Digital Signage at Retail: Developments in an Expanding Universe

Terry Debono, President, MxN Media Group
Presented to the CARF Workshop - Effectiveness of High-Tech In-Store Media – May 21, 2008

According to Terry Debono, digital signage is an evolution of traditional broadcast, speciality channels and private networks. The advantage of digital signage over other types of media is its ability to focus a message down to a specific location, for a specific product, for a specific length of time. For the retailer, this has enabled an integration of POS advertising with inventory management – for example when an individual store puts on sale a product with excess inventory using digital signage as the advertising medium.

Advertisers have always searched for a medium that can deliver the message as closely as possible to the point of purchase and digital signage can do exactly that. Recent research initiatives, such as that developed by the Point Of Purchase Advertising Institute (POPAI ), indicate that the medium is not only cost efficient but can be highly effective when used correctly. POPAI data indicates that in-store advertising can increase sales in convenience stores from 5% to13%, lift sales by up to 6.5% in drug stores, and help achieve up to a 4-times increase in sales lift when digital signage is part of a promotional program.

Another initiative being developed by Nielsen and the In-Store Marketing Institute called PRISM is developing research to help ensure the efficiency of digital signage through research techniques that help advertisers evaluate the medium in familiar, traditional media terms – the measurement of “opportunities to see” based on in-stores traffic and the type and location of the in-store media. The research ultimately will lead to the development of in-store GRPs and the ability to measure the ROI of the medium. PRISM also is working with new to techniques to measure in-store media audience size using sophisticated face-recognition devices to identify which shoppers are actually looking at the screen, and RFID and mobile GPS methods to identify traffic patterns through the store.

Mr. Debono said there are two types of digital networks.

• Awareness Based Networks – which provide information and advertising to consumers at malls and concourses, and in elevators and on trains.

• Action Based Networks – “call to action,” sales-lift advertising to shoppers that typically run in the retail location such as grocery stores, convenience stores, and retail chains.

To use the action based networks most effectively, Mr. Debono says that the marketer should use a form of behavioural targeting and realize that store visitation behaviour can be an accurate indicator of product purchase intent. This involves applying metrics to measure and assess what shoppers do when the visit a store, such as the type of data now being collected by PRISM. The PRISM data will hep identify what shoppers do before and after exposure to a digital sign, help find the time period between ad exposure and response to the message, and help identify what type of message works best. An important creative factor involves the length of the advertising message. Debono says that in-store ads work best when their duration is targeted to the wait time, or the linger time, of the audience. This may be measured in terms of only seconds when the shopper is browsing store aisles or longer times when the shopper is in the checkout lane.

Even more sophisticated approaches to in-store advertising is under development using cell phones as the medium to allow shoppers to interact with advertisers while they are in the store itself. For example, an ad runs on a digital screen informing the shopper that if he sends a text message to a certain address, he will immediately receive a “coupon” that enables him to participate in a 2-for-1 offer. Other mobile coupon techniques allow a shopper to store coupons on his cell phone and simply show the picture of the coupon to the cashier to receive the benefit.

The use of digital in-store signage is rapidly becoming a planned medium for marketers and is one of the fastest-growing advertising segments. Debono reports that in 2001, an estimated $600,000 ($US) was spent on in-store digital media. In 2006, this is estimated to be $1.7 billion and by 2011 is expected to grow to $5.8 billion.

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1. POPAI – Point of Purchase Advertising Institute. See http://www.popai.com and especially the activity of the digital signage group at www.popai.com/Content/NavigationMenu2/Membership/DigitalSignageGroup/DigitalLibrary/defaul5.htm.
2. PRISM – Pioneering Research for an In Store Metric. This is an initiative of the In-Store Marketing Institute and Nielsen. See http://www.instoremarketinginstitute.org/article/analyzing-PRISM-datafor an example