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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
The end of analog broadcasting is exactly a year away in the US and everyone
from The Commerce Department’s, National Telecommunications and Information
Administration (NTIA) to Best Buy are looking at ways to help the 14 million
US households that still depend on an analog signal. Vouchers will be mailed
out to households so they can purchase discounted government-approved
converters. According to USA Today this will be “the boldest technology
conversion ever attempted†but something is troubling in this picture. When
the transition to digital was planned no one in their wildest dreams could
have predicted that by the time of the switch TV would be in such a poor
shape, with its audience fragmented, shows undermined by the recent writers’ strike and the annual upfront ad sales event in question.
Ironically, it appears at this point that the conversion to digital, instead
of launching the TV industry into a new level of efficiency and prosperity,
might become another factor contributing to its current crisis. The TV is on
target to lose a large chunk of existing viewership. “About 42% of those
who’ll have no TV signal after the transition have no plans to do anything
about it,†says Consumer Union Senior Counsel Chris Murray, citing a
December survey by Consumer Reports (a quote from USA Today). That survey
also found that 36% of all consumers don’t know about digital TV conversion.
Most of the people who are aware misunderstand what it’s about or how it
will affect them, reports USA Today.
Even if the government campaign manages to raise awareness and improve the
numbers mentioned above, it is fair to assume that both the audience numbers
and the ad revenues will still be affected 12 months from now. We know TV
will not die; it will transform itself in order to survive. But while it
does, the advertisers’ trust in it will be further undermined.
When the magnitude of potential negative consequences of the conversion
sinks in, advertisers will have another good reason to have a closer look at
the alternatives, including Digital Out-of-Home (aka digital signage). By
the fall of 2009, I dare to predict from my backstage vantage point, this
medium will be considerably more mature, wide-spread, accepted and comparable in value
to any other media.
February 20th, 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
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.
<a href=”http://technorati.com/claim/pvfgxzewtg” rel=”me”>Technorati Profile</a>
January 29th, 2008
In the article “So Much for Engagement, Buys Are Still Based on Eyes,” Ad Age writes that ‘ for all the talk about engagement, top marketers and their media buyers still consider reach the No.1 criteria when they are framing their media plans and making their purchases.” This finding comes from Advertiser Perceptions’ “Wave Eight” survey of 2,047 top marketers and media buyers. Less than half of those surveyed ranked engagement among their top five criteria when buying media.
The author seems surprised, but I wonder how engagement can possibly be ranked any higher if no one really knows what engagement is and how to measure it? The same article quotes Steve Lanzano, COO at Havas media agency as saying: “… a lack of consensus about how to define engagement as well as the need for varying engagement metrics for different brands still makes it difficult to make deals on…” I think engagement is one of those buzz words that sound good, but are hard to apply to everyday reality.
Eyeballs are still the predominant goal for media planners at the moment, but only because reach is the most accepted legacy yardstick that originated at the height of TV reign, around which media research giants like Nielsen built their ratings industries. The demand for something more results-oriented is on the rise, the survey confirms: ” … the big media spenders plan to pour more dollars into digital in the next six months, which could be construed as a vote for a medium that allows targeting and a high level of measurability … … in online buys, it is the ad results (defined as accountability, effectiveness, return on investment and impact on awareness) that count,” writes Ad Age’s Megan MCilroy.
The survey data suggests that buys of broadcast TV, ’still the primary reach vehicle in most marketers’ minds’, will be close to flat, while online, cable TV and mobile marketing will see an increase in spending. National and local newspapers and radio will be the ‘big losers’ in the advertising pie battle, based on the study.
According to the charts illustrating the article, spending on Outdoor will remain largely the same following a rise last year. I don’t know if the study factored in the new legislation permitting digital billboards in the US, which definitely gave the industry a jolt at the end of 2007.
January 27th, 2008
Steven Platt offered his forecast on “adoption and deployment of digital communication networks” (another term for digital signage networks) for 2008-09 on digitalsignageweekly.com .
The director of Platt Retail Institute states that going into 2008, there is an increased level of activity in deployment of networks, raising capital and mergers/acquisitions in North America, Europe, parts of Middle Eats and China.
At the same time, Platt points out that retail, being the largest sector prospect, is also the slowest one to adopt new technology projects. Since many retailers consider digital signage a non-core activity, investment in those projects will remain slow until late 2008, hampered by the imminent ‘mild recession’.
On a positive note, the analyst is seeing that “…longer-term, retail network successes are starting to outnumber the failures. In time, such an investment will be viewed as core to a retailer’s business.”
January 17th, 2008
Ad Age interviewed leading industry executives about what they think a recession means for their business in 2008.
The consensus is: “It might not hurt in the short-term, but if things don’t tick up, gird yourself for a tough 2009.”
Martin Sorell, WPP Group’s CEO summed it up as follows: “Looking at 2008, there’s the presidential election, there’s the Beijing Olympics, which will probably be the most spectacular Olympics we’ve seen … and there’s the European football championships. So ‘08 is not the issue; ‘09 is.”
I would point out here that fears of recession are mainly expressed in relation to traditional media, where the audiences have been steadily shrinking even prior to any talk of recession.
Most of the new media, however, spearheaded by online advertising and digital out-of-home media (digital signage) shows no sign of a slowdown so far (see our previous posts in Big Picture category).
The looming recession forces marketers to look for more pragmatic allocation of funds. According to Alexia Quadrani, a Bear Stearns analyst: “If it’s a short recession, just a couple quarters, you’ll probably just see a shift (away from traditional brand advertising) to more promotional spending and more accountable means. … If it’s longer, it becomes a global crisis that does a lot more damage to these global networks.”
The most “accountable means” today is online advertising and the most “promotional spending” is shopper marketing. Reports show that the ad budgets keep shifting to online, but online doesn’t have enough inventory to absorb all the money taken out of TV. So my guess is that the unspent budgets are either waiting on the sidelines or being put into digital signage, or both. Apart from the overal increase in Outdoor spending (driven by digital billboards), we may not see it clearly because out-of-home digital (aka digital signage) is not singled out in most of the standard ad spend reports yet.
So far, even from the traditional media perspective, the ad industry looks more or less safe for 2008. Speaking about 2009, factors such as: the fast expansion of digital signage networks, the legitimization of digital billboards, the anticipated introduction of standards and metrics for ad-based digital signage and the continuing aggregation of ad space are likely to fuel steady growth even if the rest of the economy is in recession.Â
January 15th, 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
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