Innovus Infocast

Las Vegas - digital signage capital of the world

I've been in Las Vegas for the past couple of days attending the GlobalShop conference, taking meetings and looking around for what's new and interesting in retail.

At the show, digital signage technology is demonstrating that it is maturing - there were few big new innovations that I discovered, but it is clear that there are now 15-20 major software companies that have robust, powerful and stable applications - and can show real-life installs to prove it. As well, plasma is becoming harder and harder to find as LCD screens are now available in larger sizes - up to at least 60“, with bigger ones on the way.

Content, on the other hand, is still a mystery to many players. More on that in an upcoming entry.

Wandering around the Strip, it is clear that the latest and greatest in digital signage technology is on display here. Speaking with many of the media player and software vendors, the biggest 'whales' (to use Vegas terminology) are the gaming companies - from the biggest LED spectaculars along the Strip to some really cool installs inside - cost appears to be no object to these image conscious venues.

Notes from Las Vegas

It's 7:30AM, and I'm on my way to Starbucks for a coffee before my first GlobalShop conference session this morning. I'm passing by a high stakes poker table with a $500 minimum. There stands a guy, all alone with his dealer, wearing sweatpants, sandals with athletic socks and sporting a mullet haircut, betting $750 a hand. Surreal.

Digital Signage for Venues and Public Spaces - report from the conference in Washington, DC

We just returned from the Digital Signage for Venues and Public Spaces conference in Washington DC. I attended with Justin Young, the Managing Director of Gottschalk+Ash, our sister company and one of the world's leading design firms in the area of branding and wayfinding for public spaces. A small but interesting and attentive group of attendees - pretty good turnout for the first digital signage conference held for this specific audience.

First - kudos to the Strategy Institute for putting together a good first effort for a conference to this audience. As is typical, some speakers offered considerably more value than others, but all-in-all we were satisfied with the content provided and the contacts made. The Strategy Institute has clearly staked out their leadership position in conferences for the digital signage industry.

As I attend more industry events and continue our extensive research into developments in the field, a few themes are becoming increasingly obvious. The first is below - the second I'll post separately tomorrow.

End users (retailers, venues and public spaces) are moving up the food chain for digital signage leadership.

Three years ago, in the prehistoric age of digital signage installations, end users turned to the names they knew for digital signage advice - typically the manufacturers of the screens/hardware. Sony. Sharp. Samsung. These companies had the financial resources and the brand credibility to put salespeople into the boardrooms of potential owners of digital signage installations. What quickly became clear was that plasma or LCD screens did not a signage network make. It was like going to Gateway Computers to have them install a global ERP solution.

Next were the software companies. These firms were able to explain to end users how content was going to reliably travel from a server in Atlanta to a 42" plasma screen in Mt. Vernon, Illinois - a major initial concern to retailers. Convergent. EK3. Scala. All firms grounded in software and engineering, and presenting themselves as 'turn key, full service' solution providers. But now, as digital signage software is commoditizing (most software now does an able job of delivering high resolution content to a screen anywhere in the world), end users are realizing that they have hundreds of screens and thousands of programming hours. Content for the networks has largely been an afterthought - "we'll fill it with advertising and stuff from vendors" has been the typical content strategy. It was kind of like the editor-in-chief of the New York Times being mostly concerned about the quality of newsprint and the colour of the trucks that dropped off the papers at the newsstands in the mornings.

Now, content providers are increasingly taking a leadership role. The technical ability to install appropriate hardware and distribute content via the internet are now basic requirements, and able to be fulfilled by any one or through a combination of many, many competent organizations. Content providers are adding value by focusing on the importance of what was on the screens instead of how it got there. Unfortunately, advise from content providers is still largely tactical in nature, and the final connection between business strategy and in-store consumer communication has net yet been consummated.

There is still one more stop on this journey. C-suite executives in major retailers and operators of public spaces are realizing that the power of digital signage to communicate with their customers or users while they are in their stores or venues is a strategic rather than a tactical asset, with benefits that reach far beyond incremental revenue opportunities from third party advertising. And the ability to fully integrate digital signage into strategic plans is starting to fall to consulting firms - firms with not only broad knowledge of the digital signage industry, but with real world expertise in assisting retailers and venue operators with driving customer and shareholder value through the strategic planning and implementation process.

Increasingly, thought leadership is trumping tactical executional expertise. It's time.

The telegram RIP.

I've always been fascinated by the way in which technology is constantly changing the way in which we interact with our environments, our friends and family, our workplaces.

The catalyst of this post was reading in the WSJ over the weekend that the world's final telegram was sent last week, after 150 years of history. In 2005, only 20,000 telegrams were sent via Western Union globally.

What is today commonplace was unheard of even 20 years ago. I don't consider myself to be (very) old, yet I can still remember the first fax machine, the first laptop, my first email address (it was a bunch of numbers separated by a comma @compuserve.com, I think).

I still remember my elder daughter coming home from school one afternoon several years ago and questioning "what was the that big black CD that my teacher used today?", of course referring to a vinyl LP. And my younger daughter may only vaguely remember CD's in a few years. To her music is digital files that she downloads from the internet - to her phone, future generation iPod, or $100 laptop. She'll have music Bluetooth-beamed from friends, or from other media sources we haven't even imagined yet.

Canadian recording artists The Barenaked Ladies recently released a new album not only on a CD and through the iTunes store, but as digital files on a USB flash memory drive with additional exclusive content and videos.

Constantly changing technology is also going to completely change the way customers interact with retail stores. And digital signage is only the thin edge of the wedge.

When we at DW+P are making presentations, we often speak to the changing way in which people consume media now vs. ten years ago. Today's consumers now have a considerable amount of control over how they receive content - and increasingly they are using this control to avoid having content (of any type, including commercial messaging) 'pushed' at them. They are now able to 'pull' only that content that is relevant to them, at a time they choose, on a device they choose. They watch the latest episode of American Idol on their iPod on the subway. They set up tonight's dinner via SMS messaging on their telephone. And they never watch network television in real time.

These consumers are going to insist on our improving their shopping experience by using new technologies to make shopping easier (wayfinding, for example) or delivering relevant information to them when they want it.

RFID tags that know what garment the shopper has in her hand, and suggests complementary items on a nearby LCD monitor. Smart cameras attached to displays that will identify the sex, age and even size of a shopper, and show appropriate products. Smart shopping carts that allow shoppers to upload their grocery list from their PDA and show them where in the store to find the listed items are already here.

The DW+P prediction? It is only a matter of time before static wayfinding signage and directories; and promotional marketing material that is shipped to retail stores; become the next telegrams.

Quaint technologies, whose time has clearly past.

Written at: DW+P offices, Toronto

Viewers "extremely receptive" to in-store video

On January 26th Arbitron released a report on consumer attitudes to in-store video. Entitled "Consumer Interest and Acceptance of Video Displays in Retail Environments", it draws a number of positive conclusions with regard to customer receptivity to in-store television.

Clicking here will take you to the full report from aka.tv, but the short version is:

One in three Americans have watched in-store video (considering practically that number of Americans go to Wal-Mart every week, this isn't really surprising).

One in ten shoppers make a habit of watching retail video.

More than three quarters of retail video viewers find the screens helpful.

More than half of retail video viewers think that more stores should install video displays.

Given the choice, 42% of retail video viewers would prefer to shop at atore that has video displays vs. one without.

While these numbers aren't as staggering supportive of in-store video installations as Arbitron would like us to believe, they are still good news considering that the majority of Americans have only been exposed to in-store video at this point in the visually cluttered Wal-Mart TV environment, and with the Wal-Mart advertising driven content model. I'm actually surprised that it tested as well as it did.

Thanks to aka.tv for this information.

Don Watt joins the Canadian Marketing Hall of Legends

Don Watt, our CEO, was honoured by the Canadian marketing community on Thursday evening when he was inducted as an Enabler into the Marketing Hall of Legends.

This is the most prestigious award a marketer can receive in Canada, and he was feted with other Canadian marketing luminaries like James Balsillie and Mike Lazardis from RIM Research in Motion; John Cassaday from Corus Entertainment and the former head of CTV; and retail icons Ed Mirvish and Harry Rosen.

John Cassaday during his remarks publicly thanked Don for his work in the mid-90's in redesigning the set for the CTV National News, and many others dropped by the table through the evening to personally congratulate him for the award and thank him for the influence, either direct or indirect, that he has had on their careers.

More info on Don and the MHOL can be viewed here.

Don, all of us at DW+Partners are proud of you.

Advertising agencies still don't get it.

Day one of the Strategy Institute conference in Las Vegas on Digital Signage Content Strategy was pretty mundane, with a couple of exceptions.

I enjoyed the presentation by Mark Stojack and the team from the Chicago office of Draft Worldwide on "Your Advertising Agency's Role in the Content Creation Process".

In my experience, ad agencies have had three big hurdles to overcome when it comes to creation of digital signage content:

1) Most have cultures and infrastructures built around creating complex, expensive, full motion television commercials with the intent of winning Clio Awards in May instead of driving retail sales in January. There are exceptions. I'll mention them in a minute.

2) This media bias is not exclusive to the creative departments - their 'unbundled' media buying agencies have no idea what to do with digital signage. Broadcast buyer? OOH buyer? Promotional media buyer? New media/internet buyer? Who knows?

3) And finally, big agencies think with big dollars. Digital signage content needs to be constantly refreshed. And a digital signage network runs 12 hours a day or more, 7 days a week. That's a lot of content to create. Budgets need to be in the hundreds or low thousands of dollars per minute of programming. Not in the 10's or even 100's of thousands of dollars per minute.

I admit, Draft had me this afternoon. Their creative was simple, created in Flash, and made effective use of motion while still conveying simple item/price information. They got it. Until they talked about the cost of content creative. And that's when I realized that ad agencies still don't get it. I've run the hard numbers on several digital signage network installations in the past six months, and I can't make them work based on the pricing the agencies want for creative.

The agencies rationalize the negative ROI by suggesting that incremental value in 'soft' areas like branding, awareness and improved customer service need to be considered. At DW+Partners, we say that a positive ROI and the above soft benefits needn't be mutually exclusive. We can deliver it all, and retailers should expect no less.

You know who else seems to get it? MarketForward in Chicago - a division of Publicis that is built around the application of emerging technologies to marketing problems. Media neutral = good solutions.

Other selected quotes from the day:

"Content is the key to measurable results."
Joe Finizio, POPAI

"Content is not just about the art of creativity. It's about creativity to drive business results. It is also a science."
Lyle Bunn, BTV+

"Ads are like alcohol - the more you have the less you remember."
Rebecca Walt, Convergent Technologies

"What digital signage does best is bring movement to merchandising."
Pat Hellberg, Nike

Written at: The Venetian Hotel, Las Vegas

Thoughts in an airport lounge

Here I sit, early on a Sunday morning, waiting for my flight to Las Vegas to attend a Strategy Institute conference on digital signage content strategy. I'm quite looking forward to the sessions, and to my dinner plans tomorrow evening with Stephen Platt of the Platt Retail Institute, a thought leader and friend I've made in this consulting area.

A few things come to mind - one is the continued chasm between two opposed schools of thought regarding what should be played on digital signage networks. There are those building digital signage networks based on a broadcast television model for content and advertising sales strategies. Longer, full motion ads (basically edits of existing television creative) drives the content strategy, and selling advertising to third parties (consumer impressions as typically measured by cost per thousand or CPM) are the heart of their revenue model. PRN's Wal-Mart TV is clearly the leader of this business model, but there are others.

However, there is a school of thought emerging regarding a different content strategy and revenue model. Those of us who feel that a new business model must be considered are starting to gain traction among the industry, and we have the consumer on our side. Mary Shopper has told us she doesn't really want to watch 30 second television spots in her Wal-Mart store. In the best case scenario she ignores it, or in the worst case she resents the intrusion into her already cluttered and stressful shopping environment.

This more evolved business model centres around looking at opportunities not only from the standpoint of incremental revenue through 'advertising sales', but more importantly at the role that digital signage plays in enhancing the customer experience, and in influencing customers purchase decisions while they are in the store. Digital signage can effectively build the value of the store brand, move shoppers into more profitable (higher margin) private label offerings in major categories, or to cajole them into making purchases in categories that they weren't planning on shopping that day.

You see, to us digital signage is just that - a high involvement and much more fun and involving replacement for the static cardboard signage that have hung in stores for 100 years.

The battle is being waged between two groups of advisers that today's retailers turn to for advice. The first, advertising agencies, promotes the broadcast model like Wal-Mart TV. And why not? Their entire business is built around and staffed for producing 30 second full motion ads for television, and they in turn rely on research companies like Arbitron and Neilsen that build their business testing 30 second full motion ads for television. Content costs? Many, many thousands of dollars per minute.

The new business model is being promoted by retail management consultants who generally can take a broader, more holistic approach to retailer issues, and who don't have a huge infrastructure investment in 'making traditional ads'. Content for the new business model? Certainly some clips from existing television/full motion ads, but lots of simple, bright, short (3-7 second) Flash-driven billboards reinforcing brand messaging or in-store promotional opportunities. Content costs? A few hundred dollars per minute.

It will be interesting to see at this conference which school of thought regarding content strategy wins. I'll report throughout the conference as industry leaders debate this and other issues.

Written at: 28,000 feet in a Northwest CRJ on the way to Minneapolis/St. Paul.