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Digital signage 101, part 2

In the second of three installments, Scala's Jeff Porter looks at current trends and offers suggestions on markets that appear to be especially lucrative.

September 11, 2005

What's new in 2005? The explosion in digital signage is happening NOW!!!

Take TESCO for example. TESCO is the U.K.'s single largest retailer. One of out every eight dollars in the U.K. retail sector are spent at a TESCO store. That's huge. TESCO is deploying a network of 12,000-plus screens in 300 locations, with seven to eight zones per store driving 40 Panasonic flat-panel displays per store. There's really no comparison of a network in the U.S. of this concentration and sophistication. PRN is the closest with their WalMart TV network. WalMart TV is in nearly nine times as many stores as TESCO (2,621 for WalMart), but the display technology is rather dated by comparison (27-inch TVs 10 feet off the floor) with the same content throughout most of the store. PRN does also provide content for the "wall of TVs" in the electronics department as well as an "interactive music sampling kiosk" to preview music and videos.

Compare this with TESCO's eight targeted areas per store (Power Aisle; Grocery; Health & Beauty; Beer, Wines & Spirits; Home Entertainment; Counters (Meat, Fish & Deli); Café; and Checkout). Each of these areas has targeted content and advertising that is updated weekly to match exactly what is on sale that day in the store. But the biggest difference is in the display technology. With 19 Panasonic plasma screens and 30 17-inch LCD screens strategically located throughout the store, you just can't miss TESCO TV. [Note: JCDecaux sells the advertising for TESCO TV, Instrumental Media Group produce and distribute the content over a Hughes satellite network with Scala software controlling the media end to end.]

Mass merchants are not the only ones jumping head first into digital signage these days. Take for example fast food giants McDonalds and Burger King. McDonalds recently installed digital menu boards in many restaurants on the east coast. Each of the pilot stores has four plasma screens that completely replace the static menu boards of old. The prices were dynamically driven and occasionally, a Big Mac would wiggle to draw your attention. Unfortunately, most of the graphics were quite static, and with plasma, burn-in was a significant problem. Worse yet, the average revenue per customer did not increase. Just because a Big Mac wiggled from time to time did not cause customers to pay more for a Big Mac or buy two Big Macs.

Contrast that with what Burger King did in Germany. In 300 stores, they replaced just ONE panel of the menu board (the middle) with a 42-inch plasma from NEC. This screen was solely used to augment the existing menu boards, and continuously looped featured menu items to drive the average revenue per customer up. Guess what? It worked. Average revenue shot up and the cost to deploy the system? A lot less than replacing all the menu boards with screens. Burn-in was not an issue here, since there was no static imagery on the screen. As an extra bonus, the CEO of Burger King GmbH was able to broadcast his personal video message to all employees using the same system before the store opened. That's an amazingly powerful tool for an amazingly small investment.

Another interesting venue for digital signage is doctors' waiting rooms. This market has a lot going for it. Number one, the pharmaceutical companies have a lot of money to spend in direct-to-consumer marketing. This is one of the few markets that I know of that can survive on pure advertising revenues alone. Secondly, the pharmaceutical companies can track exactly how many prescriptions a particular doctor writes of each drug from month to month, so it's very easy to measure the effectiveness of an ad campaign. And lastly, with as many vertical specialty markets as the medical profession has, you don't necessarily need a large number of deployments to hit critical mass for advertisers. Even a few hundred locations can be a critical mass in certain medial specialties.

Compare for a minute the cost and effectiveness of a SuperBowl ad for Nexium (with purple pills flying around the screen). AstraZenica have only recently decided to tell you what Nexium is for! In the early days, they just said "Ask your doctor if Nexium is right for you." Will you remember to ask your doctor the next time you see him? Unlikely, unless he's watching the SuperBowl with you. Now run the same campaign in the waiting room of your doctor. What's the chance that you'll actually ask your doctor about Nexium, and him write you a prescription that moment? Pretty good, I'd say. And the probability only goes higher when you are talking about a specialist - plastic surgeon, endocrinologist, OB-GYN, oncologist, dentist, even ophthalmologist or veterinarian. Consider your last trip to your eye doctor. Did you walk out with "Two pairs for $99" or was it more like $399 for designer frames with progressive lenses and prescription sunglasses? Imagine if you could get a mere five-percent lift in sales. It's not unusual to get a 20-percent lift in sales if the message is targeted to the right people at the right time.

There are many different niche markets for digital signage, where people have a need to "wait." Doctors' offices are just one. Pharmacies are another. It's too late for a prescription at this point, but there are plenty of over-the-counter medications and other healthcare products that the pharmacists would be happy to recommend while waiting for your prescription to be filled. Tire and auto centers are another. While you are in for an oil change, perhaps they can entice you to get new wiper blades, or better yet, upsell you on the 30,000 mile tune-up, or pitch you on a new set of tires. Even a small increase can have a dramatic impact on the bottom line. But what do these stores have today in their waiting areas? TV sets, right? And what's playing on the TVs? HummmÂ…

Let's imagine you are in a Dick's Sporting Goods store. Each store has a nice big video wall in the back tuned to ESPN or "the game." What are the chances that you'll have an ad on ESPN or during the game for The Sports Authority? Pretty high actually. That's a major problem for Dick's Sporting Goods unless one of the associates has his hands on the remote control to quickly switch out the those ads. If Dick's had a custom content loop playing in their store, not only would they not see competitive commercials, but they would be able to specifically promote what was on sale that week in their store, just as BestBuy does today.

The same "off the air TV" problem exists for many retail banks today. Many new banks feature TVs or plasma screens in the waiting areas tuned to CNNfn, MSNBC or BloombergTV while customers are waiting for the next available teller. What are the chances that you'll see a commercial for eLoan.com or ditech.com with a better rate on a home equity loan than your bank may offer today? Major problem. Fortunately there is a service from Bloomberg that allows you to subscribe to a customized in-bank TV channel with content from Bloomberg, but with only commercials from your bank. It's your bank. It's your customers. Don't let your competitors in.

(Click here to read part one of this series.)

ABOUT THE AUTHOR

Jeff Porter is executive vice president of Scala, Inc., supplier of software solutions for dynamic signage networks. Mr. Porter has been employed by Scala in various capacities since 1994. Scala today has over 20,000 units deployed worldwide. Scala's InfoChannel 3 software suite is an off-the-shelf solution for dynamic signage networks and is in its third generation release. Prior to Scala, Commodore International Limited employed Mr. Porter, where he was responsible for worldwide product development of the Amiga computer from 1984 to 1994. He previously worked for AT&T Bell Labs and The Eastman Kodak Company. Mr. Porter holds a Masters degree in Engineering from the University of Illinois and a BSEE from Purdue University.