Digital Signage: Evolution of the ad-based network

by all | 4 April 2013 8:30 am

By Andy McRae
It is a time of tremendous growth in the digital out-of-home (DOOH) advertising sector. The scope of digital signage network placements keeps expanding to new horizons. Marketers and agencies have realized dynamic place-based advertising is now well-established, achieving solid results and offering significant new opportunities.

The figures speak for themselves. According to the Digital Place-based Advertising Association (DPAA), the first half of 2012 saw digital advertising experience 11.8 per cent growth, compared to only 1.9 per cent growth for measured media overall in the same period of the previous year.

Unsurprisingly, it is not just out-of-home (OOH) advertising firms that want a piece of the pie. The types of networks that are accommodating the inclusion of advertising are becoming broader and broader, whether screens are mounted in doctors’ offices, car dealerships, health clubs or bars. Owners of established digital signage networks are seeking to bring an advertising component into their content mix.

The key to success, however, is to find a way to transition away from a typical content-based network to an advertising revenue-based business model. A simple ‘if you build it, they will come’ approach will not work. There are many factors that must be considered first to avoid making mistakes.

Network
Before it will be possible to sell ads on screens, it is essential to create a comprehensive profile of the network’s inventory, including the types of screen-installation locations, whether or not they are audio-equipped, how long people spend there, what they are doing and, especially, the purpose of the network.

Audience
Beyond the screens themselves, it has become important to know who sees them. In the past, it was sufficient to measure and report circulation in terms of sheer numbers of eyeballs. Today, advertisers need to know who sees their content, not just how many people overall. This necessitates a profile of a network’s audience demographics.

Clients
A digital signage network owner also needs to know who to sell space to, so it is imperative to identify which advertising clients would be interested in reaching the network’s audience and willing to pay enough to do so.

To determine whether or not there is a market for the media, it is helpful first to research other, similar networks and even ‘static’ media in the same venue. With this information in hand, one can develop a strategy to go to market. This may involve selling direct, participating in a ‘co-op’ program, working with an aggregator or even turning to an OOH firm to act as a sales agent.

Another key is to make the media as simple as possible to sell. One of the perceived problems with DOOH advertising today—and, to a certain extent, OOH advertising overall—is it is hard to buy. This perception may be erroneous, but it is important to ensure such sales are almost a one-phone-call deal.

Ad management
After showing a digital signage network is ripe for the addition of advertising, the issue of managing the new component comes into play. It is important to choose an advertising management software package that can deliver content appropriately for the given type of business. If there are expectations for day-parting, randomizing or screen-parting multiple types of creative content, the software being deployed must be able to handle those functions.

This raises the question, however, of what exactly constitutes ad management software. Essentially, it is a platform that allows users to schedule ads—dynamic or otherwise—based on various criteria, including those given by the advertiser.

This may sound a lot like a digital signage content management system, which after all can also distribute content to various media players and screens, as well as log information about which content played where and when. An ad management system, however, goes well beyond these functions.

Instead, it can more accurately be thought of as the business management system behind a digital signage network. It allows users to check availability, conditions, restrictions, leases, demographic profile data and detailed metadata.

Ad management software users can more accurately select appropriate screen locations for ads and then collect proof-of-performance information, intricately broken down on an individual clip basis, rather than simply full-day proof-of-performance. This enables optimal calculations of cost per ad or cost per thousand views.

Inventory management
At the centre of ad management is inventory management. The efficiency with which a network operator uses his/her inventory will define whether or not he/she is successful.

Inventory management represents the ability to manage all facets of the digital signage business model, which means tying together all data captured from a given location, scheduling ads and content, creating contracts in the system, assigning media to specific locations and delivering full campaigns.

Client management
Other important facets of ad management include sales, contract management and proposal generation. In these ways, the software dictates how a digital signage network operator interacts with clients. It has a real impact on the ability to provide meaningful contracts and proposals to show customers how a network is meeting their requirements in a timely manner. The goal is to have succinct data available and delivered quickly to clients via e-mail.

The ability to communicate large amounts of pertinent information is, indeed, key to software success. It is not enough to know how many times an ad has played—today’s digital signage network operators must be able to tell their clients much more than that, delving into the demographic profiles of locations where the ad played and how much of that was ‘overplay.’ It may even be possible to pull in relevant retail data to check if an ad had a direct impact on sales of a promoted product.

Business management
Of course, in addition to offering the minutiae of day-to-day operations, ad management software should provide the ‘big picture.’ Users should have a ‘macro’ view of larger facets of their business and an overview of the whole company. It is just as important to know how it is doing overall as it is to know what each specific screen is doing.

Looking at the detailed numbers as a bigger picture can help determine, for example, if one screen location is adequately profitable when all costs are taken into consideration. And if one particular sales approach is making money, then changing the mix elsewhere may increase profitability at a larger scale.

In these ways, digital signage network operators can turn the microscope on their own business and make more meaningful decisions with less guess work.

Future trends
With more digital signage networks transitioning from non-ad-based to ad-based business models, it is natural to ponder what comes next. One answer is to focus on engagement over exposure. Compared to other forms of advertising, digital place-based media can offer that focus in a number of ways that have proven successful, such as through social media campaigns that yield nearly instantaneous feedback.

In another example, some retail digital signage networks are extending their software and hardware systems to enable near field communication (NFC) with smart phones and other devices. This proximity-based data-exchange technology allows shoppers to ‘connect’ with in-store brands, whether this means walking away with more information or even placing and paying for an order right at the screen location. These capabilities can only be good for business.

With a broader media experience, of course, there is more information to be managed. An increasing number of digital signage network operators are moving toward unified communications (UC) management, which entails not only advertising, but also all other facets of dynamic message delivery and measurement, all managed through a single software platform.

It is inevitable that as DOOH advertising grows, standardization will follow. With the industry seeing the consolidation and growth of digital signage networks, such aspects as ad format and length, media type and screen size are all being standardized, which in turn makes it easier for ad agencies to buy space—and for content designers to fill that space.

Andy McRae is general manager (GM) of Dot2Dot Communications, a Toronto-based developer of ad management software and the Canadian distributor for Scala digital signage software. For more information, visit www.dot2dotcommunications.com[6].

Source URL: https://www.signmedia.ca/evolution-of-the-ad-based-network/

---