Digital Signage Digital Advertising Networks Emerge As Valuable Addition To Media Mix

Since beginning this column last fall, I’ve attempted to point to trends, analysis and reports that gauge the development of digital signage and identify the strengths and opportunities for this emerging medium.

I’m not alone on this mission. An excellent white paper from Profitable Channels makes a strong case for digital signage networks as an effective advertising medium with the ability to compensate for deficiencies in television advertising manifested in increasingly fragmented audiences, digital video recording and its accompanying commercial zapping, and the lack of certainty in measuring audience metrics.

The white paper presents highlights of a larger in-depth report entitled Adding Out-of-Home Digital Advertising Networks to the Marketing and Media Mix by Profitable Channels partner Stephen Diorio.

The white paper makes a strong case that marketers should take digital advertising seriously. It’s in the best interest of their companies, the white paper contends, to make sure their agency partners are considering digital advertising networks as part of the marketing/media mix. Additionally, it recommends marketers should be setting aside a portion of their marketing budgets for this emerging new medium.

According to the white paper, emerging digital advertising networks offer five advantages over traditional media offerings, including:
measurable sales impact
proximity to the sale
better ways to target media
greater relevance to the product being sold
tighter integration with local selling efforts

Many marketers have begun to recognize those benefits. The white paper points out that as of August 2006, 37 of the 50 largest supermarket chains are rolling out, piloting or planning for in-store digital signage networks and that more than 4,000 big-box retail stores display in-store video advertising. Further evidence supporting that marketers see the value of digital ad networks comes in the form of budget allocation.

Referencing research from Veronis Suhler Stevenson, Carat Media and others, the document asserts that by 2011 up to $40 billion of traditional media spending will be shifted into new media. Obviously, a large portion of this will be devoted to Internet advertising and other new media, but digital advertising networks stand to benefit as well.

This reallocation of media spending reflects a shift in consumer attention away from traditional newspaper and broadcast media to the Internet and new digital media, including cell phones, video games, podcasting, and out-of-home digital advertising networks, the white paper says.

It is important to note that the report lumps cinema into the overall digital media networks category without distinguishing between commercials and still ads projected on-screen by digital projectors and digital signage in and around motion picture theaters to promote films. Equally important to understand is that the former is likely to be significantly larger than the latter at this point. Regardless, the white paper identifies the overall strength of digital advertising networks, of which digital signage is an important part, and the likelihood that they will only continue to grow.

Perhaps best of all, the white paper identifies five separate research organizations that have found consumers like digital advertising networks. All show these networks have value to, acceptance by and positive response from consumers.

If you only have time to read one report this summer, spend it reading Adding Out-of-Home Digital Advertising Networks to the Marketing and Media Mix by Stephen Diorio.