Ken Borruso is the CTO of www.visualincite.tv. Visual Incite is a provider of collaborative marketing media and change management solutions.
"Targeting the 21st-century consumer" is a three-part series that will run on Fridays in September. Click to read Part 2.
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Ken Borruso, CTO, Visual Incite |
Owners of restaurants, retail stores, medical centers and bankers are sitting on a goldmine of dynamic messaging opportunities to brand their identity, and incite decision making and spending. These owners have the power to provide their own content and their own commercial advertisements to their own guests and employees in real time. They can buy local news and weather content or produce their own and use the screen time to sell direct product placement advertisements and sales to their own merchandisers. They can use the network to manage waiting lists, take orders, make a special announcement and present menu items. They can broadcast employee communications messages for education and training initiatives and town hall meetings for large gatherings of employees.
Business owners have the potential to create their own niche-sponsored mini-channels and send unique targeted messages to guests that benefit their interests and bottom line metrics. As is the case for inside store marketing and merchandising methods of selling shelf space to manufacturers, the real estate property owner can sell screen time to their manufacturers, too.
The business owners themselves, initially considering a digital signage network as a big expense, may be unaware of just how profitable these network channels can be for the direct and indirect placement of their own compelling content. It is so compelling that broadcast media companies have been acquiring special interest networks for the past two years.
But business owners are not the only ones with an out-of-home interest in the direct consumer. Broadcast television networks are changing their positions from content providers of news and weather services to outright direct purchasers of networks from existing successful privately managed operators in venues like doctor offices, supermarkets and other out-of-home locations.
These business owners need to see the potential that mini-channel programming can have on their business by providing pre-qualified viewers messages that directly impact their near immediate purchasing decision and compare it to television-based advertising costs.
The first thing that owners need to understand is that digital signage CPM (Cost-Per-Thousand Impressions) is different than the broadcast media CPM. Broadcast CPM is used as a metric to reach audiences of millions of people within a common segment. CPM is not an exact science, but it is used to generally help the mass media buyers understand the size of their target audience. There is no way to directly correlate CPM to revenue, so third-party metric companies are hired to provide statistical equivalent results.
Digital signage, on the other hand, has a CPM that is focused on a smaller set of pre-qualified viewers, many of whom are out of their home, in a store, about to make a direct purchasing decision. This smaller, focused group of pre-qualified buyers has a much higher value to advertisers and therefore the network operators can charge a premium to be positioned on the screen.
The network broadcasting business
Broadcast television is a service model mostly sponsored in segments by geography or network plant, combined with the program content and time of day. This model was created to support a free television experience to viewers from a radio transmission signal. The signal tower costs money to operate, as well as to produce content for the shows. Originally, there were only a handful of broadcast channels to choose from, and there was no recording and playback technology available to the consumer in their home. There was limited bandwidth in use, and no DVRs. All we had to do was buy a television and all we could watch was what the broadcast owners thought would be the most compelling content of that era that would make them money.
One way to look at television from the broadcaster perspective is, they look to sell the time between compelling content programs, while at the same time, we look for compelling content between commercials. Over the half-hour program, we both see the same thing, but have two different goals in mind.
With the expansion of cable and satellite in the '70s and '80s, the concept of free television for the consumer ended. This may also be the first major disruption to the original free broadcast media model as it created an overabundant supply of bandwidth to a finite set of creative genius production.
The introduction of cable made it possible for new producers to break into the business and launch vertical market channels, like magazine niche counterparts have done. However, after 25 years, the broadcasters continue to struggle to find a constant series of compelling content to fill their traditional national syndicated programming. In a way, cable television may have diluted the overall quality of television by creating alternate programming channels using the traditional channel advertising broadcasting model only to be out done by the introduction of the Internet.
Today, with over 200 channels to sell, competing with the Internet for new and innovative content, broadcasters find steady viewership in real-time news programs, programs about news programs, reality programs and news programs about reality and lifestyle programs.
And the most successful program model in television is a weekly reality show that uses the content it produces to sell more content. It is pure genius, marketing and programming all built into one segment. This can be a reference model for a digital signage network. In American Idol, they use the content (real people) to perpetuate and sell more content (the real person gets a chance to become a real recording artist).
It is very much like the model of a television retail store, selling screen time to their television manufacturers to promote and sell more HDTVs. Using the media to sell more merchandise is where the real estate owners can realize extreme value to their model.
