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10
Gosh…has it really been over 15 days since I last posted? Where does the time go? Lots of posts to make on catching up over the next couple of days.
There’s always been a contentious issue over not only where Digital Signage fits in the media buying side of things (is it out of home (OOH), a type of television buy, similar to Internet, in-store media budgets, etc) and it’s one of the things that sort of inhibits spend growth in the Digital Signage space.
Of the media agencies I deal with, most put it squarely in the OOH camp but then only have a couple of people who know a lot about strategically buying OOH. Knowledge of what type of Digital “OOH” to buy and what works and is efficient for different industries and Brands is fairly low as the experience just isn’t there…makes sense…it’s a new industry and things move slowly. E.g. Does advertising Ford on Digital Signage work better at Gas stations or in health clubs or in elevators? You’d be surprised at the results. Some of the other agencies I work with interestingly slot Digital Signage as a trailer to a TV buy. They use the mentality that “This isn’t selling paper (outdoor) and requires the input of someone who understands some form of “Broadcast” knowledge to make effective media buying decisions based on audience, reach, venue, etc.
Who you sell to in each agency really dictates how fast the uptake is. Selling Digital Signage Ad Inventory has always been interesting.
When you’re looking at selling ad inventory, the available dollar pool is only so big. To get money into our industry requires that money be taken OUT of some other pool and invested IN to ours…it’s not new money. To date, a lot of people have been eyeing the TV budgets for where they want it transfered from or waiting as the traditional OOH budgets grow organically to include them.
So I was interested when I saw this post on Editor and Publisher on which budgets were moving the fastest DOWNWARDS:
The Mediapost synopsis reads like this:
Newspapers are losing ad dollars to the Internet at a faster pace than other media, according to a report from Wachovia Equity Research. Of 55 advertisers in automotive, retail, telecommunications, financial services, general services, media, and tech/Internet only one category — financial services — actually increased its newspaper spend.
In total, newspapers lost 14.3% in ad dollars last year among those seven, while TV gained 4.4% and the Internet jumped 17.8%. Telcos moved the most out of print, from spending 31.6% in newspapers in 2005 and just 24% in 2006. And an auto shift hurt as well, with the category spending just 4.6% in newspapers last year — half the 2005 total.
I thought this was interesting for a couple of reasons that may make for a good argument for those of you selling localized ad inventory:
- If money is already pouring out of an area, get underneath the faucet. Looks like people are more comfortable shifting media $s out of Newspaper, so take advantage of the mentality by beating up paper!
- As I’ve alluded to in past posts about advertising in this space, I believe that over 30% of the revenue for Digital Signage will be from localized services (real estate, car dealers, etc.) even if the overall inventory is bought at a national level and local media dollars are what the Newspapers make their living off of. Seems to me like you can make a strong case for going toe-to-toe
- There is a prevalent attitude to shift dollars into “alternative media”, which we are, although Digital Signage is lower on the totem pole than other forms/formats
- Digital Signage is not only more targeted than newspaper, it has (from research I have) the same or better response rates and recall as a medium. Newspapers are used a lot by folks like Home Depot to do localized blankets of specials, promos, etc to drive them to an event or store. If you can offer even BETTER targeting and localization for less cost, it makes the decision to shift budgets much easier
Anyway. Might be an interesting (read: different) way/approach to sell certain industries and media agencies on the benefits of Digital Signage
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4 Responses to “Target Newspaper Budgets for Digital Signage Ad Revenue”
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I left the newspaper business after 20 years, thoroughly frustrated that the great, great, great majority of my colleagues saw the Internet as little more than a fad, but a great way to boost their egos by putting their stories and columns online.
In the late ’90s a huge chunk of a tyoical daily’s revenues came from recruitment ads and classified line ads. Smarter people than me, and then dumbass new media manager me, all suggested these dollars were going to be eroded because online was simply easier.
I love the newspaper business, but it has forever been changed by online. Another medium that likely does a better job on local advertising is very bad news for those ink-stained wretches and they’re not a bunch who adapt quickly to change.
[Does advertising Ford on Digital Signage work better at Gas stations or in health clubs or in elevators?]
Do they know or starting to have an idea or it’s just too early for any assumption ?
they’re starting to. A number of qualitative research studies have been done, many of them focused more on the “retail” side of the Digital Signage business as opposed to the “place based” side of Digital Signage (e.g. malls, transit, etc). Each Network has been forced by the media companies and Brands over the last year to hire various research companies (Arbitron, Nielsen, TNS, Forrester, etc) to take a look at this - it’s spotty because it’s just “a network” to prove their value but I’ve amassed a lot of data from various sources that starts to paint a picture.
“Ford” may be a bad example as the brands or creative agencies haven’t really bitten on too many individual research studies themselves but categorical/segment studies have most definitely been done. (e.g. advertising “Trident” at convenience stores lifts the entire “Gum” segment 2% at convenience stores - which is really hard to do)
The real interest I’m now getting from a lot of the creative agencies (not the media agencies) is a high demand from senior creatives of understanding “what content works” and what doesn’t. Now that that interest has been identified, many of the creative agencies are starting to use similar DMAs or stores and performing A/B split ad campaigns based on creative. Unfortunately, many of these tests involve only the creative agencies and not the media agencies themselves and the learning is not being passed from those creating the content/advertisements to those buying the advertisements (media planners/buyers) & Brands. This is a healthy generalization - There’s a few media planners who are getting very active in the space and really spending the time to learn and do quantitative studies to add to the qualitative ones.
On the research side, you’ve got various approaches from companies like Video Mining and DS-IQ who, respectively, can track eye-balls on screen or sales uplift at till. Each method has it’s benefits dependant on the goal of the ad campaign - which needs to be understood long before you actually advertise
We’ll see a lot more of the tests of what works for individual brands in ‘08
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