Debating the merits of ad-based networks in stores

September 27, 2006 by Dave Haynes

Self-Service World magazine has an online piece looking at the merits of ad-based networks in retailers. It’s one of those slighlty suspicious articles in which at least some of the companies quoted just happen to have ads on the same page, but the comments are nonetheless valid.

 “Most retailers looking at digital signage networks have invested millions in building up their brands and loyal customers,” said Jason Cremins, chief executive of U.K.-based digital signage firm remotemedia. “The thought of spot-selling advertisements on their screens that do not compliment or have any relevance to their business is unacceptable.”

The piece goes on to note that a few networks are making a go of it, notably PRN  in Wal-Mart, but it is not easy money.

“It comes down to scale and focus,” said Brian Nutt, principal of Captive Indoor Media. “Major advertisers are looking for mass-market reach and not small-target markets. So if a retailer is looking to move cost to a third-party, they will either need scale or the ability to sell ad space. Advertising is a difficult and competitive industry. I think the (digital signage) ad model has merit, but needs a couple more years to mature.”

Nutt is spot-on about scale. Anyone using the Wal-Mart/PRN model as the way forward is in for a very tough go. Wal-Mart is an entirely different beast than just about any retailer, in terms of foor traffic and scale.

I’m not at all convinced many of these ad networks going into stores have much of a shot. One has popped up in my local grocer, and while the install looks good, there’s few if any paid ads, it does nothing to drive sales for the retailer, and, worst, I never see anyone watching the screens.