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. (more…)
February 19th, 2008
Nurlan Urazbaev
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. (more…)
February 8th, 2008
Nurlan Urazbaev
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.
(more…)
January 29th, 2008
Daniel Parisien
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. (more…)
January 27th, 2008
Nurlan Urazbaev
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
Nurlan Urazbaev
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. (more…)
January 15th, 2008
Nurlan Urazbaev
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. (more…)
January 8th, 2008
Brian Dusho
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. (more…)
December 28th, 2007
Nurlan Urazbaev
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: (more…)
December 26th, 2007
Nurlan Urazbaev
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.” (more…)
November 20th, 2007
Nurlan Urazbaev
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Brian has spent the last four years working with retailers, advertising/ media companies, and technology companies to develop successful business models in the digital signage industry and assisted in the formation of several of the industry trade organizations. He is an active member in 
Nurlan is director of marketing for BroadSign International. He has been with BroadSign since day one and brought along a lot of media expertise from his diverse career that ranged from a reporter to a radio executive, entrepreneur and owner of a media consulting company. He is a staunch proponent of standardization and ROI measurements for digital signage advertising.
