Posts filed under 'Digital Signage ROI'
DOOH Forum by Media Post, April 23, 2008, the Yale Club of New York, NY, NY.
This was probably the most authoritative conference on DOOH. It gathered some of the best brains from the digital signage and mainstream advertising industries. The Forum was the first event on digital signage organized by Media Post, with the Wall Street Journal as the main sponsor. There was almost no tech-talk. The focus was mainly on how advertisers and agencies are changing their view of this fast-spreading medium, the barriers to its broad adoption by media buyers, and the increasingly important role DOOH is playing as an alternative to the stagnant TV. The DOOH Forum was followed the next day by the Outfront conference - reflecting on how traditional media (namely, network TV), is adapting to the changing realities.
The DOOH Forum was also the most sold out conference I have ever seen. All the seats at the tables were taken early, then the organizers had to make extra rows of chairs in the back, and when those were filled, the balcony got packed to the limit.
You can see the list of speakers and the agenda here.
Here are some highlights and observations from the discussions:
- Several speakers (including outside analysts) named DOOH as the’hottest medium’ today, and it is spreading even faster than internet in its early days, because of its ability to reach consumers when they are away from home, its unintrusive nature, and its proximity to point of purchase and point of decision.
- After a few years of soul-searching, two terms seem to have stuck to the wall to describe the industry: ‘digital out-of-home’ and ‘digital signage’. Some still insist on using the term ‘place-based media’, but Google Search doesn’t return many results on that one.
- Agencies are now under pressure from both ends - advertisers and DOOH networks - to include digital signage in the media mix, so they are finally starting to embrace it as part of an “integrated approach” to marketing strategy, or “360 degrees marketing”. The issue everybody is struggling with is the metrics currency: what is the currency unit they should use while planning, buying and reporting on campaigns. At this point it takes agencies several times more effort to allocate a few million $$ to a DOOH campaign compared to quick and easy multi-million-dollar TV buys. The issue of commission is also not resolved in favor of DOOH yet, and that makes agencies reluctant to use it overall.
- The new Audience Metrics Guidelines developed by OVAB are expected to be endorsed by the AAAA and ANA by the end of this year and adopted by networks and agencies as a common currency for negotiating DOOH buys.
- Although DOOH has an enormous potential in achieving the ultimate goal of advertising: ‘move the merchandize’, the whole traditional media planning and media buying infrastructure is built around the CPMs and GRPs that are based on Nielsen ratings - which in turn are based on elusive “impressions”. The accuracy of the current media effectiveness measurement was best described by Mr.Jack Wakshlag, Chief Research Officer of Turner Broadcasting System. On the second day, at the Outfront conference, after a few hours of detail-heavy scientific discussion of existing TV audience measurement methodologies involving Nielsen, TNS and IAG, Mr. Wakshlag exclaimed: “All I want to know is who is watching my ads. I (still) cannot get a straight answer!”.
- As for who watches TV ads: a speaker asked how many people in the audience watched a full commercial pod lately. Three raised their hands, all three turned out to be media buyers…
- Speaking about the current metrics system, OVAB’s president Suzanne Alecia said on the panel: “It took TV 50 years to come up with C3 (average commercial minute ratings, as opposed to program ratings, (NU)); it took Outdoor 100 years to come up with Eyes On (a method of determining how many passers-by actually looked at the billboards, as opposed to just passing traffic numbers (NU)); and it took us 18 months to achieve better results with our Audience Metrics Guidelines” (for the whole DOOH industry).
- Nielsen is introducing audience measurement methodologies for digital signage and conducts field studies with several DOOH networks. See details here.
- Arbitron is using its PPM device for audience measurenment in DOOH. The company is also testing the use of PPM for verifying proof of play data delivered by networks run on BroadSign Suite platform.
- Several speakers made it clear that even if the new ‘perfect’ metrics were introduced now, it would not cause agencies and national advertisers to start buying DOOH space immediately. Everybody openly agrees that “impressions” are a very deficient way of measuring a campaign, but the 70 billion-dollar TV advertising industry rests solely on them, and the inertia among traditional media buyers is still omnipresent. Therefore, in order to get to the negotiating table now, experts recommend to ‘not try and be too clever’ and to ‘dumb your offer down’ - i.e., show impressions, CPMs, reach and frequency, so you could be compared to TV or print.
- In the meantime, Nielsen’ 50-year-old monopoly on audience measurements seems to be eroding quickly - even in TV. A number of smaller companies with advanced technologies are making their way into the space. As media is going digital, including TV, measurements are increasingly based on digital technologies as well, thus becoming cheaper and providing data that is richer and more accurate. With TV in the US switching to digital in February 2009, the only analog medium left will be print.
- The old formula is: what gets measured - gets bought. However, for decades, traditional media has been able to get away with “impressions”, that provided the basis only for a semi-intelligent buying decision. These days are numbered, says Tim Hanlon of Ventures, Denuo. ‘Digital’ changes everything. No medium will escape granular metrics.
- There is a growing understanding among media buyers and planners that working in traditional silos (TV, Radio, Print) is a thing of the past. Many agencies have adopted an integrated approach (also known as 360 degrees marketing), when they carefully examine the client’s needs first and then create strategies across multiple media, including online and Outdoor/Out-of-home. The attitude towards new media is changing to more positive nowadays.
- Tip: if DOOH ad sellers want to be considered for a media plan inclusion, they should talk to everybody involved: agencies, media buyers, planners, advertisers (directly). As the whole media industry is in transition, there are no more clear-cut recipes for getting on media plans. If you can prove you can deliver a certain demographic in certain markets, you may be heard. Even better, if you allow the buyer to cherry-pick demos in addition to broad buys. Getting the attention of a strategic media planner increases your chances for success, industry insiders say.
- A lot of buyers are sitting on the fence, waiting for others to take a lead in DOOH. But, according to Tim Hanlon (Ventures, Denuo), buyers are ‘fast followers’, not pioneers by nature. Once a few major buys happen, the competitive pressure will trigger a domino effect.
- DOOH ad space aggregators like SeeSaw have a bright future as a single point of contact for buyers, as long as they manage to offer standardized buys by demographics and markets.
- The entry of big traditional media players like NBC, CBS, Viacom, Clear Channel, JC Decaux, Publicis, WPP, Omnicom, Wall Street Journal, Nielsen, Arbitron and others into DOOH makes both advertisers and buyers pay attention, brings national scale, and facilitates entry for other viable DOOH sellers. It is also a sign of a growing market maturity and consolidation.
- DOOH is doing very well in the recession.
- The lack of new, DOOH-era creative is still a big issue. Many networks have to set up their own creative shops to deliver the best value to clients. Re-purposing TV commercials is unacceptable, but most advertisers still have no clue.
- The long-awaited tipping point for digital signage is now.
Also, read Joe Mandese’s coverage of the Metrics panel discussion here. And a detailed coverage of the discussions by digitalsignageuniverse.com here.
April 28th, 2008
Last week the Traffic Audit Bureau (TAB) - the US Out-of-home media auditing organization - unveiled its new ratings system for the industry. Not only is the system a milestone for the outdoor ad business, but it also breaks new ground for media ratings as a whole, writes MediaWeek. Here are some excerpts from the article by Katy Bachman. My comments are at the end.
“Nearly five years in development, the Eyes On ratings will replace the decades-old practice of relying solely on traffic counts to put a value on outdoor ads. The ratings will, for the first time, provide discrete demographic data pertaining to around 400,000 units. The service will go a step further than TV and radio ratings to incorporate the number of persons likely to see an ad as they pass a display.
“It’s a dramatic improvement in outdoor measurement. Quite frankly, it puts us in a position of having a better measurement system than any other medium,” said Paul Meyer, president and COO of Clear Channel Outdoor.
Eyes On has broad support among outdoor media companies, agencies and advertisers, which worked closely with the TAB to design a ratings system uniquely suited to the outdoor medium.
Practically owners of the new system, media companies invested millions of dollars, effectively rejecting The Nielsen Co.’s GPS-based survey, which was tested in Chicago and Los Angeles.
The writing may be on the wall for Nielsen, but the research giant is not giving up. “We continue to talk to interested parties about our service, which offers superior results,” it said in a statement. “We think it’s the best answer for the U.S.” (Mediaweek is part of The Nielsen Co.)
The TAB is scheduled to release the first market, likely Chicago, in June, then report ratings for all 200 markets in late fall. Ratings will be issued twice a year, once to update audience estimates and the second time to take into account changes in inventory.
For outdoor, it’s a huge change that will affect every aspect of how the medium is bought and sold. Marketers will now have the kind of metrics they need to evaluate outdoor alongside other media. Planners will be able, market by market, to determine weight and take into account an outdoor mix of billboards, bus shelters and posters.
“It’s a sure thing advertisers will spend more,” said John Connolly, COO at Kinetic, the world’s largest out-of-home agency and part of WPP. “A lot of agencies use optimizers, and they’ve never been able to plug in out-of-home.”
“For a lot of clients, we’ve had to sell outdoor into the plan as a test. The new ratings could open up new categories and new advertisers to outdoor,” said Jill Nickerson, vp, director of out-of-home at Horizon Media. “Packaged goods have always wanted more validation and more measurement because they’re used to national broadcast.”
Out-of-home advertisers also will be able to aggregate local campaigns with more efficiency.
“We can promote ourselves as a national medium, particularly when you can compare CPMs across markets,” said Tony Jarvis, executive vp, global research at Clear Channel Outdoor,” reports MediaWeek.
It is not clear how Eyes On will affect measurements of digital billboards, but the elevation of OOH’s status as a whole to that of a viable and measurable medium and its broader inclusion in the media plans will certainly benefit the digital OOH segment. The introduction of Eyes On that follows the advances in measuring the effectiveness of internet advertising (notably - Google’s paid search marketing metrics) is essentially putting the TV industry on the defensive. Ironically, TV now has to play catch up with the new media, as advertisers demand at least the same level of transparency to the ad spend. The recent launch of C3 - or average commercial minute ratings for cable and network TV is regarded by many in the advertising community as an insufficient measure that would not last long. Some analysts think it will have to give way to a more modern and accurate way of tracking ad dollars.
April 21st, 2008
Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, reports Ad Age, quoting PQ Media’s Alternative Media Forecast: 2008-2012, released last week. The research firm tracked 18 digital and nontraditional segments, with a combined 16.1% of total advertising and marketing dollars in 2007, up from 7.9% in 2002, yielding a compound annual growth rate of 21.7%, writes Ad Age.
The forecast predicts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.
Digital signage, or, ‘digital out-of-home advertising’, as it is called in the report, got a special mention from PQ Media. Here’s an excerpt from Ad Age’s interview:
‘Where the money is going…’
The upswing is as much a result of the effectiveness of new media in a fragmented market as it is from a lack of confidence in traditional media, said PQ Media President Patrick Quinn. “Traditional ad budgets have been going down, but spending has remained stable. This shows where the money is going,” Mr. Quinn said.
“There is a lack of standards in these new areas,” Mr. Quinn added. “Digital out-of-home advertising is getting recall rates as high as or higher than traditional mediums, but there are few studies on this. They’re going to need more and deeper metrics: The bar is being raised across the board.”
So, researcher Patrick Quinn added his voice to the unanimous acknowledgement of the ‘lack of standards’… This is where our industry stands now. As we wrote in many of our previous posts, the money have started pouring (or rather, trickling) into digital signage advertising even before the standards and metrics are introduced. This is a good sign. However, the danger is that until the metrics are in place:
- digital out-of-home will have a hard time demonstrating its enormous potential and will not get the deserved share of budgets in the media plans soon enough, compared to other, more measured, but not necessarily more effective alternative media.
- lack of ROI measurements and disparity in buying standards may lead to a disappointment of first-time advertisers, who may choose not to repeat their campaigns. It might be hard to win them back for a while.
The ball is in the court of the OVAB and other organizations working on bridging the gap between heterogenous networks and the media buying habits (and stereotypes) of the mainstream advertising community. Rumour has it that OVAB is making good progress in high-level negotiations with advertising trade bodies to agree on the terminology and the currency for buying digital OOH space. OVAB’s member base has grown rapidly since its launch over a year ago, and it keeps growing, judging by the news coverage.
March 31st, 2008
As of this upfront season, the US division of Starcom MediaVest Group (SMG) - one of the largest media communications companies, will only be buying media that can produce more advanced metrics.
According to MediaWeek, “Starcom USA will no longer do business with unrated networks that are not measured by companies or rating services that can offer documented data on viewership.”
“In prior years, standard industry practice has been to negotiate TV buys from unrated networks based on estimates from those networks and disparate sources,” Starcom said in a statement. “The availability of second-by-second data from companies such as TNS, in its alignment with Charter and DirecTV, allow for national performance metrics for these previously unrated networks and reveal never-before-seen insights into behaviors of those networks’ audiences.”
The move is significant (if it had been in the 80s, I would have said: paradigm shift), as Starcom USA is probably the largest media agency, and when it sets the bar for accountability and ROI higher, others will certainly pay attention. It will also prompt the channels with less adequate metrics to try and comply in the nearest future.
Since the Internet started providing reports on referring sources, targeted impressions, click-throughs and sales conversion data (for e-commerce), it has been enjoying double-digit growth in ad revenue and, along the way, has pushed the standards for accountability for other media. This, along with traditional media fragmentation, led to advertisers’ increasing disenchantment with network TV, and budgets started gradually shifting towards online, Outdoor and now - to Digital Out-of-Home (digital signage).
It looks like Starcom is determined to break the 60-year-old advertiser-agency-media relationship system, which has been centered around network TV and newspapers, while everything else was essentially an afterthought. The TV-era wise joke: ”I don’t know which half of my ad budget works” is not amuzing to national advertisers any more, and agencies are finally hearing this, embracing the most measured medium: digital. Starcom recently discontinued a contract with Donovan Data Systems (DDS) - a near-monopoly software platform for tracking media buys and billings, citing DDS’ inability to eficiently process digital media transactions. The agency’s divorce from DDS sent shock waves throughout the advertising community and put extra pressure on DDS to catch up with its smaller rival MediaBank in introducing digital media management capabilities.
In a separate development, Advertising Age reported last week that digital services in 2007 accounted for 12.3%, or $4.7 billion of worldwide revenue for advertising’s Big Four — Omnicom, WPP, Interpublic and Publicis. “Put another way, writes Ad Age, “digital’s share of revenue at each of the top holding companies is higher than digital’s estimated share of worldwide media spending.” Or, “put another way”, as marketers shift money from TV and print, the Big Four have become more aggressive in increasing their digital spending than the industry on average. Starcom MediaVest Group is a subsidiary of Paris-based Publicis Groupe.
As organizations like OVAB, OAAA, Arbitron and Nielsen are spearheading the development of metrics for digital signage, we can expect similar budget shifts towards our field within the next couple of years. Meanwhile, TV channels are working to offset the losses and bring their own measurement instruments closer to par with the Internet. The war of metrics has begun.
March 24th, 2008
According to the recently released Arbitron study of digital billboards, the ads displayed on them drive traffic to local businesses, radio and TV stations and brand web sites, have a high recall and successfully reach the elusive and desirable 18-34 year-old consumers, among other demographics.
The study, commissioned by the Outdoor Advertising Association of America, was conducted late last year among 402 persons and seven digital billboards operating in Cleveland, Ohio.
Some significant findings of the research include:
- More than half of all Cleveland travelers notice digital billboards and the more a person commutes, the more likely they are to be aware of the displays.
- Public reaction to digital signage is positive. The billboard’s ability to display timely news, traffic, weather advisories and AMBER Alert notices makes the vast majority of commuters (over 80%) feel the digital signs provide an important community service.
- Digital billboards are an effective advertising platform. Over eight out of 10 travelers could successfully recall at least one of the ads running during the survey period and the majority of commuters agree digital billboards are a “cool way to advertise.”
Mediaweek, MediaPost and Media Buyer Planner covered the study (click on the links to read…)
You can download some key findings of the study here: Digital Billboards Study by Arbitron.
March 9th, 2008
The current economic downturn, call it recession or not, forces marketers to re-prioritize their media spend in favor of more measurable vehicles. Ad Age has talked to some top media buyers and sellers about how they expect to survive through the slowdown. I tried to summarize it below.
Network TV’s share will most likely keep shrinking in favor of cable, which offers lower CPM and better targeting.
Digital categories such as email and search will continue to be strong, regardless of the economy, with search marketing being the most recession-proof channel, because it is more measurable than other media and because it’s so closely tied to sales (especially in case of e-commerce). “Digital, in general, does not feel the effects initially because in tough economic times, there is a flight to measurable media,” said Bryan Wiener, CEO of digital agency 360i, in his interview to Ad Age.
Local radio spending will remain stable and might even benefit from the difficult times. Rex Conklin, media director of Wal-Mart Stores, said Wal-Mart already has started using radio for more efficient media spending in the wake of economic recession. “Particularly in a down economy, the advantages of radio are significant in that it’s very local and very flexible, which is incredibly important, especially when you’re talking about pricing.”
Newspapers face some pretty grim business trends, but the outlook will darken further in recession. “It will cut both ways,” said Jason Klein, president-CEO of the Newspaper National Network, a partnership of 24 newspaper companies that helps marketers place national buys. “It clearly is bad news for classified, which is not a good story in any economy for newspapers.” Help-wanted and real-estate listings in particular, which are already bruising papers by migrating to the web, will become scarcer in an economic downturn.
Magazines might need to rely on their web sites, according to Ad Age: “…web sites that can attract ad revenue even in tough times, partly because of low rates and partly because digital remains sexy to advertisers.”
Out-of-home — thanks to new digital and video technologies — has started to take a larger percentage of media budgets, beyond just a portion of what marketers set aside for nontraditional media. However, the potential economic downturn could leave the fate of some of those budgets in limbo. “I hope this recession doesn’t cause clients to exercise cancellation clauses,”Jack Sullivan, senior VP-out-of-home-media director for Starcom told Ad Age.
So-called shopper marketing already was booming, with Deloitte Consulting and the Grocery Manufacturers of Association projecting growth of 20% or more this year, but the downturn may not bring any extra boost, reports Ad Age.
“As consumers get more frugal, CPGs will shift their media to things that have a more immediate return on investment,” Mr. Garga said. “Shopper marketing is a captive audience in the store with an immediate effect. … Online is a medium, too, that supports more value-oriented messages.”
I would add that overall, digital signage, being the driver of growth behind both Out-of-home advertising and shopper marketing, is well-positioned to weather the storm. Such factors as slow but steady aggregation of digital signage ad space and development of standards and metrics are adding to its strength and will eventually make it easier for marketers to divert budgets from network TV and newspapers to this new medium.
February 19th, 2008
Analysts at Yahoo Finance and MediaPost’s Search Insider predict a slowdown in ad spending on traditional media. Both observers, however, are confident that the recession will not affect online advertising, which has been expanding healthily in 2007.
While traditional media is hurt by such factors as the general economic slump, the housing crisis, the writers’ strike and continuing fragmentation of its declining audience, “… the explosive growth of ad networks—firms that place advertising on websites—will make it easier for advertisers to spend money on the internet,” says the author of Five Media Trends in 2008.
According to Mark Simon of Search Insider: “Projections for overall online ad spend for 2008 remain rosy, even as every leading macroeconomic indicator points to a recession ahead. Finance alone makes up 33% of the overall $275 billion online ad spending pie (according to eMarketer.com). You can’t tell me that this sector can take a huge hit without having a big impact on both the search and display market. But online media remains so cheap that the bulk of any spending pullback will hit other channels harder, including offline and high CPM online media.”
What about digital signage? If we sum up the trends we covered in our previous posts (see the Big Picture category), we’ll see that:
- In-store media (shopper marketing) is growing faster than the Internet
- Outdoor advertising is growing almost as fast as the Internet and will be further boosted by the recent US legislation permitting digital billboards
- US consumers are spending twice as much time away from home than they did 30 years ago, and the average daily commute has doubled to about an hour
- The traditional media ad budgets started to be diverted to digital signage ad space even without waiting for the standardized metrics
- Standards and metrics for out-of-home video (aka digital signage) networks are being developed by big players such as Nielsen, Arbitron, POPAI, OVAB and others…
- Many retail chains are trying to reduce the static ad clutter by re-engineering store interiors and letting digital screens in
- There is an explosive increase in inquiries about digital signage from advertisers, media buyers, agencies and retailers
- New trade shows and portals dedicated to digital signage are popping up almost every month
- There is a steep rise in mergers, acquisitions and IPOs in the field of digital signage
All of the above factors make me believe that the digital signage trade will not be in trouble in 2008, and most probably will continue to advance, filling the void left by traditional media.
On this high note I wish everyone a great New Year and I will return from vacation on January 09.
December 28th, 2007
eMarketer forecasts that out-of-home video advertising spending in the US will total $2.25 billion in 2011, up from $1.26 billion in 2007. The growth is fuelled mainly by introduction of digital, video and wireless technologies that are redefining this “old medium”, says the latest report by eMarketer.
The report’s summary points out the following factors contributing to the rise of the out-of-home video advertising (aka digital dignage) market:
THE GROWTH
Outdoor advertising benefits from fragmentation of traditional media audiences and changing media consumption patterns, and, unlike TV or radio is “immune to channel or Web surfing”.
Due to the new technologies, “out-of-home video advertising networks will comprise the largest component of what is described as the “alternative” out-of-home advertising sector.”
According to eMarketer, US outdoor advertising revenues will rise from $6.8 billion in 2006 to $10.2 billion in 2011.
“The falling costs of flat panel LCDs, combined with the emergence of IP and wireless Internet technology” will continue to drive the out-of-home video advertising market. Another significant driver of the sector is the fact that “US consumers are spending twice as much time away from home than they did 30 years ago, and the average daily commute has doubled to about an hour” (Source: Veronis Suhler Stevenson), says the eMarketer report summary.
The growth trend is also confirmed in the Tech Sector Outlook 2008: Part 2 - a report by Standard and Poor’s. Despite “… a deceleration in U.S. growth and notable opportunities abroad,” the analysts “… also expect emerging areas of digital advertising, such as video and mobile marketing, to contribute more materially to revenues.”
NO METRICS YET
Numerous sources also state that the expansion of new media such as Internet and out of home advertising could have been faster if marketers had a set of agreed-upon reliable metrics to gauge the performance of ads.
Unlike traditional media, where each format has one main ratings provider – the Nielsen Co. for television, Arbitron Inc. for radio and so on – there are many sources of data on online audiences. And they frequently conflict, writes Seth Sutel of Associated Press. As for digital signage ad space, the metrics are even further from ideal.
“We need measurement of the audience and their use of the system that’s clear, simple and actionable for a marketer. You need comparability with other media,” said Steve Wadsworth, president of the Walt Disney Co.’s Internet group.
Although the above AP article, published by The San Diego Union Tribune, is focused the challenges of Internet advertising, most of the marketers’ concerns it describes fully apply to digital signage.
The paper quotes Bob Liodice, CEO of the Association of National Advertisers, as saying that “… corporate leaders have been ratcheting up the pressure on marketing departments to justify their ad budgets with hard proof that they are generating business.”
Advertisers seem fed up with the adage that half their ad spending seems to work; they just can’t tell which half, writes AP:
“CEOs finally said enough is enough,” Liodice said. “We have to know with greater specificity what comes out when something goes in.” — a deep statement… and true… (in relation to digital signage, I mean).
Meanwhile, deciding what exactly to measure would greatly help to determine how to measure it.
The emergence of new media caused a chaos of criteria in the whole marketing chain: from media outlets themselves to media buyers, agencies and their clients: the advertisers.
Accountability (or lack it) is listed in the Advertising Age’s “Trends to Watch in 2008“:
“GET SERIOUS ABOUT ACCOUNTABILITY
In ANA’s 2007 marketing accountability study, it was startling to find that, despite enormous efforts, 42% of marketers were dissatisfied with ROI measurements and metrics. In about half of the companies, marketing and finance don’t speak with one voice or share common metrics. Enough! Recognizing the critical importance of accountability, companies will appoint a czar — the chief accountability officer — to lead a disciplined, internally consistent approach to marketing measurements, metrics and productivity.”
Let’s hope at least part of the ROI challenges will be resolved in 2008, so we all could finally start making a lot of money working in digital signage…
Happy New Year!
December 26th, 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
“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
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