According to some semi-recent reports digital out-of-home is set to grow to $3.7 billion by 2013. Conclusively, some have argued in favor of the advertising aspect of digital signs and digital media. These arguments have stemmed from media reps and sign hardware/software providers alike. This post will do nothing less. But while cheerleaders within the industry continue to tout and shout, it’s important to keep your head on straight. Moreover, growth figures such as those claimed in the Kelsey report are large enough that one cannot ignore the possible expansion of such an industry. But why the big shift? What is so special about digital? What are the leading reasons to choose digital over tradition? Why will this be imperative going forward?
1. The Dynamic Nature of the Beast
According to the report put out by the Kelsey Group, traditional out-of-home (TOOH) will only grow about 1% during the same period. What does this mean? We can make our assumptions, but is is evident that the dynamic nature of digital creates a much more effective tool. There are several reasons for this:
1. Dynamic changing content is much more eye-catching, mesmerizing, and sexy than traditional ooh.
2. Content can be changed on the fly, helping to target an audience, inform patrons, or provide emergency alert systems.
3. Dynamic can provide entertainment and not just information.
4. It can be interactive and engaging.
Compared to it’s grandfather TOOH, DooH has some very unique and forward-moving advantages. As a vehicle for getting news and timely information to an audience, it certainly does the job–and does it swimmingly. Remote management of digital displays allows for all the dynamic aspects that accompany a digital sign network, to be done quick, easy, and on-the-fly. Truly, digital will not be a luxury, but a necessity in the future.
2. There is Variety in the Form Factors
Digital out-of-home is a extremely broad term. It can include digital/electronic billboards, small form-factor displays (LCDs, plasmas, projectors, laser phosphor displays, and OLEDs), and any form of media which pushes a product/service on you while you are out of your home–hence the name. Of course in the case of digital display technology, we generally think of a standard 16×9 flat-panel display. However, by the time the industry predictions meet their prophetic D-day, we’ll certainly be the beneficiaries of many more sizes, shapes, aspect ratios, and mounting strategies than heretofore recognized. Think for a moment about the Christie MicroTile technology. I’m certain this will only be the beginning of the possible methods for display.
But how do technologies such as this benefit the ooh content deployer? Simple. The size, shape, and type of display means signage will literally infiltrate our outdoor lives. As this continues to take place, utilizing differing displays will not only open more avenues for deployment, but allow for venues who thought digital signage was too obnoxious to begin to embrace the possibilities of information display via digital. This expansion will further open the doors for more ooh advertising. And the vicious cycle rolls on…
When we speak of scalability, we often think of it in terms of operations. We can generally think of it in the following way. Scalability: The ability for a business or technology to accept increased volume without impacting the contribution margin (Contribution margin= revenue – variable costs). In other words, when we’re speaking of digital ooh, we can think of it in terms of getting the message across. Once the digital infrastructure is in place, then getting the message to 50, nay! 10,000,000 sites is done with the push of a button (that is if you’ve got a big enough pipe–that’s another issue delving into a completely different aspect of scalability which we’ll not address here). In any event, digital allows you to scale (or, benefit from decreasing variable costs and increasing contribution margins).
4. Ease and Accessibility
Similar to scalability, ease of use and accessibility are also factors contributing to the necessary expanse and use of digital out-of-home media. As sign software continues to improve and become more readily available to the layperson, the use of said software will not only become more prevalent, but it will become necessary. Why? You might ask. I can compare it to a fax machine. If the world only contained one fax machine, it would be pretty worthless. But, when nearly every office in the world is utilizing a fax machine, it becomes as necessary as toilet paper. The more accessible the technology becomes, the greater the need to jump on board and operate your own.
The dynamic nature of digital signs also increases the ability for honed information dissemination–a term I like to refer to as “targetability.” One of the big reasons digital has been and will continue to replace traditional is because day-parting allows content managers to display messages when and where the specific crowds might pass. In short, digital can be used in a more targeted fashion. Let’s take the example of a mall digital signage network. In such a setting very different groups of people parade around, looking at the wares on Tuesday evening than do Saturday morning. That just a fact. The benefits of using digital media to target these
In addition, the increase in the prevalence of audience measurement devices for digital signage means the “targetability” will continue to grow. Such devices allow for some of the greatest advertising targeting imaginable–with the exception of online searches. Devices that track eyes, determine gender, and estimate age can offer very unique targeting when attempting to reach an audience of a particular kind. Devices such as these also can determine whether the passing crowds are actually viewing the displays. While this all may sound a bit “big brother”ish, it’s certainly an excellent method for further targeting an audience–something which TOOH cannot DOOH 🙂
6. “Digital” is Becoming Expected
It was Charles Kettering who once said, “High Achievement always takes place in the framework of high expectation.” Similarly, but somewhat dichotomously, the German psychoanalyst Fritz Perls has been quoted as saying: “I am not in this world to live up to other people’s expectations, nor do I feel the world must live up to mine.” It’s like a Pavlovian Response to something you expect, but never comes. If 90% of the restaurants I frequent are running digital menu boards in restaurants, then when I walk into a restaurant without them, I may feel a bit unsatisfied. It’s like having dessert after most of my meals and then not receiving it when it’s expected. I’m sure there are a whole slew of terrible examples that could be used here, but you get the idea. When something reaches the mainstream, it begins to be expected. Those who do not live up to the expectations will certainly be behind the competition–in more ways than one. This will be discussed in further detail below.
7. Your Competition Will Be Using DOOH
Not that competing businesses are the absolute reason one would do anything, it is certainly important to pay attention to how a competitor is reacting to a particular semi-new development. In this same vein, I read an interesting article a while back which stated the following about the way you may treat the competition:
Putting too much effort into competing is also an extraordinarily destructive force for a small business owner. Not only are you wasting energy and resources trying to make yourself look better by making someone else look worse, you are also closing yourself off to the opportunity to collaborate. Resources are scarce, even if you combine every small company that you call your competition into one, you would all still only represent a tiny fraction of a tiny fraction of the larger market. With so much going against everyone, you should not waste time sniping at each other, you should be spending your time looking for places where your business and your closest neighbors complement each other, and trying to find ways to use that to grow the industry at large.
Competition is a necessary evil and if you are really lucky you may one day grow a business that is sufficiently massive that you need to start worrying about it. Until then, understand that every second you spend competing is a second that could have been used doing something productive.
This, of course, would beg the question, “why worry about what the competition is doing if I am not to worry about the competition?” This is somewhat perplexing. Let’s take a look at where digital signage fits into the picture here. When it comes to digital media, you are not necessarily in competition with other competing companies as a digital media company, but you are in competition for customers–and customers are often driven by increased ambiance. I worked with a client a while back who was installing some unique digital screens in convenience stores. These babies were themed, depending on which store you were to enter. Interestingly, the company not only saw a prudent sales lift, but they were also the beneficiaries of more return traffic due to the mini jumbo-tron/basketball experience they had created in the store. In this case, the nearby competition followed suit. It was interesting to watch. It was a “but the Jones family has it…”
Technology will continue to change the way we do signs–regardless of whether you are traditional or digital. In the case of digital, technology seems to have the industry by the proverbial short hairs–giving the industry little time to keep up with new developments. As digital OOH grows, we will also see a shift in what types of DooH are being used in media advertising purchases. Certainly the technology will play a role in what will be the most effective methodology here. Most importantly, those wishing to survive will need to implement some digital signage in their marketing mix. It’s a DooH or Die scenario.