Article

Digital place-based advertising on cusp of financial and creative growth

Digital Signage Today takes the pulse of state of digital signage advertising, and the results are promising.

September 24, 2013

By J.P. Lebangood

Contributing Writer

After facing the challenges of a struggling economy, digital place-based media is experiencing new growth as the economy slowly recovers and advertisers begin to recognize the value of digital place-based networks.

According to a new report from PQ Media, "While global digital out-of-home media (DOOH) revenues increased 11.4 percent to $7.88 billion in 2012, growth decelerated sharply in the second half due to significant downshifts in world economies and advertising markets ... digital place-based network operators generated 70 percent of global DOOH revenues in 2012, growing 8.6 percent to $5.57 billion, the slowest growth since 2009."

However, Barry Frey, president and CEO of the Digital Place-based Advertising Association, sees reasons for optimism. "I have seen some preliminary numbers and the early indications show very healthy double-digit increases over last year."

Others working within the digital place-based media sector tend to agree, reporting double-digit growth in the past two quarters. While some of this growth can be attributed to a slowly recovering economy, digital place-based networks also are benefiting from consumer trends, improved tracking and a greater understanding by advertisers of how to more effective use the digital signage networks.

Philip Cohen, president and CEO of digital place-based network company Care Media Holdings Corp., observes, "Back when then economy crashed, businesses cut back on all expenses, and when it comes time to cut the advertising budget, you don't start with the NBCs you start with the placemats at the Burger King." But now he sees that "...the downtime gave advertisers a chance to sit back and watch the evolution of digital place-based network content and use that as part of the education."

Leading the return to digital place-based networks are larger advertisers, such as automotive, telecommunications and pharmaceutical companies. According to RMG Networks VP of Marketing Chuck Strottman, "It's the larger advertisers that are spending a lot money that are interested in digital signage. They're coming to kick the tires and see if they can make it work as part of their larger media plans."

In a significant shift, these advertisers are now considering digital place-based networks as a line item in their marketing budgets, whereas previously such advertising might be considered as an experiment or afterthought.

Lucas Peltonen, the digital out-of-home director at Pitch Inc., believes a large reason for this shift is the ability for digital place-based networks to demonstrate impressions and ROI. "It is really great to say, according to Neilsen, there are such and such people watching this every hour, every day and every month, and you're paying for a certain number of impressions, and it is measured regularly, and we can back that up with the highest level of research we have right now."

Aside from being able to demonstrate viewership, digital place-based networks also are helping advertisers realize the unique possibilities of the medium. "Our industry can talk to a homogeneous audience about a topic that is top of mind, the reason they are front of that screen, [and] you can convey information that is meaningful, and you can drive them to an action," Anast said. This evolution of digital place-based media from brand awareness to a point-of-sale tool is being embraced by savvy advertisers.

Strottman touts the ability of digital place-based media to reach affluent audiences and decision makers. He points to a recent eBay campaign called "Shopusphere" as an example. Before flights, a digital place-based ad on airplane back-of-seat screens invited passengers to browse eBay during their flight. Ebay made itself a whitelisted site that passengers could connect to free of charge with their mobile devices. This technique, according to Anast, demonstrates, "a realization of the specific, targeted approach and the ability to not just generate brand awareness but point-of-purchase influence."

As advertisers' knowledge about digital place-based media evolves, so also is the creative. "We still get TV creative," Peltonen said. "[But] we are pushing creative groups to build creative that is a little bit more site-specific. It is a major grounds for improvement in the industry."

Frey also sees opportunities to better use digital place-based media as consumers become more accustomed to consuming video content. "The consumer is active and on the go and has become accustomed to consuming content and advertising when they're on the move. It has the advantage of being omnipresent, and size is more expansive." The DPAA is highlighting this trend at their October Summit, the theme of which is "Video Everywhere."

As digital place-based networks continue to grow, many industry experts see certain trends emerging. According to Patrick Quinn, president and publisher of PQ Media, "For DOOH to succeed in the media ecosystem, emerging leaders must drive consolidation, scale, research and efficient processes, while positioning DOOH based on its targeting, flexibility and engagement."

Many see this consolidation including the merger of successful networks to expand their reach and the acquisition of digital place-based networks by more traditional ad-supported media such as newspapers and billboards.

With digital place-based networks continuing to expand their reach, many see the creative content also evolving to increase its effectiveness. For example, Pitch Inc. has an internal committee that tracks trends in digital signage creative. Peltonen believes, "It will be about interactivity, whether mobile, gestural, NFC – any way that is being interactive. I think that's what is going to get people engaged and more personalized."

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Photo courtesy of Ray_from_LA.