Ad Agency Jungle Drums Sounding Louder on Digital Signage --- TV ad spending being challenged.
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Ad Agency Jungle Drums Sounding Louder on Digital Signage --- TV ad spending being challenged.

Insight into the changing landscape of media buying, from the buyers of advertising

By Lyle Bunn

“A network-TV dominated advertising market is not what the future will be” declared Sir Martin Sorrell, Founder and Chair of WPP in addressing the Marketing Innovation Summit held June 14, 2005 in Toronto. A dozen marketing agency leaders delivered concise, important and exciting perspectives on the new realities of marketing as a business, including the digital space.

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  • Leading marketing globalists offered thundering messages on the need for precise marketing and communication practices and performance ROI that meet the new realties of today’s borderless and diverse consumer market.—all sweet music in the ears of digital signage providers.

    Yasmin Glanville, president of CTR Inc., an innovative strategy and solution consultancy serving marketers and partners, branded the term “Evo-lation” as “… an imperative for being a future ready market leader/trailblazer.” She added, “Marketing is no different than any other business that needs to prove its performance value: ROI, but not at the expense of creativity and innovation. For without innovation the marketing profession would cease to exist as creator of strong brands and value differentiation.”

    Being open to innovation
    To set the tone for forward thinking leadership, Glanville invited the 220 marketing communications and agency professional delegates to open their minds to the new realities and requirements of marketing-business success.

    The theme was “Trail-blazers”. Each presenter has worked in the trenches and risen to be top of their game within the marketing industry as a marketer (client), marketing partner or both. The keynote speaker was Sir Martin Sorrell, Founder and Chair of WPP Group, one of the world’s largest transnational conglomerates of marketing communications services providers. Sir Martin, along with executive marketers and subject matter experts, was direct and compelling.

    Sir Martin Sorrell is Founder and CEO of WPP which buy $40 billion annually in advertising through its companies such as Ogilvy & Mather, Young & Rubicam, J. Walter Thompson, Grey Worldwide, Millward Brown, Wunderman and others located in 1700 offices in 104 countries. One of every four ads in the world is purchased by a WPP company on behalf of its clients which include more than 330 of the Fortune Global 500; over one-half of the NASDAQ 100 and over 30 of the Fortune e-50.

    Sir Martin continued, “The relative power of TV is declining…and increases in CPM for TV necessitates shifting budgets and experimentation”. He expressed concern over the widening gap between production capacities and the abilities of marketing to keep pace with commercial opportunity (i.e. revenue and gross margin generation).

    Fast changing market demographics and consumer behaviors necessitate a major shift in how and where marketers communicate with consumers. Sorrell cited “Wal-Mart is 8% of US retail sales and the 9th largest “country’ in the world as far as retail sales. More people go to Wal-Mart in a week than go to church on Sunday”.

    Statistics reinforce the need to use different communications approaches for reaching consumers. Wal-Mart “In-store Television”, the term used by PRN in describing its digital signage displays, reaches 200 million consumers monthly in over 5000 stores where shoppers spend $300 billion annually. Retailers and digital signage network owners point to the number of location visits per week by consumers who are ready, willing and able to spend. “This is another example of innovation at work,” said Glanville, adding “Stepping into the future world of marketing success, includes creating opportunities for consumers to touch and experience product/service choices in the context of where they explore and shop.”

    “In 2004 the lines crossed” said Terri Tinella, SVP Communication & Marketing Effectiveness, Nestlé Canada, “spending on communication-related subscription by consumers such as cell phones, home Internet, cable, satellite TV and radio, etc. exceeded advertising media buys.” Each subscription takes attention from other media, and the fragmentation is compounded by the number of channels and viewing options.

    “TV’s captive audience has escaped!” reported Bill Ratcliffe, President of Millward Brown, which specializes in marketing-related measurement. He added “TV’s ROI as an advertising medium is declining every year to a full 30% brand awareness decline over just 10 years. Branding success is critical to assuring preferred margins through premium pricing” he said.

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    Sir Sorrell said “branding, that is to say “bonding” with consumers on intangible values, is both legitimate and critical”. “You can have innovation without branding but not branding with innovation”. He also reinforced Glanville’s message about two of the success keys being innovation and strong branding identity, differentiated by intangible values of people.

    Dr. Ratcliffe used the psychology term “perseverate” to characterize the state of advertising ­ in times of crisis, doing the same things that have been done in the past, only faster. “Being ROI-obsessed must be the response to our knowledge that the tools that marketing have used are just not working”. He demonstrated that familiarity gained through repeated communications about a product or service will trigger it being trialed by consumers. The importance of reaching prospects with a message cannot be understated. As awareness increases, trial of a product or service increases ­ more trials result in escalating usage… and revenues.

    “Innovation and branding are the only way out of becoming commodity and price-based”. Ratcliffe continued “Marketers must think like investment managers”. He described research as “a cost of investment”.

    “Internal communications is critically important and an area of primary challenge, in particular in multi-branded companies” reflected Sir Sorrell when addressing the need to leverage efforts and maximize ROI. “Increasing visibility of marketing messages with staff, channels and in other business units offers significant return on investment and spawns innovation” he said. “The cost and time of project-related communications is part of the ROI requirement.”

    A key benefit of digital signage is the “digital” component. An assurance that ads are posted as and when planned, reducing the costs of ad production and display logistics, leveraging production costs, increasing speed-to-display and the cycle time of test-refinement are inherent benefits in the “digital” of digital display networks.

    Communication as key
    Alan C. Middleton, Executive Director of the Schulich Executive Education Center used a line from the 1967 movie Cool Hand Luke when Don Pearce said, “what we’ve got here is a failure to communicate”. Middleton noted that “the intolerance for wasted ad spending is growing, and pointing to the high value of examining new alternatives. In this examination statistical measurement is imperative and will drive decisions.”

    The direct question posed by Doug Snetsinger, President of DRS Insight Group & VP Integrated Services, Grey Worldwide, to late day panelists is as important for its asking as its text. He asked panelists “Is the marketing model broken?”

    The unanimous response is that while “broken” may not be the right word, the current marketing model is “inadequate.”

    “Ad agencies risk being marginalized as businesses if they cannot prove their worth,” said Trish Wheaton, President of Wunderman Canada, who was recognized as 2004 Marketer of the Year. “Advertising is about business building, and communication decisions are based on business decisions.”

    Wheaton reflected on the need to move from CPM (cost per thousand) to ROI (return on investment) and investment effectiveness metrics.” She reflected concern at the fear on the part of marketers to cross the digital divide. The shift from “mass” to “measurable” points to an important shift from television to digital signage and purchase location signage. “The future is direct marketing, relevant and accountable,” declared Wheaton.

    Marketers have exploited television in a “Town Crier” marketing approach. Reach was the currency as the Town Crier announced availability in the most compelling way possible. And the TV set-- around which people gathered--became the electronic Town Crier, broadcasting messages in a one-to-many approach. “The future is measurable, accountable communications,” Wheaton stated.

    Terri Tinella of Nestle called for creativity to get better advertising ROI, noting the challenges and opportunities of more consumer leisure time, consumer choice having increased to the point of clutter and consumer inclination to spend being higher. She challenged media planners and buyers to “move beyond doing the same things differently into doing different things, differently.”

    WPP and leading marketing agencies are hunting down better marketing communications ROI. The tracks lead to dynamic digital signage, in-store TV and other communications vehicles at spending locations. Whether motivated by a passion for performance or threat of survival, service-focused marketing and media suppliers are hot on the trail of digital signage. Trail-blazers will get there first by “Cutting through the blur and Evolating!”

    Lyle Bunn is Director, Digital Display & Rich Media, BTV+ and serves as Chair, Education Committee, Digital Signage Group, POPAI (Point-of-Purchase Advertising International). lbunn@canbtv.com. www.btvplus.com

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