Digital Signage 2: This Year’s (Business) Model
This is the second in a multi-part series of RetailWire discussion articles on the growth and deployment of digital signage and kiosks at retail.
Within the digital signage community there is a very real debate going on as to the nature of the beast.
Many see the medium through the lens of media buyers believing that its business proposition is ultimately about bringing brand advertising to store level. Members of this school express themselves in measures such as CPM, frequency, gross rating points and reach.
Others see digital signage in a transitional stage where the medium is moving from impression-based ad networks to merchandising networks focused on moving product.
Chris Riegel, chief executive officer of STRATACACHE, recently told RetailWire, “Retailers have come to understand that this technology has a much more direct impact on their product sales than they had originally thought.”
Instead of using the technology to allow others to advertise in stores, retailers, said Mr. Riegel, are beginning to view digital signage as “a critical system they want to own, manage, control and use for merchandising.”
Mike Abbott, president of ADFLOW Networks, said digital signage and touchscreen kiosks provide retailers with “a tremendous opportunity to influence customer behavior at the point of purchase (POP), measure it and adjust marketing at POP to optimize the customer experience and maximize the return on expenditure.”
Accurate measurement, whether in ad or merchandising networks, is critical to the success of digital signage in stores, according to Linda Hofflander, chief marketing officer at Wireless Ronin Technologies.
“Proof of play is of interest to those with an advertising revenue model,” said Ms. Hofflander. “Most advertising agencies and marketers are used to getting some kind of documentation that says this is what happened and it’s verified because that is historically how it’s been done through broadcast and radio. So they’re looking at it, if I’m spending my marketing dollars on this, what are you going to give me to document that it’s been done? It’s the reason that Arbitron, Nielsen and others have gotten into digital signage measuring because they see it as a growing medium.”
Developing a merchandising based network speaks more directly to the real needs of retailers, according to Mr. Riegel. “There is lot of fuzzy logic out there where vendors will say there is organic value in the technology because the customer looks at it. Counting the impressions is something I want to know but to a retailer, what I want to know is how does that affect the sale of products. At the end of the day retailers are there to sell the product. Unless I’m helping you sell a product and continuously sell a product, I’m expendable.”
Discussion Questions: Do you see digital signage as more of an ad or merchandising medium? Are the two features mutually exclusive or do you see a way to balance the two business models with in-store networks?