Blog: David Little 
David Little (bio)
Director of Marketing
Keywest Technology
Friday, 15 June 2012
The latest data from PQ Media reveal 2011 was a good year for digital out-of-home advertising, and 2012 is on track to be even better.

While stock markets around the world retrace, the financial picture of Greece and Spain flounders and the world holds its collective breath waiting to see if there'll be an attack on Iran and a spike in oil prices, there is a piece of outstanding economic news for those involved in the place-based digital media market.

2011 was a great year for digital out-of-home advertising, and this year is setting up to be even better. Data from PQ Media released in April show that global digital place-based networks, billboards and signage operators saw revenue grow by 15.3 percent to $6.97 billion last year. This year, the revenue figure is projected to be even better, growing 19.2 percent.

In the United States, DOOH operator revenue climbed by 11.2 percent last year. According to PQ Media, an econometric research and consulting service in Stamford, CT, digital billboard operators saw double-digit revenue growth and operators of place-based networks saw a high single-digital rate of growth.

According to the PQ Media "Global Digital Out-of-Home Media Forecast 2012-16," the compound annual global growth rate for the five year period will be 13.7 percent. Much of the revenue growth appears tied to a recognition of how important it is to reach consumers outside the home where they make purchases. "While TV remains the 800-pound gorilla of ad-based media due to its reach, scarcity and measurement, DPNs (digital place-based networks) offer brands opportunities to extend their reach by engaging target consumers with contextually relevant content in venues outside the home," said PQ Media CEO Patrick Quinn.

Digital signage networks were one of the fastest-growing ad-based media in the United States last year. While PQ Media acknowledged a deceleration in the rate of growth in the second half of 2011 due to cyclical economic events, it found digital place-based networks experienced a revenue increase of 10.7 percent from 2006 to 2011.

According to PQ Media, digital place-based networks are likely to benefit indirectly from the Summer Olympics in London and the U.S. political campaign this fall. Both traditionally inject significant revenue into local television stations as well as cable and broadcast networks. This time around, however, PQ Media foresees a scarcity of TV inventory. As a result, major brands squeezed off television could be forced to consider other video platforms, such as digital place-based networks, said Quinn.

The latest revenue tally from PQ Media is another in a growing string of positive developments over the past couple of years for the digital signage industry. Together, they wins demonstrate that digital placed-based media is a viable and being taken seriously by companies with products to sell and the advertising agencies they hire.

The growing availability of audience metrics for digital place-based media is adding a sense of legitimacy about this new medium for those who control where ad dollars get spent. The PQ Media ad revenue numbers, therefore, shouldn't be too surprising.

Going forward, the next big test for this medium will likely be whether or not those responsible for buying ads will reallocate dollars from television to digital place-based media.

With the possibility of too few available commercial slots on TV in the second half of the year, there might be a hint as to whether digital place-based media can begin taking on the "800-pound gorilla" and winning.
Posted by: David Little AT 05:15 pm   |  Permalink   |  0 Comments  |  Email
Friday, 01 June 2012
Digital signs give retailers a powerful way to communicate with retail shoppers as they act out on their impulses to buy unplanned-for items.

If there were ever a question about whether or not it makes sense to communicate with customers via digital signs in retail stores, a new survey from the Integer Group and M/A/R/C should leave no doubt.

According to The Checkout, an ongoing shopper behavior survey, nine out of 10 shoppers report buying an item not on their shopping list. The research reveals several reasons why. Sixty-six percent of respondents reported buying off-list items because of a special sale or promotion; 30 percent said they did so because of a coupon offer; and 23 percent said they wanted to pamper themselves.

Digital signs are a great vehicle for retailers to tap into the opportunity this consumer behavior presents. They are a natural when it comes to presenting special promotions. Ditto for coupons. They can be tied into coupon-dispensers or used to display virtual coupons based on QR codes that can be photographed with a mobile phone camera and displayed at the checkout stand. And they certainly are a powerful medium when it comes to presenting products in their best possible light to tap into the desire by many shoppers to pamper themselves.

Craig Elston, senior vice president with Integer summed it up this way: "Our data shows 61 percent of off-list shoppers purchase an additional one to three items. This shows that if you reach a particular shopper at the right moment with the right message --for example, using in-store signage to play into their desire to pamper themselves, it can end with that item being added to their basket."

For retailers, this sort of data is critically important as they evaluate their marketing budgets and make decisions about the return they can expect for their investment in digital signage technology. Without data on consumer buying behavior and how many more items shoppers are likely to buy, calculating an ROI equation of digital signage becomes an exercise focused on identifying costs of competing alternatives and determining which is the most attractive.

With findings like those presented in the latest Integer Group- M/A/R/C research, it is possible to add an evaluation of potential added revenue to the mix. It would be helpful in future studies if these researchers or others could compare the effectiveness of competing signage solutions, i.e. traditional printed signage, Duratrans backlit signs, digital signage and others. Insight into the average dollar value of additional items purchased would be helpful as well.

Even without that data, however, it's not a stretch to say that all things being equal, digital signage should produce the most attractive ROI in retail. After all, it is more responsive to changing messaging needs, is less expensive to use in terms of updating messages, and can be centrally controlled with local input to provide messaging consistency across retail chain locations while still offering an avenue for individual stores to respond to local needs.

The new Integer-M/A/R/C data should motivate retailers to re-examine how they are informing, educating and enticing consumers at the point of purchase. If dynamic messaging on digital signs in retail isn't part of the mix, retailers should reevaluate their approach to maximize their presence at the point where shoppers reach into their back pockets or purses and act on their impulse to buy.
Posted by: David Little AT 04:37 pm   |  Permalink   |  0 Comments  |  Email
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