Are DOOH networks in big retail tainted?

October 4, 2010 by Dave Haynes

The venerable trade publication Advertising Age has a piece up called “In-store TV Still Fighting For Respect — And Marketing Dollars.”

OK. Agreed on the headline.

Then there’s the kicker, secondary headline: “Why a Little Something Called the ‘Taint’ Still Matters.”

The premise here is that the digital retailing medium has a taint about it that is hard for DOOH network operators to overcome, brought on by years of weak or failed networks. Says the head of a company that’s doing a test of shelf-edge screens in the Bloom grocery chain: “The taint is so devastating that it makes it very difficult to engage someone in an open conversation” about in-store TV.

Well, having your medium described as tainted in Ad Age is not a particularly great start to the week.

It could be easily – really easily – argued that every medium out there has some taint – from failed specialty broadcast channels, failed magazines, failed newspapers, crappy radio formats, gimmicky OOH efforts, a tall pile of alternative mediums that made little sense, and measurement metrics across most mediums that are generally inflated and dubious.

It could also be easily argued that the premise of networked digital in retail is wrong the moment its proponents start calling it TV and selling it that way. The company making the taint remark, Automated Media Services, is totally going for it with an “It’s TV, Right in Retail!” pitch.

The real argument here, at least to me, is whether in-store TV or whatever people want to call it should even be a medium when it is focused on big-footprint retail environments. Networked digital displays will and absolutely should be part of the retail mix in places like grocery and mass merchandisers, but there’s a lot of people who will say that ONLY applies if the network is conceived of, owned and managed by the retailer.

When DOOH goes into big retail, the network operator and retailer rarely have fully integrated marketing programs and processes. Screens usually go into locations after the fact, and often where they can as opposed to where they should be. Even then, the install is at a size and scale usually well below what it should be to actually have an impact. The big 50″ flat panel in my house looks big where it is, but hanging in an 80,000 square foot store with 30-foot ceilings, it would be lost. That’s what happens in those stores, and going the opposite way with teeny screens at the shelf edge is probably better, but still a big compromise made to get in the door.

Because the retailers who sign on to this model rarely have any so-called skin in the game, they are not all that fussed about the size or location of screens, the strategy behind them or how they perform – other than on the promised revenue share side. Go into some of these big boxes where networks are running, and see how sightlines get destroyed by seasonal and special promotions, and convince yourself the third-party screens really matter to those retailers.

People who have been selling and advising on this sector for a long time can rattle off a laundry list of better reasons than revenue share to put in a network. But those retailers are looking at a very big number – in a wobbly economy – to run out a network based on things like sales lift and product education.

Doing that third-party network thing is so much more tantalizing. Someone else can spend the big money to put in all that gear and create all that content. The retailers, in essence, get market tests and R&D done at no cost, and  marginal grief. Potentially, they also get free gear when the network operator runs low or out of working capital and walks away. Cynical, sure … but …

It’s a different story with networks in smaller footprint vertical retailers, because they go after vendor dollars and don’t try to rely on tapping just national media budgets. Their venues are also not cavernous, the vendor list shorter and the audience better defined. They have a shot, as long as they build quickly to critical mass and have the funding to ride out probably 18 lean start-up months.

As hard as it is to read in an influential publication like Ad Age, the taint being talked about is likely real and deserved. I can understand how senior media people might walk into a big grocer or mass merchandiser, look at a screen here and a screen there, and yawn. What would inspire them?

There is a nice big (and growing) pile of research that shows digital in retail has an impact on sales and other key metrics that really matter. But until retailers take these projects on themselves, really think through what they want to see from the screens and make the investment to properly kit out their stores, we’re going to continue to see more of the same.

There will be more big box store networks with too few, and too small screens. More networks calling themselves TV when they’re not. And more venture-backed projects chasing media dollars when the networks don’t have the mass and reach, and the compelling visual impact, to warrant the attention of media planners.