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.
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