Posts filed under 'Digital Signage ROI'
Media owners say the share of revenue from advertising is increasing relative to revenue from ‘end-user spending’. MARKETINGWEB says half the media executives polled in Accenture’s Global Content Study 2007 said advertising, driven by growth in digital advertising, could become the most prevalent business model within five years.
Traditionally, media revenues have been split between end-user spending (65%) and revenue from advertising (35%). End-user spending is defined either as subscriptions to media or buying media off the shelf, reports MARKETINGWEB.
“Regarding analytics, one of the major benefits of digital advertising is its measurability, which allows advertisers to track impact and Return On Investment (ROI) for their spending. As such, expect to see a shift in the way digital advertising is priced. While 39% of our respondents said that Cost Per Thousand (CPM) pricing would remain dominant, a combined 33% believe that Cost Per Transaction (CPT) and Cost Per Action (CPA) pricing would be more Important,†the researchers said.
The same trend was confirmed by Sir Martin Sorrell, CEO of the second-largest media communications group, WPP. Sydney Morning Herald quoted his speech  at the International Advertising Association lunch: ”Measurability was an area of increasing importance to clients, who were increasingly unwilling to pay for the rising cost of television”. He said that in five years he hoped to have half, instead of the present one-third, of his revenue from media that could be measured easily, such as internet advertising, and the tools that measured its effectiveness, writes Sydney Morning Herald.
According to MARKETINGWEB, Accenture’s Global Content Study 2007 surveyed more than 100 decision-makers in the media and entertainment sectors, including television, film, music, radio, video games, publishing interactive entertainment and advertising. It polled executives across North America, Europe and Asia-Pacific, to gauge their views of where the greatest opportunities and challenges will come over the next five years.
The previous year’s survey gave a different picture, with only 38% of respondents seeing advertising as a leading revenue stream. The researchers attributed the increase in optimism to the “strong traction that digital advertising has experienced, particularly in onlineâ€. The trend has been driven by the success of search-based advertising on the internet, which is complemented by video-based brand advertising.“The promise of this digital revenue format has been buoyed by major deals in the online space, including acquisitions such as Google and DoubleClick, Microsoft and aQuantive, Yahoo! and Right Media, Publicis and Digitas and WPP with 24/7 Real Media,†Accenture said.
I would add that for digital signage, which is an integral part of digital advertising, given its expansion in retail, such metrics as Cost Per Transaction (CPT) and Cost Per Action (CPA) will be be growing in importance compared to Cost Per Thousand Impressions (CPM).
Spend on advertising worldwide is estimated to be around US$500-billion, and is dominated by TV, newspapers and magazines.
Some traditional advertising executives fear that their skills might become redundant, as technology players dominate digital advertising, MARKETINGWEB says. Sir Martin Sorrell, chief executive of WPP and a respondent to the survey, labelled certain internet advertising providers as “frenemies†to traditional agencies. Thus they are seen as both “friend†and “enemy†to traditional media players.
According to Sydney Morning Herald, Mr. Sorrell described Google’s unique position as both a seller of services to WPP – the company buys $US450 million ($500 million) of “stuff” from Google each year – and a potential competitor for its media business by experimenting in selling newspaper inventory and setting up a creative services division to rival his advertising agencies such as JWT and Ogilvy & Mather.
“The biggest issue facing people in this room is the technology issue,” he said, describing Google as a “frenemy”. He pointed out that in just a few years Google’s market capitalisation had grown to four times that of the four main communications companies: WPP, Omnicom, Publicis and IPG.
He said Google’s proposed $US3.1 billion acquisition of the digital ad agency Double Click had prompted a rash of me-too purchases, including Microsoft’s $US6 billion takeover of the digital advertising and infrastructure group aQuantive and his own purchase for $US600 million of the search marketer 24/7 Real Media, Sydney Morning Herald wrote.
Describing another key trend, Martin Sorrell also pointed out that “the East” (Asia)Â posed even a bigger threat – or opportunity -Â to traditional agency business. “The thing that worries me is not what those PhDs are doing in Berkeley, Stanford or Harvard but at Beijing or Bangalore. I think we are about to see other things happen that we don’t even understand yet, emanating particularly from the eastern part of the world,” he said.
Wall Street Journal earlier this week quoted Mr. Sorrell as saying that, as part of his long-term strategy, WPP aims to increase its business in the fast-growing emerging markets to reduce reliance on the less-dynamic U.S. and Western Europe. He said WPP gets about a quarter of its $12 billion in annual revenue outside those markets and aims to raise that share to a third over the next five to 10 years.
Related topics: see the Digital Signage ROI category.
October 24th, 2007
Digital signage as a medium appeals to advertisers because of its potential to deliver both pin-point targeting and unprecedented levels of accountability. What may be this industry’s dirty little secret, however, is the fact that a large number of networks that are currently enjoying success do not have the proper reporting in place to provide this accountability to the marketers they service.
As my colleague Nurlan has been saying for years, digital signage has a strong advantage over broadcast media because of the fact that it can account for every ad played on every screen. Imagine if you could track with certainty every single time a commercial is displayed on every TV screen in the DMA when this TV set is on and tuned to the proper channel. Such tracking would be worth a lot of ad money, but it is not feasible for broadcast TV (except by way of expensive metering of sample audiences).
Well, the good news is that, in digital signage, near-real time tracking of each ad play on each screen (not just a player) can be a standard and automated procedure.
In order to take advantage of this, networks need to put in place the four components of a properly accountable digital signage reporting system:
1. Provide Proof of Display, not just proof of play. Proof of play is the term used in digital signage to describe the summary playback reports and the raw play logs. Proof of play is the equivalent of tearsheets in newspapers and of online impressions and click-through reports in pay-per-click marketing. While it seems obvious that proof of play should report on which ads were actually displayed on each screen and when, most of these reports only register which content was played by the playback device at best, not on the screens connected to it. If one or more of the screens are off or disconnected from the player, the proof of play would not detect that in many cases. This leads to the wrong count of ad plays, distorted count of impressions and the wrong conclusions in the post-campaign analysis. So by saying ‘provide Proof of Display versus proof of play’ we want to stress the importance of reporting of what really matters: playback at the screen level.
2. Audited Play Logs: most digital signage playback devices produce raw play logs that track what ad played, the date and time when it played and the duration of time it has played. In order to validate the accuracy of the entire reporting system, these play logs will need to be audited by a third party. Again, these audits register what’s being played on the actual screen, and then the results are compared to the play logs.
3. The Campaign Plan Report: the purpose of the campaign plan is to be able to provide a promise to the media buyer before they sign the ad contract. Using the characteristics of the network, one can generate a forward-looking plan that estimates how many times the ad will play in each targeted location. Having a Campaign Plan report with planned ad plays numbers will make it easier for you to justify your initial billing estimates.
4. The Campaign Performance Report: the campaign performance report aggregates the raw play logs for that campaign and presents the total results of the campaign against the “promise” made in the campaign plan report. The comparison between the planned plays and the achieved plays is how performance is calculated. The first 3 components are what make this report the basis for invoicing the media buy, make-goods or invoice reconciliation.
Based on my experience, the vast majority of digital signage networks out there do not have even two out of the four of the above components of a fully accountable digital signage reporting system.
Some networks charge a flat fee for a week-long, a month-long, three month-long, etc., campaign, based on approximate “impressions”, without providing any proof of play (or providing just an affidavit). Since the ways the impressions are calculated vary from network to network, such campaign cost estimates (and CPM values) are highly questionable.
Some provide a proof of play report, or play logs. As I mentioned earlier, most of the play logs, however, only report the fact that the player was on when the ad was supposed to play, not what played on the screens.
How is the industry getting away with it? I think the answer lies in the inherent appeal of digital signage as a medium. We see that even without any standards and metrics, retail digital signage and digital outdoor billboard networks are attracting more ad dollars every year. I believe that, similar to the world of Internet advertising before it, digital signage will soon undergo a rapid shift where the wheat will be separated from the proverbial chaff.
The question for network operators then becomes: will your network be ready in time for this shift?
October 19th, 2007
“MORE THAN $36 BILLION IN annual advertising on broadcast and cable TV networks rides on estimated audience measurements from third parties,” writes Diane Mermigas, editor-at-large at MediaPost, in MediaDailyNews. Her point is that all this money is being paid to TV channels based on the assumption that vewers have seen commercials and programs. And that assumption, in turn, is still being made based on the old-style TV ratings, whose accuracy leaves much to be desired.
At the time when media and marketing are being converted to digital technologies, advertisers are “wrestling with how much marketing dollars to split between TV — where they think they still reach the so-called masses — and more precisely measured online and other digital media — where there is some individual accountability,” says Diane Mermigas.
She quotes NBC Universal’s CEO Jeff Zucker, who was asked about the viability of the current TV ratings system: “Zucker replied: “They are what we live by and what we all have to judge ourselves by; whether they are accurate or not, whether there are issues or not. We all have to play by the same rules, and we cannot get caught up in saying that’s not the rules we should play by.”"
According to Diane Mermigas, that kind of attitude on the part of TV media owners and traditional media measurement companies “will keep the ratings sham as a lynchpin of television economics, even as more meaningful metrics and measurement options develop across all media spaces.”
Many advertisers, however, do not share Mr. Zucker’s position towards old-style ratings as the basis for ROI measurements. The explosion of Internet advertising (especially of the pay-per-click model), driven by unequivocal accountability, the fast growth of Outdoor (driven by digital conversion and newer metrics), and the slowdown of TV advertising growth are proofs to that effect.
Mermigas says: “The present challenge is measuring and reconciling the statistical reach of consumers for all TV programs wherever and whenever they are viewed, be it TV, mobile or DVR. The aggregate measurement for programs has to be credible.
But in a new era of personalized, consumer-centric media, why would any company be allowed to think that sampled metering is an acceptable substitute, even as television and other incumbent industries convert to digital measurement and distribution?
It may have something to do with the inextricable broadcast networks and television stations’ legacy systems of reporting, using and pricing against those inexact metrics,” writes Mermigas.
So, that explains why, as media buyers are using lack of measurements as a valid excuse for not buying digital signage space, the only way to convince them at this point is to give them the TV-style CPMs, CPPs and GRPs they are used to. Digital signage networks who can offer that, can succeed in getting national advertisers, sometimes. But, as we all know, the above metrics have very little to do with the real advertising ROI, and that is one of the reasons why ad budgets are still largely off limits to digital signage networks.
Here’s another couple of quotes from this brilliant piece:
“… The bad news is going to get worse as viewers consume more of the broadcast network content in time-shifted, Internet-streaming, direct downloaded ways outside the traditionally measured Nielsen universe, where a single rating now represents 1.3 million TV homes.“
“… If the networks are serious about generating at least one dollar of new media revenue to replace every dollar of conventional advertising lost, they had best throw their money and energy behind measurement systems that certify reach on all platforms. And they can’t do that with their head in the sand,†concludes Diane Mermigas.
While there are still no viable enough metrics for online display advertising, paid-search marketing is booming, thanks to the fact that advertisers only pay for click-throughs, and impression counts are delivered free of charge (so no CPMs, only cost-per-click!). If you are using e-commerce, you can get quite accurate sales conversion (or goal conversion) numbers, which is the closest you can get to ideal ROI measurements in advertising today.
I am just wondering, what will it take (and how long) for the digital signage industry to develop the metrics that reflect the real campaign effectiveness. In fact, this is the multi-billion question.
October 12th, 2007
The world’s biggest media research firm, Nielsen Co., announced pilot results of the In-Store Prism initiative – or ‘essentially a ratings system for in-store media and marketing that measures reach and frequency similar to TV,’ reports Advertising Age late on Sunday night. The Pioneering Research for an In-Store Metric (PRISM) is a consortium that comprises, among others, the biggest retailer (Wal-Mart), the biggest advertiser (P&G) and the biggest media-buying agency in the world (Starcom MediaVest Group).
“Shopper marketing is a new medium as important as the internet, mobile or gaming,” declared Starcom MediaVest Group North America CEO Renetta McCann at the announcement of pilot results, “It’s a brand-new ballgame, and we’re all in.”
The Rise of Shopper Marketing
Source: Deloitte/GMA draft study
According to Peter Hoyt, executive director of the In-Store Marketing Institute, until recently ‘media agencies weren’t in the game at all,’ but now they are following the media companies: ‘the parents of the four leading broadcast networks have a stake in some facet of in-store media’ says Ad Age. Five media agencies have already joined the consortium behind the Prism effort, said George Wishart, global managing director of Nielsen In-Store.
Nielsen CEO David Calhoun compare Nielsen In-Store’s emerging metric to his company’s TV and Internet rating. “It will allow in-store to rightfully take a seat at the marketing table and be considered in an analytical manner consistent with all good marketing and media planning,” he is quoted in the Ad Age article. “What you can measure, you can manage.”
That’s certainly a major achievement for Nielsen. They were the first to recognize the need to have a stake in the powerful medium of the future (in-store marketing) and led the process of initiating measurements.
Yet, I have some naive questions, and may be someone could enlighten me:
1. TV ratings are better than nothing but they are very far from being a reliable metric (experts and TV advertisers themselves say). Over 100 years after it was said, many advertisers are still repeating that only 50% of their advertising works but they have no idea which half it is. Ratings refer mostly to programs, not the commercials (which are increasingly zapped or ignored). Besides, TV sets are usually far from the products advertised on them. By contrast, when it comes to in-store, all ads are near the products, so why not just track sales uplift or ad-triggered actions, the way Internet does it? If I am not mistaken, the main metrics for online advertising are number of click-throughs, click-through rates, cost-per-click, cost-per-sale (for e-commerce), and not the ratings. Online impressions are measured free of charge. I can see how Internet ratings can be useful for wooing first-time advertisers, but ratings are not enough to retain them. The web has gone much further than that in proving its effectiveness, and that is the reason why it’s growing so fast. So my naive question is: are ratings the best the sophisticated measurement industry can do for in-store marketing?
2. Audience studies give you an indispensable insight, but they are also quite expensive. I wonder how much a Prism study would cost and how many advertisers or retailers (or digital signage networks) would be able to afford it?
Brandweek’s Mike Beirne gives an example of a sceptical view: “While proponents contend that an in-store metric could give POP players a seat at the marketing table, not all are convinced. “I see a lot of upside . . . but I still think decisions are going to be price-driven compared with other forms of marketing,” said Alan Foshay, director of business development at Rapid Displays, Brunswick, Maine. “No one questions spending $3 million for a 30-second spot but tell a client they should spend $3 million on in-store, that seems like a lot of money.”"
I would add: the decisions are going to be price-driven at first, and ROI-driven after the first campaigns show (or do not show) results at the cash register.
October 1st, 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
Following ‘a two-year research methods and technology trial’, InStore Broadcasting Network (IBN) has signed a contract with Arbitron to measure the audience of IBN’s in-store audio network in 200 Walgreens drug stores in the Houston-Galveston DMA.
According to this report by MediaBuyerPlanner, Arbitron will be using the existing panel of consumers who are carrying the company’s PPM device as part of Arbitron’s syndicated radio ratings service.
MediaWeek says Arbitron is planning to roll out its PPM ratings service to the top 50 markets over the next three years.
Arbitron’s rival Nielsen Media Research started measuring in-store media audience a few years ago using a more traditional “intercept” interview methodology. AdSpace, a US digital signage operator commissioned Nielsen Media Research in July, 2007 to measure the audience of its network in shopping malls, says MediaDailyNews.
The same article points out that ‘Competition to measure the emerging fields of in-store media and place-based video is heating up. In late February, TNS acquired Sorensen Associates to bolster its in-store media-measurement capabilities. TNS is positioning itself as a major competitor to Nielsen In-Store–a newly formed division of NielsenConnect, recently launched to give clients a holistic, global view of different types of media effectiveness.
At the same time, major media agencies are setting up their own in-store services. For example, Mediaedge:cia acquired Retail Media Link and relaunched it as MEC Retail in March 2006.’, says MediaDailyNews.
September 12th, 2007
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