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Aug 12
2008
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Why the likes of Google, CNN, ABC, NBC, CBS, and AT&T are courting Digital Signage vendors.
I love the musical “Fiddler on the Roof.” In one of the opening scenes, Tevia chants, “Tradition! Tradition!” When you actually listen to the lyrics of the song, it would be a little un-PC, especially by today’s standards, but the message is real: there are certain ways things have been done. Traditions are not necessarily the best and most efficient, but it’s the way things have always been done.
There is no exception in advertising. For years, advertisers and content distributors have utilized television as their bread and butter. Then the internet ad boom entered and revolutionized advertising, allowing for the smallest business to target and hone specific niche markets. But, surprisingly, the exorbitant TV ad-spending continued. Even with the drop in effective impressions with the introduction of media controlling DVR devices, TV ad budgets remain at the top of the charts for overall ad spending.
However, budging has occurred, especially lately. You’ll recognize the names of the companies who’re either testing out-of-home, or working on their entrance into digital signage: Google, AT&T, ABC, NBC, and CNN all fall on the list.
Rumors of “Google Billboard” and “Google Kiosk” have circulated the web for sometime now. Included in the rumors are some scratchy patent release pictures of what is to come. Apparently Google is working on a couple of projects that integrate kiosks and digital signage to allow online purchases of in-store products. It may take out the human-aided merchandising again, but it should be a perfect integration of internet, in-store, and digital signage advertising rolled into one enchilada.
AT&T
Recently AT&T announced partnerships with several out-of-home players to help distribute their own signage network.
AT&T has struck strategic agreements with ExtendMedia, Qumu and Stratacache, which are software companies that specialize in formatting and packaging content that is suitable for both business-to-business and business-to-consumer applications, such as streaming video, live and on-demand webcasting, e-learning and virtual trade shows, as well as the delivery of advertising over emerging media networks.
AT&T plans to complete deployment of nearly $70 million in network infrastructure and development investment by year-end to support its digital media capabilities across the United States and Europe (European Union countries) and Japan, Hong Kong, China and Taiwan within Asia. Over the next several months, the company will integrate the software expertise of ExtendMedia, Qumu, and Stratacache with its own capabilities to provide companies with one-stop shopping and simplified network-based solutions to encode, deliver, manage and support video and multimedia files. Businesses will also be able to combine these services with AT&T’s industry-leading security capabilities, hosting, applications and professional services to address their most pressing needs with complete and reliable solutions.
It would seem the difference between Google and AT&T is Google is a bit more tentative to come out and say, “we’re shifting the model a bit.” Although such a strategy would not be far-fetched, given recent reports of click-fraud increases in their online PPC campaigns.
ABC, NBC, CBS
Is out-of-home gobbling up TV ad revenues? Are the major networks shifting focus for a reason? In a recent press release, Walt Disney's ABC, General Electric's NBC Universal and CBS Corp. are looking at entrance into digital signage. Not surprising, given ratings decline combined with TIVO. CBS even reported an 8% increase in revenues from their out-of-home operations.
NBC held an upfront presentation to tell marketers about the many partnerships that allow the network to place ads on TV screens in supermarkets, schools, gyms, taxicabs, arenas, near gas pumps and elsewhere. The company has a series of partnerships with various out-of-home networks and even owns some of its own assets, such as a Times Square sign and a hospital network aimed at parents of newborns. Mark French, senior VP-general manager of NBC Everywhere, said more advertisers are looking to such assets as they try to develop large-scale packages with individual media companies.
It looks like “bundle” packaging to me. It seems a great way to sell large quantity advertising with a reach to multiple mediums, reaching multiple demographics. Not as niche focused or honed, but for brand awareness campaigns such bundle packaging is ideal.
CNN
Most recently, CNN has announced they’ll be testing digital signage effectiveness:
This dimensional study further justifies the investment they’re placing in our networks.”
To track out-of-home exposure, IMMI panelists are equipped with mobile phones that pick up and relay a series of audio signatures back to a central server. The company has established local panels in New York, Chicago, Los Angeles, Miami, Houston and Denver.
The CNN article cited that “ about 8 percent of all TV viewing takes place outside the home.” That’s a higher number than I would have thought. But it would justify the expenditure of testing digital signage effectiveness.
There are many contributing factors for the shift in ad focus. Perhaps the greatest reason some of the major advertising networks are looking into other forms of media is the numbers speak for themselves. Out-of-home media spending is expected to double in the next two years. That’s a good reason to break with “Tradition!”