite often the people in charge of selling network airtime try to re-invent the wheel, running into problems that could be avoided should they have media sales experience.
I asked Ian Dobson, VP of one of the largest national retail networks in Canada, Neo Advertising Canada, to share his views on how to sell airtime in digital signage.
Q – How do you get agencies interested in your ad space? What are the criteria by which they decide if they want to buy it or not?
ID – Ad agencies buy environments and audiences. They want positive results. They want to visit a location and see their ad running and in exceptional quality. They want to hear from their clients that they received positive feedback from customers; uplift in sales, visibility etc. They want to know if their competition is advertising on your network. They want to know where you reach their audience and if you engage them with your content. If the campaign strategy includes an environment where a network is located, they will look and consider it.Q – What exactly do media buyers want to see in your media kit? Do they care about details like loop length, day parts, etc.?
ID - Media planners certainly want to know about loop length, day parting and other critical features of the network. Loop length determines how many times their ad will be seen in a day/week and month. Day-parting allows them to really target their campaign to reach the audience of choice. Most planners are not using this feature enough yet but will as they begin to use digital signage more in the future. Media kits must contain relevant and accurate information on the network and the environment; weekly and annual audience numbers, screen location, network features, unique advertising programs, rates and network specs and contact information. Printed media kits are out – electronic kits are in. The media kit must be supported by an exceptional and easy to use website.Q – What do you think the ad sales efforts should be focused on: national advertisers or local?
ID - Our main focus is on national advertisers. That’s where you’ll make the majority of your revenue. Build your agency/account list and monitor daily the strategy and deployment of upcoming campaigns. Stay in constant contact with agency planners/buyers ensuring they are aware of special promotions and new network features. Local advertisers must be respected. Digital advertising is affordable and most advertisers are interested in only 1-5 locations so they can be encouraged to buy more and longer time on the network. I believe the best way to attract interested and qualified local advertisersis by running a “interested in advertising?” spot on the network. If they’re interested, they’ll call or visit the website. This will eliminate “tire kickers” and save you time and money.Q – Aggregation of digital signage ad space: is it happening in Canada?
ID - Offering advertiser’s ad space on different networks sounds good for the advertiser. It does though raise a lot of issues. Digital advertising is too young and not mature enough in Canada to begin this process. The quality of networks is questionable. There are a lot of small, under-financed networks that don’t have the credibility yet to participate in the national ad level. Every network has different rates, audiences, environments and advertisers negotiate making it a tedious process to arrive at a final plan. Advertisers in Canada know what environments they are interested in and what networks are there to support their campaigns. It’s a very small number and at this point it’s simpler for them to deal directly with each network.
September 28th, 2007
Retailers and package-goods marketers are shifting hundreds of millions of dollars to shopper marketing, doubling their expenditure in the past three years alone, the latest research says. A draft of the new study by Deloitte Consulting, obtained by Advertising Age, reports that shopper marketing is growing at a faster rate than Internet.
‘The growth comes despite the fact that marketers have yet to figure out how to define, measure or administer their shopper-marketing efforts,’ says the report. ‘The study finds shopper marketing has grown from 3% of the overall marketing budgets of the 19 package-goods manufacturers surveyed in 2004 to 6% this year. The manufacturers expect it to reach 8% of marketing budgets by 2010.’
Although , according to the report, “There is wide-ranging debate across the industry on what comprises shopper marketing,” digital signage (or in-store TV, as AdAge puts it), is definitely part of this media, that also includes floor or shelf ads as well as in-store static signage and displays.
More good news for us, digital signage vendors… Should we finally brace ourselves for the long-awaited tsunami of ad dollars?
September 26th, 2007
James Bickers published this article on digitalsignagetoday.com about measuring the effectiveness of advertising campaigns in retail. Following the solid return-on-the-advertising achieved by ‘pay-per-click’ and e-commerce, marketers today want the same level of accountability from other media. This is one of the reasons traditional network TV spots are going out of favor: they are expensive and it’s hard to prove that anyone watched them at all.
Potentially, digital signage in retail can offer the same or even higher accountability than online advertising. Once the customers are in the store, they have a broader choice of goods to buy and they are more responsive to relevant product info because they are already in the purchasing mode. So, it seems obvious that you should be able to look at the digital signage campaign schedules and content data and see if the campaign had any effect on the Point-of-sale transactions.
Sounds easy? Not quite, say the experts interviewed: Bill Gerba, June Peoples and Dick Trask. There are challenges to overcome, such as: correlation of large volumes of non-standardized data, reluctance on the part of some retailers to grant access to their POS reports and the need to integrate digital signage in the overall in-store marketing strategy.
But still, I would say, it’s not rocket science… and both databases are digital after all. I think it’s fair to expect someone to come in and make it easy to track sales uplift against digital signage campaigns within the next 2-3 years. DS-IQ seems to be firmly in the lead in this field. I wonder why nobody else is claiming this niche opportunity.
September 25th, 2007
Adweek’s article today pictures a bright future for Out-of-home advertising, and especially for the digital billboard technology. “Next year,” Laureen Miles writes, “total spending on out-of-home will skyrocket 12.8 percent to $8.94 billion versus this year, per Veronis Suhler Stevenson. PricewaterhouseCoopers predicts more conservative but still outstanding growth of 9 percent to $8.12 billion in 2008, on top of this year’s 8.9 percent surge. Out-of-home is the second-fastest growing ad medium behind Internet, with projected 8.2 percent compound annual growth in the 2007-2011 period, according to PwC.”
Lamar Advertising digital billboardLamar Advertising currently has the largest electronic billboard network in the United States with at least 150 billboards deployed at this time. Photo credit: Lamar Advertising
Although static billboards are growing as well, digital billboards are leading the expansion of Out-of-home: “Billboards, both digital and static, constitute 65 percent of the out-of-home market, per PwC. The double-digit gains billboard have enjoyed since 2005 are projected to continue into 2008, mostly due to the growth in digital boards, which can generate 10 times the revenue of a static board,” said Stefani Kane, partner in PricewaterhouseCoopers’ Media and Entertainment Practice.
While digital billboard inventory has exploded, demand has stayed high, and so have rates. The targetability and changeability of digital boards and better measurement have kept prices aloft, experts say. “All this gives added value, so we’re not seeing a high slippage in dollars,” Kane explained.
September 24th, 2007
This piece, published today, says the InfoTrends study that came out this summer, valued the narrowcasting industry (in this context meaning digital signage) at $1.1billion at the end of 2006, claiming an installed base of 630,000 screens at 97,000 sites.
“Compared to the 2004 statistics,†says the preamble to the study, â€these numbers represent a CAGR (compound annual growth rate) of 56%. This growth marks the first time that the narrowcasting industry has exceeded previous estimations and represents a significant turning point.
North American Narrowcasting Industry Revenue 2006-2011
By 2011, InfoTrends sees North American digital signage revenues exceeding $2.5bn.
An earlier study, by Profitable Channels, estimates the ad spending on Out-of-Home digital media in 2006 at $1.2 billion. The research summary says Out-of-Home digital ad networks are part of the new digital media ’slice of the marketing and communications pie’, which grows at a rate of over 20% a year.
September 24th, 2007
It is quite gratifying to see a confirmation of the trends that we at BroadSign have been watching emerge first-hand since 2003:
Here are some of them:
1. Retail is the fastest-growing segment of digital signage because it is fuelled by advertising and promotional budgets, and it provides direct and more effective access to the mass audience lost by traditional media. This article by advertising analyst Nigel Hollis quotes market research firm Frost & Sullivan as saying that by 2011, 90% of retailers will have in-store digital screens.
2. Once a network is conceived, it becomes a mass medium, so it should be driven by content strategy, not technology. Otherwise it will fail (as in Tesco example). Also see Lyle Bunn’s article Digital Signage 3.0 on the subject.
3. In areas with high foot traffic volume, longer ads will not work. I remember when three years ago we recommended 5-7 second-long ads versus 15- and 30-second ones to a big box retail network owner, they looked upon us as if we had escaped from a lunatic asylum. It is music to my ears when Nigel Hollis says: “In the U.K., the major grocery chain Tesco endured three years of lackluster results before figuring out what really drives in-store success: brevity. While online advertisers debate whether a pre-roll of 15 seconds is too long, Tesco’s marketing partner Dunnhumby recommends five seconds for screens placed in the main shopping aisles.” My feeling is that soon we may come across super-short, 3-4 second ads in areas with dynamic customer traffic.
4. Digital signage ads do not have to be fancy and expensive to make, as their power ”rests not in their creativity but in their proximity to purchase,” as Nigel Hollis puts it. They just have to be well-made, attention-grabbing and effective. We are seeing a whole new industry being born: digital signage content producers. These people will not offer you to re-purpose TV commercials, they will use your images or create new ones and produce digital signage-specific content tailored to your campaign goals, at a fraction of the price of a TV commercial.
5. Digital signage is not for branding. By its nature, it is best suited for boosting sales and generating cross-sell and up-sell. Why waste money trying to brand on digital signs, while you can actually move products off the shelves? According to Nigel Hollis: “The (in-store video) alerts reported to be most effective are those for price-off events and new or seasonal items.” And , he contines: “Because its (in store video’s) influence is concentrated at the point of purchase, it will be most successful for categories that are already impulse- or activation-oriented. Though useful for encouraging switching, in-store video is not as good at building long-term brand loyalty.”
For other recent insights into retail digital signage, see Retail Digital Signage research paper by digitalsignagetoday.com, and my interview with five experts: retail_digital_signage_from_niche_to_mainstream_nu_article_april12_07.pdf
September 20th, 2007
Windows Media Player, the omnipresent playback engine used by most digital signage applications, may no longer be included in the Windows OS by default.
A top European Union court has rejected Microsoft’s appeal of the 2004 ruling by the European Commission which included, among other things, the requirement to stop “bundling” Windows Media Player with the Windows Operating System.
This may affect several digital signage software vendors directly, since Windows Media Player is the playback engine behind a majority of the digital signage software packages available today. You can identify packages which rely on Windows Media Player by two distinguishing properties:
1. They do not support Linux (Windows Media Player does not run on Linux).
2. They require you to install third party codecs such as DivX, MainConcept or Elecard/Moonlight (Windows Media Player comes with MPEG-1 and WMV playback only).
Depending on how Microsoft complies with the court’s decision, this development may force some vendors to adapt quickly or risk leaving their customers with a bigger bill per playback device or worse, no upgrade path.
September 17th, 2007
P&G has restated 11 years of ad spending data in its annual report filed August 28, Advertisng Age wrote earlier this month. Procter and Gamble’s ad spending will now include expenditures such as in-store advertisements but will omit the salaries of ad execs.
The adjustment changed the ad-to-sales ratio for the past decade, which, P&G says, shows where the ad money went more accurately, and also makes the numbers look better to investors. However, the most significant part for me is that in-store media, including Wal-Mart TV, got a legitimate ‘place alongside other media spending in the nearly $8 billion budget of the world’s biggest advertiser.’
In its press release on the subject, P&G acknowledged diverting ad budgets from network TV towards consumer-centric media: “Over the past few years we’ve been looking at ways of improving the effectiveness of our marketing spending,” a P&G spokeswoman said. “As a result, we’ve been shifting more of our dollars away from traditional TV and toward other media, including in-store. … So we thought it was important to include in-store in our disclosed advertising spending.”
Procter and Gamble’s move comes as retail media (and it’s modern wing – digital signage) is being increasingly adopted by retailers, major advertisers and even TV networks themselves. According to Financial Times, the acquisition of SignStorey digital signage network by CBS ‘is evidence of the burgeoning popularity of in-store advertising, which allows companies to target shoppers just as they are about to make purchases.’
‘The category remains small’, says FT, ‘compared with the estimated $75bn spent on television advertising each year. Yet it appears to be gaining acceptance among advertisers at a time when television audiences are fragmenting amid competition from the internet and cable, and technology is allowing viewers to skip past commercials.
Wal-Mart was one of the first retailers to establish an in-store television network. The retailer has more than 125,000 screens in more than 3,000 stores, featuring programming from companies such as Toyota and Bank of America.
Meanwhile, Target, Best Buy, Circuit City and other US retailers have launched in-store television.
CBS is not the only television network to move into the in-store market. In July, NBC Universal deepened a partnership with Premier Retail Networks, a Thomson-owned company that operates one of the largest in-store television networks. As part of the deal, NBC agreed to supply short-form video content to PRN,’ writes Financial Times.
September 17th, 2007
Many potential retail clients are asking us to give them an A-to-Z on how to build their network. Being a software provider, we can certainly help them with advice, but implementing a network is a multi-disciplinary expertise, while our focus is more on the network management side. This article by Extended Retail Solutions gives a good overview of where to start if you are a retailer considering a digital signage network.
September 13th, 2007
Software For Digital Signage: Research Paper by digitalsignagetoday.com This is probably the first free how-to guide that gives a new network operator a way to see how digital signage is different from TV and why you actually need appropriate software to manage a network. The paper contains a brief overview of digital signage business models and software market, case studies and tips.
September 13th, 2007
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