Posts filed under 'Digital Signage Evolution'
Social networking sites are getting a lot of attention nowadays, due to their explosive growth. I agree, it’s a huge phenomenon; all of a sudden – everyone is on either Facebook or MySpace, or both, my family included. USA Today published an article today, saying that social networks will assume the role of TV networks, and marketers will benefit from placing ads on these sites.
Sounds fantastic, but I think something important is missing here. Let’s see. Have social networking web sites accumulated massive numbers of users? – Yes, they did. Do those users constitute the demographics most desired by advertisers: young, affluent, educated people? – No doubt about it. Now, will the social networking sites become an effective advertising vehicle? – This is where I am not so sure.
Online advertising has absorbed the largest part of ad dollars shifted from traditional media. However, the lion’s share of that money goes into Search Marketing – the most proven model for online so far (and the lion’s share of Search Marketing budgets go to Google AdWords):
Where do Facebook, MySpace and the like fit in here? They will probably compete with many others in the display ads category.
The problem I see with social networking audience is essentially the same as with TV viewers: they come to those web sites to socialize, whereas viewing or clicking on ads, no matter how relevant the messages are, is the last thing on their minds. Much like viewers turn TVs on to watch programs, not ads. So you are still stuck with the same predicament: no one really wants your ads, except for the media owners – the social network sites themselves.
By contrast, people who see sponsored links in their Google search results, view them as relevant timely information to help them find what they are looking for… Searchers actually appreciate those ads, and often click through them. This explains the high effectiveness of Search Marketing and its unstoppable boom.
As a TechCrunch blogpost put it, commenting on the above table: “The numbers look great for Google, with paid search advertising expected to hover at around 40% of the total online ad spend through to 2012, increasing as a whole from $8.6 billion in 2007 to $16.59 billion in 2012, a 92.9% increase over 5 years.”
Online advertising was propelled to its current height and market share after Google finally figured out a business model that harmonized the interests of users and advertisers. It worked like magic. Social networks, however, are yet to figure such a model out. Similar problems hamper the growth of online display ads. In many cases display advertising is bought just because it falls under a section in the media plan with a trendy title ‘digital’, which in the advertising lingo is synonymous with ‘internet’, while the metrics are still quite vague.
As we know, the only other advertising medium, apart from Paid Search, that has been defying recession is Digital Out-of-Home. Unlike the case of TV or social networking web sites, the business model here is pretty straightforward and fits the interests of both consumers and marketers:
- modern consumers are pressed for time and are receptive to brief info that may help them make a purchase decision, while on-the-go. They are NOT annoyed, because they are not interrupted. Therefore, the acceptance of DOOH advertising is much higher.
- operators can make sure that the screens are on and show the right content, therefore – the proof-of-play is predictable and measurable.
- the audience is more easily measurable. New technologies will soon allow high-precision, passive (automated) digital audience measurements.
- the ROI is more direct: one can trace an ad from proof-of-display to proof-of-audience – to sales increase, as the advertised products are usually not far from the screens.
My point is, I love the phenomena of Facebook and MySpace and they probably have a great future, but at this moment I wouldn’t give them a penny from my ad budget. There are much more viable advertising alternatives to TV networks than social networks as they are today.
May 12th, 2008
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.â€
“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.â€
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
The Out-of-home media, along with internet, is doing well, despite the drop in overal ad spending. Media Life Magazine’s Diego Vasquez quotes ZenithOptimedia Worldwide, “whose most recent forecast for U.S. spending has out-of-home spending growing by 11.2 percent this year, to $7.83 billion.”
According to Vasquez, next year ZenithOptimedia expects the OOH industry to grow at a similar pace: “11.3 percent, to $8.71 billion, and in 2010 it will grow another 11.5 percent, to $9.72 billion.That’s against 3.7 percent growth this year for the entire U.S. ad economy, which is down from the 4.1 percent growth ZenithOptimedia forecast back in December. It’s forecasting even slower growth in 2009 and 2010, by 2.1 percent and 2.2 percent.ZenithOptimedia is forecasting that worldwide out-of-home spending will grow 9.4 percent this year, 8.0 percent in 2009, and 8.3 percent in 2010.ZenithOptimedia senior publications executive Anne Austin defines out-of-home as including all outdoor advertising, from billboards to bus shelters and other forms of alternative media.Just last month, the Outdoor Advertising Association of America reported that 2007 OOH spending had risen 7 percent over 2006, to $7.28 billion,” writes Diego Vasquez.The rosy view of the medium, whose growth to a large extent is driven by digital technologies (billboards, digital signage networks), was supported by TNS Media Intelligence in New York. The research company reports that spending on TV, radio and newspaper advertising fell last year, but the outdoor ad category rose 4.9 percent. Pittsburgh Post-Gazette interviewed Jeff Golimovsky of the OAAA last week, who said that the first digital billboards went up several years ago, and OAAA estimates there are now around 800 and growing, although that’s still a small portion of the nation’s 400,000 total billboards.
David W. Miller, an analyst with SMH Capital in Los Angeles told Pittsburgh Post-Gazette that Lamar Advertising claimed to have more than 600 digital billboard displays in 37 states and Canada as of December 2007, according to regulatory filings. The Baton Rouge, La., company has been, as Mr. Miller described it, among the most “evangelistic” about going digital.
Even as recessionary pressures seem to be slowing growth in the outdoor ad business in 2008, Lamar expects demand for space on its digital locations to buoy overall results, Mr. Miller said.
In a recent MediaWeek’s interview with top ad experts about the OOH evolution, Mark Kaline, global media manager for Ford, said this about the industry potential:
“Out-of-home is a sleeping giant. It is being kicked by technology. It’s being rustled by measurements. It’s being awakened in a way that’s very close to what the Internet is experiencing right now. It provides us with an event in a local market that we’re able to build launches around. It’s got the best of both worlds. It’s a national medium that can be localized in a way that allows you to geo-target. You can now tailor your ads using digital boards in a way that’s never been done before. With dayparting, there is now the opportunity to reach a certain audience while they’re traveling in close proximity to whatever it is you’re selling—it’s great. You can tell a story over time with a lot of little simple messages that add up to a big story.”
April 21st, 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.â€
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:Â Digital Billboards Study by Arbitron.
March 9th, 2008
Most of the OAAA’s newsletter this week was dedicated to digital billboards. OAAA president and CEO Nancy Fletcher writes that “Digital outdoor can provide opportunities for industry growth little imagined only a decade ago.”
The Federal Highway Administration ruling last fall that digital billboards were ‘permissible’ unleashed a flurry of new installations, pilots, studies and local regulations. Nancy Fletcher summed up the recent developments in the field as follows:
“People Like Digital
Consumers and advertisers are strong advocates of digital outdoor. Arbitron just released a report saying digital billboards are noticed by most drivers and appreciated as attractive and useful, particularly with younger (and harder to reach) audiences. See page three for Arbitron highlights or download a copy at www.digitalooh.org later this week.
Traffic Safety
Separate research conducted by Tantala Associates and Virginia Tech Transportation Institute (VTTI) last year in Cleveland, OH, showed digital billboards are compatible with traffic safety. Digital billboards are safety neutral to motorists, while accident data does not link digital billboards to accidents. Analysis of accident data by state officials reached the same conclusion.
Expect more research. The Transportation Research Board (TRB) has held a workshop to discuss future needs of traffic safety. The Federal Highway Administration (FHWA) has awarded a contract to SAIC to develop a research plan concerning digital safety; the first phase is due for completion in June 2008. In addition, state highway officials (AASHTO) have initiated a worldwide literature search of traffic safety studies affecting signs that will be released this summer.
The National Alliance of Highway Beautification Agencies (NAHBA) is considering
additional research following the results of these earlier studies.
Digital Brightness is Controlled
A primary issue affecting digital billboard deployment concerns brightness and lighting levels. OAAA commissioned Dr. Ian Lewin, a principal at Lighting Sciences in Scottsdale, AZ, to recommend standards designed to minimize the risk of glare or unreasonable driver distraction. The resulting criteria followed the lighting standards established by the Illuminating Engineering Society of North America (IESNA). Details of these requirements will be released this week.
Digital is Regulated
Steadily, state statutes and regulations are being established to govern the use of changeable message signage. To date, 38 states allow digital technology and
five others allow tri-action devices. Only three states (ND, NH, and WY) are left to enable some kind of changeable message signs. While the state regulatory picture is encouraging, the real action today exists at the local level, where a number of communities are considering ordinances, regulations, and applications for digital outdoor displays. As with every regulatory issue, a well-prepared and properly informed industry can best educate policy makers about the benefits of digital outdoor.
Digital is Important The ability to change messages in real time is a benefit to advertisers and a vital public service. Millions of motorists have seen presidential primary results via digital billboards. The FBI is using digital billboards to find fugitives, while AMBER Alerts help locate abducted children.”
Overall, the Outdoor advertising seems to be in much better shape than TV, radio and print. According to the OAAA’s newsletter - total revenue for the outdoor advertising industry in 2007 grew 7% compared to the previous year. Total revenue for the industry grew 6% in the 4th quarter compared to the same period in 2006. The revenue figures are collected in aggregate each month by certified public accountants Miller, Kaplan, Arase & Co., LLP, and used by the Outdoor Advertising Association of America, in combination with other sources, to release industry revenue information on a quarterly basis. Revenue estimates include billboard, street furniture, transit, and alternative outdoor media spending.
I would still like to see the numbers for digital billboards separately and I would assume that those would reflect a much higher growth than that of the whole Outdoor segment. If anyone has access to the digital billboard stats and would like to share them, feel free to post them in a comment here…
March 3rd, 2008
Digital signage network operators that depend on ad revenue are leaning towards becoming media companies, rather than being technology providers. Today’s battle for a piece of the advertising pie forces networks to allocate much more effort to finding a viable business model, building their ad space, training an ad sales force and breaking into advertisers’ media plans. Therefore, having to deal at the same time with in-house software or issues related to running an ‘on-premise’ software application is becoming too much of a burden.
In this respect the maturing digital signage industry is following the path of traditional broadcasting, where most of the technical and IT responsibilities are outsourced, leaving networks ‘leaner and meaner’ in their competition for ratings and ad revenue.
Software as a Service (SaaS) model that has become popular lately in industries like accounting, CRM and sales performance management, is appealing to many operators of ad revenue-driven networks, especially in retail as it can satisfy their demans for rich functionality without being cost-prohibitive.
I spoke to many networks who came to our booth at the Screen Expo Europe 2008 in London, and a vast majority of ad revenue-based companies appears to be looking for an outsourced, hosted solution. At the same time, there is a large number of closed networks (such as those in banks or corporate environment), for whom an ‘on-premise’ solution is a better choice.
BroadSign has published a white paper on the subject: ”Grow Your Digital Signage Business, Not Overhead: How a SaaS Solution Can Help. You can download it here.
February 8th, 2008
We receive many questions as to whether Internet connectivity interruptions affect advertiser compliance. The short answer is: in most cases they do not, but other problems that may be disguised as connectivity issues, do.
The reality of running a digital signage network via the internet is that connectivity issues will arise. They might be unexpected network hiccups, planned downtime by the ISP, or stalled routers. Advertiser compliance does not have to be affected if a system is disconnected from the internet. For instance, BroadSign Players are only connected to the Internet when they poll the server for new schedules or content. So, if there is no connection, the player will keep playing the latest updated content according to the latest schedule updates. The worst-case scenario, therefore, is that the player will miss an update while the connection is being restored. However, considering that new schedule and content uploads are usually done well in advance, the likelihood of compliance being affected is very low.
To illustrate this point, most of advertisers want their campaigns scheduled for a prolonged period. If you schedule it for a 2-3 month period, the campaign will keep playing regardless of a connection. If the connection is interrupted, the only thing affected would be the near real-time network performance reporting. But when the connection is restored, all reports are updated with the next poll.
Sometimes, however, what seems like a networking issue may be due to hardware failure. When hardware fails, advertisements can no longer be seen on the display which qualifies as a non-compliance. Excessive non-compliance requires that advertisers receive make goods or have invoices adjusted in order to compensate for missing ad plays. One of the big challenges of remote monitoring is that it is impossible to detect the difference between a network issue that will correct itself and a hardware issue that will not.
This is why the industry has standardized remote monitoring systems with built-in programmable thresholds. For example, if BroadSign players are connected using a third party’s internet connection, lenient thresholds may be selected; for example, “warn me if a player’s connection has been down for more than one hour”, and “escalate the issue to critical when the system is down for over 24 hours”. When business DSL is used, immediate notification of connection issues may be more appropriate; in this case, “escalate the issue to critical after as little as two hours of down time”. While a thresholds system is not perfect, when combined with a system that provides historical data on a site’s behavior, it is possible to monitor a very large network without a large workforce.
For example, if a site shuts down its systems, or prevents playback intentionally or even unintentionally, the site’s history will indicate whether or not a technician should be dispatched. A proper remote monitoring system will display the history of unexpected shutdowns at a particular location. Even if on-site staff shut systems down after hours, which does not affect compliance, performing a hard shutdown introduces undue wear and tear on player hardware. Over a period of time, this increases the chance of hardware failure. If the system’s network status has been escalated to critical, the history of unexpected shutdowns may indicate that the hardware has failed. If, however, it is accompanied by the history of regular MIA reports, overriding the thresholds for that site is recommended in order to ignore regular and repeating behavior.
On the other hand, the industry-accepted method of determining advertiser compliance is to have the network audited by a trusted third party. We are working on proof-of-play audit projects with media measurement giants Nielsen and Arbitron. They measure compliance by correlating their play logs with BroadSign proof of display logs. BroadSign Suite measures its own compliance levels on a per-campaign basis which can be viewed via the campaign performance report. Since campaign performance results are compiled from proof of display logs, an audited network can provide a higher level of comfort to advertisers and makes it easier for them to justify their rate cards and billings.
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January 29th, 2008
NBC Universal’s move to host an “upfront” presentation later this month to sell its out-of-home TV ad space to major media buyers is the largest attempt so far to elevate the fast-evolving digital signage media properties to the level of annual TV buys. The presentation that comes ahead of the traditional TV Upfront event in the spring is probably also aimed at offsetting the potential losses in TV advetising revenue that may be caused by the continuing writers’ strike. Most analysts predict that many marketers may not be willing to commit to TV shows whose future is unclear.
While the writers’ strike may be a catalyst for NBC’s decision to sell its new media assets more aggressively, the NBC’s initiative also looks like part of a bigger strategy. Last summer NBC became a content provider and media sales rep for a number of digital signage networks , including PRN (over 1000 screens in Shop Rite and Albertson’s retail chains, with Wal-Mart’s In-Store TV not participating), over 500 screens in taxi cabs and about the same amount of gas-pump station screens. And now looks like a perfect time to start pitching this newly aggregated and promising space.
The announcement of the first out-of-home “upfront” heralds the beginning of what many forecast to be a good year for digital signage. The expansion of networks, the growing awareness of this new medium’s potential and the decline of traditional media’s advertising ROI along with the limitations of online advertising, are all indicating that the rise of digital signage is inevitable.
“There’s something intriguing about reaching a consumer at the moment they are interested in buying products, and have money in hand to do so,” said Steve Kalb, senior VP-director of broadcast at Interpublic Group of Cos.’ Mullen.
This kind of awareness on the part of national advertisers and their agencies is also the result of the hard work put in by the OVAB – the Out-of-Home Advertising Bureau, whose mission is to educate the advertising community about the unique benefits of digital signage and to establish standardized metrics that would facilitate massive media buys.
January 8th, 2008
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
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