Lecturers at the recent Building Your Digital Signage Business conference in Chicago, Nov. 14 and 15, at the Wyndham Hotel, talked about a variety of different industry aspects. But one unifying theme pervaded the dialogue: advertising.
Though still a budding industry, there was no debate among the assembled executives, academics and entrepreneurs about digital signage’s profitability, only how profitable it will be.
Analyst Norman McLeod of CAP Ventures, who has tracked the industry since 1999, said digital signage has only been stymied by external factors.
“The dot-com bust of 2000 removed a lot of venture capital,” McLeod said. “In 2002, we saw the biggest decrease in advertising since they started tracking it. But the last couple of years have been good. 2005 is when we turned the corner.”
Steve Nesbit, president of Reflect Systems, emphasized the importance of in-store advertising, saying that 70 percent of customers’ buying decisions are made in the store. He said this makes sign placement critical, and urged deployers not to clutter screens with multiple messages.
He related the story of his previous company, Next Generation Network Inc., as a case study to help present-day digital sign entrepreneurs, including the struggle it had proving its value to media buyers.
“Your CPM (cost per thousand) is going to be diminished with the more items you have on the screen,” Nesbit said. “An advertiser isn’t going to like it when their ad is up there with a news ticker across the bottom talking about a plane crash.”
Northwestern University professor John Greening, one of the brains behind iconic TV campaigns like the Budweiser frogs and WHAZZAP, told the audience digital signage is at the Pong stage: popular and flashy but still very primitive.
“The current advertising industry will not be on the leading edge of figuring this out,” Greening said. “If you’re selling new ideas, go to the people who are in the most pain. Go to Dell right now, they’ll buy a lot of stuff. Pain gives you incentive to innovate.”
He also noted that traditional retail shopping, as opposed to in-home Internet shopping, will become more about the experience, and that digital signage will be a key element in giving stores rich, interesting environments to attract customers. For example, he cited Cabela’s, an outdoorsman shop, which dedicates 25 percent of its floor space to non-sales purposes.
“You can see tropical fish and stuffed animals,” Greening said. “So you can see what you’ll shoot with the guns you buy there.”
Brad Gleeson, VP of business development for Touchscreen manufacturer Planar Systems Inc., noted the similarities between digital signage’s uses and that of kiosks and self-service including way-finding, customer service, lobby displays and communications to employees.
Many attendees said they came looking for partnerships with other digital signage companies, hoping to extend the reach of their networks or software. Artisan Live marketing manager Kris Matheson, whose Canadian software firm is expanding its Mobile Affiliate Advertising Program, an interactive, pay-per-text digital sign ad network, has attended the conference for two years.
“We wanted to find more partners for our MAAP program,” Matheson said. “In the United States, up to now, there has been a lot of conversation about mobile phones interacting with digital signs. The program that we’ve built is an associate marketing program like Google uses.”
Mall Network president Jeff Jensen said he is convinced of the value of text-message-based interactive digital signage as opposed to other interactive technologies, like Bluetooth, which he said is still years away from widespread adoption. Jensen, who worked in retail and online marketing for FOX’s parent, News Corporation, said traditional media, like TV and newspaper, are dying because they have never offered reliable demographics of their audiences.
“Knight-Ridder is a perfect example,” Jensen said. “They collapsed under the weight of the lies.”
