DIGITAL OUT-OF-HOME DISPLAY ADVERTISING PREDICTIONS AND TRENDS FOR 2010

01/31/2010

DIGITAL OUT-OF-HOME DISPLAY ADVERTISING PREDICTIONS AND TRENDS FOR 2010

The New Year is always a good time for lists, predictions, and lists of predictions, and there are some interesting forecasts for the digital out-of-home business in 2010 from Keith Kelsen, founder of the 5th Screen Project and a contributor to Digital Signage Today. The trade publication recently posted a list of ten predictions by MediaTile's Kelsen for 2010 -- which also double as advice to DO networks and advertisers, pointing to high-priority action items to enable the medium's strong growth to continue.

Below is a quick summary of Kelsen's predictions, the full text of which can be found on the Digital Signage Today Web site.

1. Content will continue to be the No. 1 trend - As always, the most important part of any strategy remains the most difficult. According to Kelsen, DO companies really only began addressing content seriously in 2009. Kelsen sees more custom content created especially for DO networks, but at the same time more "continuity" between this content and content delivered via other channels like cinema, TV, PC and mobile.

2. Experience, engagement and interaction - Citing Gesturetek's new CUBE and new multitouch monitors, Kelsen said direct physical interfaces are definitely showing promise -- but added that mobile-enabled interaction will be the most important area for DO. Kelsen pointed to three areas of particular promise for mobile interactivity, taking advantage of location awareness to deliver extra-relevant messages: "Point of Sale Networks, Point of Transit Networks, and Point of Wait Networks." In addition to allowing engagement and user-generated content, mobile is also key to better audience measurement.

3. Strategic sensibility - While it may seem obvious, having a comprehensive strategy grounded in precise market data will make the difference between success and failure for new and established DO networks in 2010. Kelsen summarized this point best himself: "Considering how the particular digital signage network will interact with other types of communication between an organization and its target audience, a marketer can help ensure that the work of digital signage reinforces business goals, sales campaigns or other objectives."

4. Measurement and acceptance - Audience measurement has been the focus of intense activity in the DO business over the last couple years, centering on a major initiative from the Out-of-home Video Advertising Bureau to formulate guidelines for a common metric. Many DO networks are now producing measurement data in accordance with these guidelines, combined with a variety of custom studies and extra data to distinguish themselves from competitors; here Kelsen credited aggregators like SeeSaw and Adcentricity for leading the charge. But the measurement landscape is still evolving: Kelsen pointed to pioneers like DSIQ, which has created a sophisticated retail analytics system first deployed for Wal-Mart's in-store media, and Cognovision, which incorporated facial recognition software into DO measurement.

5. Software improvements in delivery of messages and ads - One of the main hurdles to successful DO campaigns is simply delivering the content to screens to reach the right audience with the right message, at the right time. Kelsen sees more use of rule-based software and intelligent, dynamic delivery of ads in 2010, with advertisers using online interfaces to plan and execute campaigns (often payment, confirmation and billing are handled through the same channels). But Kelsen warns of potential conflict with agencies, who may feel threatened with disintermediation. On the other hand, some DO networks and aggregators have positioned their online campaign planning interfaces as services to assist media buyers in their work for clients.

6. Progress in content standards - A mostly technical issue relating to digital video format and delivery. Kelsen predicts more uniformity across networks in 2010, making it easier for advertisers to achieve greater scale and reach, boosting ad spend.

7. We will hit the 'tipping point' in 2010 - Kelsen's most general prediction is also the most encouraging: DO will "arrive" in 2010, becoming a force to be reckoned with in terms of share of ad spending. Kelsen cited developments in 2009 that foreshadow a 2010 boom. These include high growth despite the bad economy, including higher ad revenues; strategic M&A that positioned networks for even more growth; increasing membership in industry organizations and attendance at industry events, which disseminate information about DO to advertisers, leading to greater agency acceptance; and the wide acceptance of the new OVAB measurement guidelines.

8. Large-scale 2010 projects will be at an all-time high - In keeping with #7, Kelsen sees a big increase in scale, in recognition of the fact that " DOOH is getting its head on straight about what works and what doesn't."

9. More mergers and acquisitions and more investment in the space - Another continuation of the trends identified in #7, Kelsen's prediction of increased M&A activity jibes with other recent forecasts citing the increased availability of credit for funding. However, Kelsen cautions,"The funds for this media growth are going to be divided between mobile and digital signage as these two new mediums battle for attention.

10. Growth in ad-based networks and shift in ad dollars - Also in keeping with some recent analyst forecasts (and boasts from DO networks), Kelsen expects to see a substantial amount of advertising spending shift from other media. Though Kelsen didn't name names, the most frequently mentioned target has been broadcast TV.

COMMENTARY: Having consulted for a startup OOH digital display advertising network client, I have been waiting for the Out-of-Home Video Advertising Bureau (OVAB), to establish Audience Metric Guidelines. Admittedly, I have not tracked OOH digital advertising as much as I would like, and am pleased that the OVAB finally established audience metrice guidelines.

Because of the wide diversity and transitory nature of the viewing audiences, it is difficult to treat OOH advertising audience measurement like you would network television or TV cable. With OOH display advertising, the audience will vary depending on the venue (hotels, shopping malls, retail stores, movie theatres, airports, banks, etc.) where the digital displays are located. The number of eyeballs or impressions will vary from one location to the next within the digital display advertising network.

There are several variables that have a bearing on audience measurement: type of venue, venue traffic, number of displays in the network, time of day displays are on or off, peak and non-peak dayparts, location of the displays, time each consumer views the display ad, and other variables.

I am naturally pleased that the OVAB finally established these audience measurement metrics, which I have yet to read and analyze. These new audience metrice guidelines would've helped tremendously back in 2008.

For those of you interested in downloading a copy of the new OVAB Audience Metrics Guidelines click here.

Courtesy of an article dated January 8, 2010 appearing in MediaPost Publications Digital Outsider blog

Posted at 03:10 PM | Permalink