Advertisers are spending billions of dollars to advertise on digital signage, but they feel the pain of not being able to understand if people are even seeing their ads. Since I first became involved in digital signage, I have viewed this as the primary challenge facing the industry. Until this challenge is convincingly solved, digital signage will not realize its potential.
As this is my first blog post for Digital Signage Today, I would like to provide some background about myself and how I view this challenge from my position at Intel. After all, Intel is best known as the company that makes the processors that power PCs, servers and laptops. What do we know about advertising? Let me explain:
I have been with Intel for over two decades, holding a wide range of general management and director-level positions in business, marketing and engineering. Early in 2009 I was asked to start our Digital Signage business — part of the Embedded and Communications Group (ECG) at Intel. ECG is focused on providing the processors for what we at Intel like to call the "embedded Internet" — the billions of devices that will have microprocessors embedded inside them and connected over the Internet. This is a vast market that ranges from home appliances, medical monitoring devices, smart thermostats and billions of other devices — including digital signs.
At ECG, we work with a huge ecosystem of hardware manufacturers, software companies, systems integrators, etc. who put our chips into their solutions. We help them adapt their manufacturing processes and software programming to take full advantage of the power of Intel chips. We also help troubleshoot problems and identify ways they can sell more solutions: What's good for their business is good for Intel. This is the approach I followed when I first began to get involved in digital signage.
Our first step was to do a traditional "gap analysis" — what outages must be bridged in order for digital signage to enjoy steady, upward growth? Right away we identified things like network scalability, remote manageability, energy efficiency, system performance and operating costs as significant issues. But unquestionably, the elephant in the room was the slow growth in advertising revenue: Digital signage reaches people at the most influencing location in the sales process, but something was keeping advertisers from giving digital signage a place in their media budgets.
We talked to brands, agency people, media planners, etc. Many were just barely aware of digital signage, but we knew that even if awareness was raised we would still have the problem of audience metrics: Advertisers need this information to make smart decisions about where to place their ads and, just as important, how much to pay. So our original business plan called for enabling our digital signage ecosystem to deliver audience metrics — we called it Anonymous Video Analytics (AVA) — which would be needed to drive growth for the industry.
Move forward to early 2010: Intel officially announces its entry into the digital signage market at NRF, DSE and other venues. We worked with Microsoft, NEC and others to optimize the performance of their digital signage platforms on our processors, and we used every opportunity to educate our ecosystem partners on the importance of making audience metrics part of their digital signage solutions. A big part of this was addressing the privacy issue.
Video analytics technology uses machine vision software, and the software can be implemented for "audience detection" or for "facial recognition" usage models. We wanted to proactively address potential privacy concerns and decided that our technology would implement "audience detection" usage models. Thus, our technology doesn't recognize individual people, it detects their presence, their dwell time and non-identifying characteristics such as gender, age bracket and height. I wanted people to better understand this difference between detection and recognition, so I insisted on including the word "anonymous" whenever anyone at Intel discussed video analytics: Our approach to audience metrics would be based on Anonymous Video Analytics (AVA).
As we developed our strategy in metrics, we focused on two related issues, system performance and cost:
System performance: Equipping a digital signage solution with AVA impacted its ability to smoothly present high-end video content and animated graphics.
Cost: The metrics solutions on the market were priced at 5X plus the monthly cost of the content management software (CMS). A plug-in costing more than the primary software? No wonder the attach rates for metrics were non-existent.
We focused on coming up with a better way of integrating AVA with our processors and doing it less expensively. So in late September of 2010, Intel acquired CognoVision, a leading metrics provider based in Canada and made it the basis for our Intel Audience Impression Metrics (AIM) Suite.
The Intel AIM Suite is enabled by Intel Core i5 and Intel Core i7 processors, which can run the advanced AVA application while simultaneously playing high-definition video content. This capability to run the anonymous video analytics on the same computer system as the content significantly minimizes infrastructure costs. Additionally, we provide the analytics from a Web-based reporting system, which allows us to store data in the cloud or in a remotely managed Network Operating Center, effectively reducing Total Cost of Ownership (TCO).
At NRF in January of this year, we integrated the AIM Suite into numerous proof-of-concepts developed with key brands such as P&G, adidas and Kraft. We demonstrated how the effectiveness and ROI of digital signage can be increased by dynamically changing advertising content to better fit the interests of those viewing the display. Advertisers can measure and maximize their ROI and also adapt content based on real-time audience demographics.
So, we have arrived at Today, early September 2011, and we just launched our Intel AIM Suite service. The service is available in the Americas, EMEA, Australia and New Zealand, and just this week we processed our first PO from an OEM.
If you had told me five years ago that I would be factoring advertising CPM rates into our digital signage media player designs, I would have thought you were crazy. But in effect, that's exactly what we are doing. And I am under no illusion that this is the last word on audience metrics. Given the big potential, the ongoing effort to get it right is going to be just as big.
Avalos is retail sector general manager for Intel Corp. in the Intelligent Systems Group, leading Intel's worldwide retail & digital signage businesses. His group is responsible for delivering Intel's Intelligent Retail & Digital Signage platforms, software and services, and initiatives fueling industry growth.