Is the tipping point finally here?
September 20, 2006 by Dave Haynes
I was having a coffee with an industry colleague yesterday and yakking about the high level of activity we’re seeing these days. The tire-kicking is over and digital signage, or whatever you want to call it, is a going concern with retailers.
But, and it is a but that can be underlined, all that activity seems to have more to do with RFPs than it does with my favorite two letters, PO.
I’m still not hearing that much about actual roll-outs, and the sales cycle is still pretty long.
However, a new article in MediaPost suggests things really are happening out there:
THE HOTTEST FORM OF DIGITAL media on Madison Avenue isn’t online. It’s out-of-home. Digital out-of-home networks are popping up virtually everywhere: in stores, in theaters, in health clubs, in office buildings, and perhaps most importantly of all, on media planning flowcharts. The new networks, a subset of the outdoor media industry that is sometimes referred to as place-based television, are growing at a rate of about 10 new per month, according to a new report being released this week by marketing consultants Profitable Channels. The report estimates that the 700 digital out-of-home networks launched since 2002 will account for $1.2 billion in national ad spending this year, making it the size of a major network TV daypart.
“The 700 number is probably low,” says Stephen Diorio, a partner at Profitable Channels, and the author of the report. “It’s a lot like when all the dot.coms were coming out. Anyone with a venue and a good audience is launching something and calling it media.”
In fact, digital out-of-home networks are popping up everywhere from high-rise elevators to gas station pumps to public rest rooms, creating new places and states of mind for marketers to reach their consumer and business prospects. The growth is being spurred by a combination of entrepreneurial zeal from venue operators looking to tap the fast-growing advertising sector, as well as from increasing demand form advertisers and agencies seeking alternatives to traditional media. Much of the growth is coming from retail-savvy marketers such as packaged goods companies seeking to get closer to where their consumers are making their purchase decisions, but it also is giving rise to new units within major ad agencies and media buying shops that have begun consolidating or integrating their out-of-home operations into new “shopper media” divisions.
“All the major agency networks – Interpublic, Omnicom, Publicis and WPP – have established within their network ‘centers of excellence’ that are equipped to deal with the unique nature of planning this media,” notes Diorio.
One of the key drivers influencing the growth of the new networks is their ability to deliver conventional sight, sound and motion advertising that big TV advertisers have grown accustomed to, as well as their ability to deliver an extremely relevant message to consumers at a decisive moment in their purchase cycle.
“A gas station isn’t going to be the right venue for every advertiser, but for certain types of products – oil additives, etc. – they can be super highly relevant,” says Diorio, who interviewed more than 50 senior marketing and media executives while researching the 700 networks covered in the report.
“It is one of the smallest segments, but it is also one of the fastest growing segments,” concurs Leo Kivijarv, vice president-research at Stamford, CT-based PQ Media, which is planning a similar report on digital out-of-home networks. “Anecdotally, what we’ve heard is there is a difficulty selling this stuff to advertisers the first time, but once people try digital out-of-home, they are re-upping at a very high rate because they are seeing a stronger ROI.”
Kivijarv says PQ looks at the market slightly differently, grouping the new digital outdoor billboards being rolled out by companies such as Clear Channel and CBS Outdoor in with digital video networks. And unlike Profitable Channels, it does not include cinema advertising in the category. However, if cinema advertising was combined with PQ’s estimates for digital out-of-home networks, Kivijarv calculated that the total market would be about $725 million.
Profitable Channels estimates that cinema advertising currently accounts for about half of the digital out-of-home market in the U.S., but that in-store networks such as In-Store Broadcasting Network (IBN), Premiere Retail Networks (PRN), and Sign Storey represent its fastest growth and greatest reach potential. While cinema advertising networks currently available in the top 40 markets, they only have the potential to reach 32 percent of the U.S. population. In-store networks are currently only available in the top 25 markets, but Diorio estimates they have the potential to reach 93 percent of the U.S. population, making it a broader reach medium than the burgeoning mobile marketing sector.
The rapid growth of digital out-of-home networks has even spawned its own trade association – the Out-of-Home Video Advertising Bureau, or OHVAB – which Diorio says is trying to bring some structure to the emerging marketplace the way the Interactive Advertising Bureau did for online advertising in the 1990s and the way the Cabletelevision Advertising Bureau did for cable TV in the 1980s.
“I think we’re at the tipping point,” says Diorio. “This is a market that is poised to explode.”
While Profitable Channels doesn’t forecast the advertising market potential, PQ Media has begun to calculate the market’s future growth, projecting that in-store advertising networks are growing at an annual rate of about 45 percent, while other alternative forms of digital out-of-home networks – gas stations, convenience stores and unconventional locations such as rest rooms – are growing at a rate of 15.2 percent per year.
canadian tire store
Using programming languages and markup languages (such as HTML) require some of the same skills, but using markup languages is generally
canadian tire store
Definately things are happening on signage. You are going to see more & more advertisement through signs,billboards etc. The digital signage is on a boom right now.