Former UK Prime Minister Tony Blair once said that "A simple way to take measure of a country is to look at how many people want in and how many want out." Using this metric, digital signage continues to present a good business for both users and suppliers. In reality there are so many people (meaning suppliers) that want into the space that it has proven to be a stress on the industry. But it verifies that the space offers many success attributes and smart companies and users can’t stay away.
Although the in-store digital media industry continues to be a good business opportunity for both users and suppliers, it also continues to be a relatively immature and fragmented industry. The hyper-focused keys to success revolve around measurement and content. Unfortunately, much of the industry is not on the same page as it relates to both of these elements.
More money to fund the industry both from a supplier perspective (new and expanded networks) and from a user perspective (ROI
) will come from the inclusion of digital signage in the overall consumer path to purchase. Including the digital in-store experience with the broader vantage point of how shoppers make their buying decisions (which includes online, social, mobile and traditional media) will propel digital signage to become an essential element of a brand’s media mix equation.
The case for digital signage is still valid. Advertisers will not stop advertising! Consumers are on the go and hard to reach as they spend more time out of the home (OOH). In the home is where much of traditional media has historically reached consumers. With this OOH dynamic, traditional media continues to erode in effectiveness. Brands, retailers and agencies all see these lifestyle induced effectiveness changes and are thus undertaking online, social, mobile and in many cases in-store digital initiatives. Since digital is the most targetable and the most measurable medium in the history of advertising, it will grow in importance as brands employ targeted campaigns.
But as John Maynard Keynes once noted, "The difficulty lies not so much in developing new ideas as in escaping from old ones."
The industry, led by ad agencies, has resisted embracing many of these new digital mediums and has stayed in a comfort zone of traditional media for both economic and structural reasons. Fortunately, each day that goes by shows more and more agencies and brands showing sincere interest in moving away from the old model and welcoming the new.
Suppliers need to get on the same page in providing guidance to the other players in the chain. Unfortunately too many suppliers live in silos in a world where users and brands are looking for integrated solutions. Users alarmingly are not measuring the results with the new media measurement tools nor are they deploying enough dynamic content aimed at utilizing the power of the medium. Traditional media companies have been very slow to look at and accept digital signage and the new media companies in the industry (Apple, Google, Yahoo, Microsoft et. al.) have chosen to explore online, mobile and social as their near-term strategies. Clearly they will ultimately see the power of having a digital presence at the most important: point of purchase.
Lest this sound too negative, there is no question that in-store digital signage will succeed! Remember the old adage, "if you don’t like change, you will like irrelevance even less." The dynamics of the shopper behavior, the path to purchase, proven measurement superiority and the continual evolution of more power/less price for technology all credibly predict success for in-store digital signage.
Putting the following pieces together into a cogent, price-performing strategy will insure success for the industry:
- Content – The most effective deployments use micro-targeted content strategies with dynamic broadcast quality content. But with the cost of a 15-second spot in the $1,500 to $2,500 range for content created in a traditional fashion, most budgets find it hard to fund the required volume of content. The solution can be found in the new cloud-based content development tools recently hitting the market. By using the cloud, professional templates, easy-to-use techniques (i.e. you don’t have to be a graphics designer), a layered construction approach to allow for constant previews before rendering, and a large library of micro-stock clips and graphic elements, users can effectively bring the cost of a 15 second spot down to the $250 to $300 range. The economies are obvious. At these prices, users and brands can aggregate the volume of broadcast quality content to enable the targeting needed for maximum results.
- Technology – Just looking at the flat panel display as one example over the past 10 years, you can see a favorable cost curve that will continue across all aspects of the technology for the application. These price / performance curves will continue if not increase at an increasing rate.
- Advertising – Ad dollars follow buyer behavior and measured results. With consumers spending more time out of the home, and with the measured better results of digital versus traditional media, the ad dollars will continue to grow for digital.
- Mobile – Over the past few years, mobile and in-store digital have been addressed as two independent segments. Over time, mobile, together with social and online, will merge with in-store to enable a brand to seamlessly reach consumers in their out of home lives.
- Measurement – Analytics tools are improving and DPAA has leveled the playing field via standards for digital as it relates to traditional media. Getting users to use the tools and incur the expense is the next hurdle. WalMart's Smart Network is setting the tone and it is inevitable that others will follow.
Hurdles still remain for the in-store digital media sector to become a major force in merchandising and advertising. But with the lifestyles of consumers dictating new marketing techniques to reach them and with mobile, social, online and in-store digital showing measureable advantages over the eroding traditional media options, digital media will continue to move down the path of success.
Stephen Nesbit has been in the digital out-of-home industry since 1999. He is currently principal at Shadow Oak Holdings, LLC and can be reached at email@example.com.