Digital Signage Transforms In-Store Advertising
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Digital Signage Transforms In-Store Advertising

Welcome to the future of advertising...a future that could reinvigorate a medium beset by splintered audiences, too many messages and continually escalating costs.

By Rebecca Walt

Itís late afternoon, and a 30-something mother is running into the grocery store with shopping cart and four-year-old in tow to pick up a couple of things for dinner, and a cookie for the little one. She isnít sure what her husband and three kids want, but as she walks into the store, something on a plasma screen overhead catches her attention.

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  • She moves the cart forward, but stops and turns to watch the screen again. Two women are talking about picking something up for dinner, and theyíre laughing. The woman smiles and the image on the plasma screen dissolves into that dayís special ≠ family-style dinners in the deli department at 20 percent off. Now she knows what she is buying for dinner.

    Welcome to the future of advertising ≠ a future that could reinvigorate a medium beset by splintered audiences, too many messages and continually escalating costs. Point-of-purchase advertising that uses state-of-the-art digital signage, like the plasma screen and the deli special, will allow retailers to reach their best customers when theyíre ready to buy, and allow them to do so at a fraction of the cost of other media and with almost 100 percent penetration. Who can argue with results like that?

    Best yet, whether grocers, specialty retailers, quick-serve restaurants or book stores, they can use a digital signage network system to generate cash, whether from specific vendors who pay for space or by sharing revenue with a third-party media company that sells the space.

    This isnít something different from what retailers are doing. Itís an extension of what theyíre already doing ≠ the same look, the same feel, and the same message. But itís so much more sophisticated and effective. Itís not just another PowerPoint presentation.

    Facts and figures
    That the advertising audience is becoming more fragmented, more difficult to reach, and more savvy is not new. A host of new technologies and developments, from digital video recorders like TiVO to inexpensive satellite and digital cable, have made it possible to watch hundreds of channels or to use the television set as a game platform, and skip the advertising entirely.

    One of the most recent examples of these changes ≠ last fallís discovery that a significant number of 18- to 34-year-old men have apparently stopped watching television ≠ dovetails with a survey done earlier this year from the Association of National Advertisers that its members increasingly find TV ad prices unfair given the declining audience, that more and more of them are unhappy with the way the networks measure their audience, and that many are beginning to wonder if anyone is even watching TV commercials. Said one ad executive: ďI want to know that what Iím paying for is what Iím getting.Ē

    Another way to look at it: while rates for prime time TV ads climb, the number of viewers is eroding. Meanwhile, TV advertising is about a $53 billion business (Zenith Optimedia, 12/03), while in-store point-of-purchase advertising is about $17 billion (POPAI research, 2004). With more than 70% of all purchase decisions being made in-store this is a lopsided ratio, especially in view of the decline in the network audience.

    That math means itís becoming more and more necessary for advertisers to find more effective ways to reach consumers. Hence, digital signage, and reaching audiences at the point of purchase with ads that are not just TV-quality, is more relevantÖjust like the woman buying dinner for her family.

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    Making it work
    This all sounds well and good, say critics, but what makes digital signage different from similar sorts of tactics that have been tried, and have failed, over the past decade?

    Digital signage reaches smarter audiences who expect a smarter medium. Digital signage looks like TV, but it feels like the Web so thereís a familiar feel to it, but the pacing and movement and the message is more like the Web.

    How important is digital signage in the buying process? One consultancy estimates that two-thirds of purchasing decisions are made in-store. One specialty retailer, meanwhile, reported a 10 percent sales increase in the first few months after installing a test digital system, and a Nielsen Media Research study conducted on behalf of another retailer showed that in-store broadcast television builds brand equity, customer satisfaction and shopper loyalty. It also found that average ad recall for one retailerís in-store system was 57 percent, compared to an industry average of 24 percent for in-home television ads.

    In fact, digital signage plays into the consumerís increased sophistication. Itís no coincidence that retailers, store designers, and consultants are focusing on enhancing the shopping experience, turning the retail space into an energetic, trendy, and vibrant environment. Thatís exactly what digital signage, using plasma screen technology, offers.

    Second, the technology and the ability to use the technology has evolved far beyond TV sets and stale, tired commercials that loop continuously every 15 to 30 seconds. Messages can be changed constantly, tailored to specific day parts, store situations, seasonal needs, or whatever the situation demands. Banks can adjust the message to reach retirees who tend to visit in the late morning, focusing on products best suited for seniors.

    Bookstores can advertise new releases, upcoming author appearances, and specials in the cafť. Equally as important, digital signage can deliver better quality graphics, text and moving images than most consumers can get on their television sets at home.

    Itís also crucial that the message is part and parcel of the retailerís overall message, so that the in-store piece has the same look and feel as its TV or print messages. It doesnít look cheaper or confusing, but delivers the branding to the customer seamlessly; making it another extension of the retailerís marketing.

    The goal is to deliver exactly what the retailer wants, be it to aid a purchase or up sell, build awareness and loyalty, get the customer back in the store for another visit, or reinforce branding.

    What it Takes to Run a Digital Signage Network
    A true networked digital signage solution ensures that a digital ad plays in designated zones, at designated times. It should include content design and development; digital asset and learning management; broadcast-quality production services; multi-purpose platform engineering, installation and on-going support. Putting together a digital system is complicated, taking into account the hardware to send and receive the content, the software to run the system, and developing the content to distribute. But the rewards of increased customer traffic, message retention and brand awareness and product lift are worth the investment.

    This article was written by Rebecca Walt, managing director of retail operations for Convergent Media Systems. Walt has a 20-year background in retail and consumer packaged goods, holding executive positions at A.C. Nielsen and IRI. She runs Convergentís retail operations and consults large retailers in effective digital signage strategies. Walt can be contacted at waltr@convergent.com or 770/369-9126.

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