Editor's note: The following article is based on market research by MultiMedia Intelligence. You can find information on the full report here.
Hundreds of billions of dollars are spent yearly on advertising in all its forms. TV from the not too distant past was the best ROI for pretty much any product you wanted to promote. It is also the lion's share of the total available market in marketing budgets. Problem is, it's a different world now -- budgets are getting cut and technology has brought both pleasure and pain. This is both good and bad because of the vast array of media from which a marketing professional can select. There are only so many slices in the pie, and ROI has become elusive.
For TV, a typical 30-second spot (depending on the program and time) can carry a very high price tag. For example, "American Idol" can command $750,000 for a 30-second spot. A show with a cult following like "24" can command $400,000 per 30-second spot.
The Fox show "24" is an easy way to look at this issue. Let's say "24" is really only 16 hours of action per season. That means that eight hours per season is up for commercial time slots and PSAs. This makes it easy math -- if a marketer wants to run a 30-second spot once per episode and there are 24 episodes, that could cost an advertiser $9.6 million (plus or minus the negotiated rate). For companies like Ford, GM or Procter & Gamble, that's probably not too big a deal in the grand scheme of things. But this is not necessarily the case for everyone. That's big money to pay when personal video recorders have hit almost 30 percent of the set-top boxes in American homes alone. Those houses aren't watching commercials; they are time shifting. In simple terms, they are fast-forwarding right past that $400,000 commercial -- and pretty much most of the other 30-second spots. (The exceptions -- sex and movie trailers -- still get rewound, though.)
With the current economic conditions, these Goliaths of the industry are in bad shape. Part of that condition is because those above-listed companies have already paid for this time in the upfronts. Yet, most marketers can't afford this anymore, and they are looking for alternatives. The internet is being exploited for its economies, but this channel is feeling the pain as well. Google and Yahoo have both dropped their forecasts on ad revenue, and Yahoo has already announced that it will cut at least 10 percent, or 1500 employees, of its workforce.
Where to turn
Digital signage is an alternative that has done a lot of growing up. Though it has been around for decades, its lack of standards, and significant fragmentation in the market made its solutions costly and extremely labor-intensive. That is no longer the case. It is becoming a medium that is versatile, and it can not only save you money but also do a better job promoting your product.
Networked digital signage comes in many forms, from outdoor venues that are very visible like those seen in sports arenas to small displays located in various locations such as lounges, waiting rooms and even your local gas station. These displays can show static images, video and graphics; can play audio; and can be configured horizontally or vertically or segmented into quadrants for multiple images/videos on one display. More exotic units can actually dispense perfumes or fragrances while using sophisticated analytics to determine consumers' gender, age, level of interest or even traffic flow patterns. This means they will become part of the security and surveillance equation moving forward. These displays can be placed out of reach or can be in an area for full interactivity with the viewing audience using touch screens.
Another advantage of these marketing tools is that they are now capable of integrating other technologies, such as near-field communication and RFID, either passively or actively. They can engage and work with most mobile devices, using 3G and soon 4G. Wi-Fi and WiMAX are making deployment of digital signage even more cost effective. System integration and intuitive tools are key to these new venues.
In the past, a tool of this caliber was cost prohibitive and, to be frank, not that sexy. Yet, with networked digital signage, if designed, implemented and managed correctly, the total cost of ownership can be configured as a profit center for the owner of the network, and the total cost of ownership can be realized quickly. Location, time and prime real estate is up for sale on these networks.
For the marketing professional representing a large client, these networks are alternatives that can show significant ROI and are being deployed. On larger networks, the messaging can be managed from East Coast to West Coast. Marketing professionals can schedule ads based on specs they define -- time of day, week, frequency, etc. -- thanks to better analytic tools and controls that are available to marketers online.
The best advantage of this type of marketing tool is that potential customers viewing advertisements on the display are more likely to act because they are located where these customers are already shopping. Even for those that aren't actively shopping, they can view digital signage displays in an environment that is conducive for them to be influenced for future purchases. This impulse shopping has been proven by placing displays in areas where people gather or are standing in lines, such as a bank, the post office or DMV. Giving a captive audience displays to look at is a goldmine and conducive to that very thing marketers want -- a call to action that produces a purchase.
These displays are more than just advertising tools, as they add value to the viewer by providing information, ambient lighting, directions and other value-added content to enhance the shopping experience. Multiplatform features become compelling as mobility, location-based services, IP surveillance and informational services are integrated.
So if you have a couple of bucks to spend to get your message out, consider networked digital signage , a low-cost and a powerful marketing alternative.
Rick Sizemore is chief strategy and business development officer at MultiMedia Intelligence.
