The Promise of Digital Signage Advertising

Developed & Published by:

Developed and published by Digital Signage Today

By Richard Slawsky
Contributing editor,
DigitalSignageToday.com

Sponsored by:

Sponsored by Omnivex Corporation
 

The combined power of data and context can
help organizations maximize the value of their
digital signage networks

 

As digital signage continues to increase in popularity, it carries with it an implied promise: to deliver timely, targeted advertising based on its applicability to the viewer. To a large degree, however, that promise has remained unfulfilled. The difficulty associated with manually managing playlists for dozens or hundreds of screens has resulted in many network operators simply running generic slideshows that may not be any more effective than traditional print advertising.

This special report, sponsored by Toronto based digital signage software supplier Omnivex Corporation, will look at some of the ways that the right software can help deployers make their digital signage networks
live up to their potential and fulfill that promise.

The business case

Global digital out-of-home media revenues generated by digital place-based networks, billboards and signage operators, grew 15.3 percent to nearly $7 billion in 2011, according to research firm PQ Media. Those
revenues are projected to expand by 19.2 percent in 2012.

For the United States, digital out-of-home operator revenue increased 11.2 percent in 2011, driven primarily by double-digit growth among digital billboard operators.

Overall, the global DOOH industry increased at a compound annual growth rate of 13.7 percent between 2006 and 2011.

Clearly, advertisers are recognizing the business promise of digital signage.

“If you look at the traditional ways of publishing and printing ads versus digital signage, there are some cost efficiencies,” said Omnivex CEO Doug Bannister. “With digital signage, you can be assured that your content is being distributed in a timely fashion without the expense of printing, mailing or disposal.”

In print advertising, a team of graphic designers generally develop a series of ads, with each created differently based on factors such as store location or the language in which the copy is to be printed. The
ads are then shipped to their destination, where local store personnel are responsible for placing the material.

If an ad contains a misprint or the terms of the campaign change, the process starts all over again. At the end of the campaign, the material is removed and discarded. Printing relies on economies of scale, so the cost to produce one poster is roughly the same as producing one thousand posters. Making errors, therefore, can be very costly and time consuming.
With digital signage, the physical component is removed and ads can be uploaded from the corporate headquarters or a similar central location. Those printing, mailing and placement costs are eliminated.

But one arena where savings often go unrealized is in the creation of the ad itself.

“What we have been doing for several years is rather than build an ad as a single entity, we build it as multiple pieces, and allow those pieces to be driven by data,” Bannister said.

“For example, if you have a menu board system and locations in multiple cities or countries, you may be developing a promotional ad for a featured hamburger. The picture of the hamburger can be used on multiple signs, in different configurations with text laid over top,” he said.
Menu boards can be updated from the corporate headquarters or a similar location.
The software driving the system can be programmed to realize that the sign is in a French, Spanish or English speaking area, and that text can be overlaid by the system at the time of display. Or it might recognize the sign is an outdoor sign in the drive-thru mounted in portrait rather than a landscape menu board at the counter inside the store. The software can change how the image and text is displayed to suit the sign automatically. If a new burger image is created, it only has to be input once and the system takes it from there.

Rather than have a team of designers creating multiple versions of the same ad, just a few designers can create a few ads with multiple configurations or text overlays.

“And if I need to make a correction, I can do that instantly and push it out to all of my signs at once and they will portray that information in the appropriate form for that location,” Bannister said. “You can also create multiple versions of the promotional piece and test it at different locations to determine the optimum presentation. This entire process can be done in a few days rather than months.”

Intelligent systems

One idea that’s been discussed in recent years, not just with digital signage but in the digital world at large, is the idea of “data as a currency.” Data is information that can be collected and moved between devices. By using data to establish context, companies can substantially increase the value of their networks.

“One of the earliest ideas was to set up the network so that when the temperature outside was hot, it would show an ad for an ice-cold soft drink,” Bannister said. “When it was cold, the network would play an ad for hot chocolate.”

“That is a very simple example triggered by a single variable (current temperature),” he said. “A truly intelligent system collects many unique data points at each location and delivers unique content specific to local conditions.”

The common buzz phrase related to digital signage has been “content is king.” Invest in great content, and sales uplift, or whatever else the deployer hopes to achieve, will follow.

Today, though, the buzz phrase should be “context is king.” With the proper software, digital signage networks can be set up to react to an almost limitless set of conditions based on business rules to display the combination of information best suited to local circumstances.

“Every advertiser wants their ad to look good and be effective, but what we believe is more important is that the content is relevant to the viewer based on their current situation. Only then will it have impact,” Bannister said.

Consider, for example, two ads promoting chewable antacid tablets to treat an upset stomach. One ad, designed to appeal to senior citizens, might highlight the added calcium to promote bone density and the low cost of the product which can be important to people on fixed incomes. A version of the ad targeting college students might demonstrate the product’s effectiveness as a hangover cure and direct them to the aisle for quick service. Price and bone density may not be an important factor for a student as they simply want an immediate solution to their problem.

With the proper software, digital signage networks can be set up to react to an almost limitless set of conditions based on business rules to display the combination of information best suited to local circumstances.

When the pharmacy screen can respond to the age of the viewer, an appropriate message can be generated or if multiple people of different demographic groups appear, the screen can list benefits for both.

“Both ads feature high-quality content, but if you show the wrong one to the wrong demographic you won’t get the results you are looking for,” Bannister said. “It’s the same product, but the ad won’t be effective without contextualizing the material through some intelligent display mechanism.”

In sports stadiums, beer sales are very profitable but local laws often restrict beer sales or promotion in the final period of a game. The length of a game varies, so the timing of the beer ad must vary based on the action on the field. At the same time, taxi companies get much better value for their advertising dollars by only advertising at the end of the game when the beer sales are removed. So integrating the game clock (a data element) into the signage system optimizes returns for both the facility and the advertiser.

“With these examples, you can start to see how being able to slice and dice the data to deliver targeted advertising leads back to the promise of digital signage,” Bannister said. “These are the types of things your digital signage system should be able to do.”

The next step

When someone sits down at their computer to begin planning their next vacation, an amazing thing happens. When they type the words “ski vacation” into one of the major online search engines, what appears at the top of the screen Digital signage networks in shopping malls can be outfitted to show ads from numerous advertisers.are ads for the nearest ski resort, or possibly a local store that specializes in skis and related equipment.

“What we are trying to do is deliver that concept into a digital signage world,” Bannister said. “We can tailor your message and deliver it to the right person at the right time, but the way we do that needs to be scalable and affordable. So the question is how do you make your network intelligent?”

The simple answer is through data. More and more, digital signage networks are reacting to input from the customers themselves.

An increasingly important component of digital signage is its interactive ability. Outfitted properly, networks can be designed to display any number of actions based on an interaction from a customer. Those interactions could be the swipe of a loyalty card, information gathered via video analytics, or a physical interaction between a customer and product.

Consider a mobile phone store featuring side-by-side displays of the latest in smartphones. Pick up one phone and the screen plays a video outlining the features of that particular phone. Touch the screen, and up pops detailed information about that particular model, or a comparison between that model and another.

“That’s interesting, but it’s still just a small portion of the value of digital signage,” Bannister said.

“The real value goes beyond sales uplift when deploying digital signage in a retail environment. Capturing that data can be much more valuable. I want to know how many people picked up that product and compared it with another product at that store, the time of day and what type of information they are looking for. That helps me plan my promotions, my inventory, and develop strategies to better manage my business,” he said.

ROI – the bottom line

When potential deployers consider the return on investment from a digital signage network, they typically look at it from the standpoint of system cost versus the potential sales uplift gained from displaying digital ads. Whatever they hope to achieve, however, needs to be clearly defined from the start.The real value goes beyond sales uplift when deploying digital signage in a retail environment.

“Something I stress to people looking to deploy a digital signage network is to clearly define your business goals, and not just sales but operations as well,” Bannister said. “What results are you looking for? How do you measure success? When you look at it in a year, what would you like to see?”

The potential ROI of a digital signage network extends far beyond a simple cost versus sales comparison.

There is, in the case of a retailer, the indirect benefit of making a statement that their operation is on the cutting edge of technology. That’s especially important when trying to capture the portion of the demographic that have grown up with cell phones, desktop computers and flatscreen TVs.

Even beyond that there are the efficiencies that can be developed via the capture and use of customer data.

“Because interest is a leading indicator of sales, you can actually use the information acquired in the mobile phone store example and use that to manage your inventory levels and marketing campaigns,” Bannister said.

Nearly everyone has experienced the frustration of visiting a retail store only to find out that the item in question is out of stock, or that it was only available in a store on the other side of town.

“Having the right product on hand, at the right time, for the right customer, is a major challenge,” he said. “By gathering the information I acquire from my customers when they interact with my products and feeding that back into my system, I can not only control things like inventory levels but I can also manage what is being displayed on the signage and create unique experiences at every location based on local demographics.”

If customers in a particular store express an interest in a certain product, the retailer can ensure that store is well stocked with that product. Applying the same concept in reverse, if a product is not garnering much interest in one location, the retailer can increase advertising for that product to boost sales or direct inventory to stores more likely to sell that product increasing the efficiency of their supply chain.

“There are a nearly endless variety of things you can have the system react to in real time, based on the rules you’ve set up, combined with the data received,” Bannister said. “Ultimately, the customer drives the operation of the business. That’s where the value is and where the promise of digital signage is delivered.”

About the sponsor: Founded in 1991 in Toronto, Ontario, Omnivex Corp. is a leader in software development for digital signage networks and electronic displays. Omnivex Moxie software is used by customers in a wide range of markets to manage all aspects of digital signage networks, including content management, real-time data acquisition and distribution, and remote device monitoring and management.

Omnivex software empowers digital communications to better inform, persuade, motivate and engage the audience. It ensures the message reaches the right people, in the right place, at the right time, which means the communications work harder for the business.

Omnivex can help clients achieve real business goals — increase and accelerate revenues, reduce delivery costs, improve customer loyalty, build brand equity and enhance employee engagement and productivity.

 

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