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Calculating Digital Signage ROI: Methods to Gather your Data

Author: Bill Gerba on 2005-04-15 08:19:19

Up until this point, I've talked about what to do with your viewership statistics and other marketing data once you have it.  But what many people - especially many coming into the marketing world from a tech or sales background - fail to realize is that actually obtaining the data and making sure that it is valid is the hardest part of the whole routine.  If marketers had an easy, consistent way of getting 100% accurate feedback from consumers, there probably wouldn't be any digital signage industry to speak of, since all products would be perfectly targeted to the end user, and the end user would know exactly which ones were made for them.  But consumer feedback is far from perfect, so digital signage displays serve a large role in educating and persuading customers to consider and hopefully purchase a given product

In fact, not only is it hard to get data out of your customers, but it's also hard (or perhaps even harder) to get meaningful information out of your partners, suppliers and vendors.  So what can you, the digital signage network owner, do to collect data that can be used to calculate your network's ROI?  I certainly don't have all of the answers, but what I have done is put together a list of some of the techniques that our customers have successfully employed in the past.  I've grouped the different techniques into five categories based on who has to do the most work (besides you, of course), to get the data.

Method 1: Go to the store (network/site owner)
If you work for the retail store or chain running the signage network, this is probably the option for you.  Using your own sales and traffic data, especially when you have a control site (or even better, an entire control market) to compare against is going to give you the most accurate and reliable ROI results.  There are a number of good data sources that your retailer can provide, including:    

• Co-op Marketing Data - Many retailers have a cooperative marketing program that vendors are encouraged or required to participate in.  In these situations, the vendors pay a monthly or annual fee to be included in the retailer's various promotional materials - things like circulars, POP displays, and the like.  The upside for you, the signage network owner, is that if your digital signage network can be added to the retailer's line card for in-store advertising options, you will likely be able to gain access to the marketing data that the retailer must provide to advertisers for compliance purposes.  This data typically includes things like historical traffic flow accounts, performance comparisons between stores in different markets, and average tickets (purchase amounts) during different in-store campaigns.  Bottom line: if you can get your digital signage network included in a retailer's co-op program, DO IT!!!
    
• Affinity Program Data - Most retailers today have some way of keeping track of customer purchases, at least on a high level.  One of the most common ways to do this is through an affinity program, where in exchange for giving up some personal information customers are rewarded with discounts on products that they are likely to purchase.  While the behaviors of affinity program shoppers are not necessarily the same as those of regular shoppers, most established retailers have correlated trends between the two groups, and are able to predict (with a reasonable degree of accuracy) the actions of one group based on the observed actions of the other.  Some retailers are more open about their affinity program data than their sales data, and if you can get this information as well as the correlating statistics to explain how the actions of affinity and non-affinity customers are related, that's almost as good as getting actual sales data.  Some retailers even use 3rd party services like GreenPoints to handle their programs, which might be another sign of openness.
    
• Register and Inventory Feed Data - This is the mother lode for data miners, and by far the toughest nut to crack.  Getting access to your retailer's raw sales logs, either register receipts or inventory tracking data, gives you the most accurate picture of what is being bought and sold in each store, and, consequently, can be used to make extremely accurate ROI predictions (provided you have the proper control cases to compare against, of course).  Unfortunately I don't have any magical advice for convincing your retailer to give you access to their sales data.  One thing that I can recommend is bringing it up before you sign a long-term contract to provide digital signage systems, though.  If you spend hundreds of man-hours and millions of dollars to roll out a state-of-the-art digital signage network only to find that you have no way of tracking what your ads are worth, you're going to be in a world of trouble.  If your retailer won't agree to provide you with any sensitive data, perhaps you can turn the table, and have them calculate the metrics based on ad sales data that you provide.  If the motivation is right (e.g. selling more product, improving margins, etc.), your retailer may well do some extra legwork to extract the maximum benefit from your network while still keeping their numbers close to the vest.

So what can you do if you don't work for the store in question, but you want to have access to their data?  Well, that's going to be very case-specific.  For example, if you're Wal-Mart... no, that's not a good example.  If you're Wal-Mart, you own a big chunk of your digital signage provider (PRN), and you've probably taken care of these problems already since you're dealing with such a massive amount of capital.

In reality, regardless of size, retailers take their sales numbers very seriously, and often treat them as trade secrets, so you'll have a hard time getting at them.  In the best case, expect to sign a series of non-disclosure and non-compete agreements that dictate what you are and aren't allowed to do with the data.  If you own one retail network and do not aspire to own others, or if you own other networks in non-competing vertical markets, you're going to have an easier time getting your retailer to open up than if you're running networks that directly compete with them.

Method 2: Go to the seller (vendors/product manufacturers, advertisers)
If you can't gain access to your retailer's sales information, or if you're running a network that spans multiple heterogeneous locations where there isn't a good way to collect sales data, there is another option: try to get access to sales data from the advertisers and product manufacturers themselves.  While smaller manufacturers will probably be more willing to share their information (and they'll probably have a better handle on actual sales volumes to each of your locations), larger manufacturers often have some kind of co-marketing program that will provide you with benchmark numbers each week or month.  Similar to the situation with getting information from your retailers, if you're selling ad space to multiple competing vendors, they may be more reluctant to share their data than if each of your ad spots comes from a noncompeting company.  I'm not suggesting that selling your space one way is better than the other, but it is something to keep in mind.  If your advertisers and manufacturers remain hesitant, you can try the same trick that I mention above where they do the work of calculating any sales lift from the signage network and supply that back to you.  You would still have to do the work of compiling the data from all of your manufacturers back into some kind of master ROI chart, of course.

Method 3: Get feedback (kiosks, mail-in coupons, mass mail, bag stuffers)
If you can't go to your retailer, and you can't go to your advertisers, then why not go right to your viewers?  Getting direct feedback from viewers can be expensive and time consuming, but sometimes it's the only option.  You have a couple of options here, which basically trade cost for speed.  On the cheap-but-slow side are things like direct mail campaigns (assuming that you can get customer information from your retailers, of course), and bag stuffer programs (putting mail-in forms directly in the retailer's carry bags).  On the more expensive-but-faster side of things are touchscreen kiosks, which can be used to ask the same survey questions, but provide you, the network owner, with immediate feedback (if they're connected to the Internet, of course). Ask some basic questions like "did you purchase XYZ today?" and "what did you think of the in-store TV network during your visit today?"  Whether using high- or low-tech options, you might want to consider incentivising your customers into action.  For example, you can arrange for a prize giveaway or sweepstakes to motivate them to respond.

Method 4: Take it to the people
There may come a point in time when you find it necessary to enlist some help.  Putting people on the sales floor where your digital signage network is running can be a great way to gauge customer response to the system, and also gives you the chance to acquire some "fuzzy" data about how the network is perceived both by patrons and store personnel.  There are a couple of ways to go about doing this.  Obviously the easiest is to have an employee drive over to one or more sites and conduct a survey (either formal or informal) and interact with customers and employees.  However, doing this would violate one of our earlier rules about doing blind studies.  Your own beliefs and desires (and probably those of your employees, as well) will most likely impact the outcome of your results, so your data won't really tell you anything.  A better idea is to give your survey requirements to a temporary staffing agency, who can place people into your stores with minimal knowledge of their purpose, other than to collect survey data.  If you're running a very large network, or you need expert help in writing your survey scripts and tabulating data, you might want to consider professional consulting services from media analysis firms like Arbitron and ACNielsen.

Method 5: Use technology
Finally, there are a number of technologically-advanced solutions that you might want to consider.  While none of them are quite ready for prime-time in terms of accuracy, they can be useful for establishing a baseline for traffic and viewership.  Sonar-based motion detectors similar to the ones used in alarm systems can be used to detect and track motion over a fairly wide area.  Special software can be used to sort out different motion paths, and thus extrapolate the actual number of viewers passing by, and their approximate time within viewing distance of your electronic signs.  Similarly, video motion analysis systems use video cameras to attempt to detect human motion and plot it across the viewable range.  Finally, pressure-sensitive floor mats (sometimes called security mats) can be used to count the number of feet passing by.  As you might guess, it's easy to fool these systems into erroneously high or low traffic numbers, but as tools for measuring baseline traffic, they certainly have their place.

As I mentioned in the beginning of this article, there are probably dozens if not hundreds of creative ways to gather the data that you will need to perform your ROI analysis.  The key is to remember that your advertisers and retailers both consider their data to be very private information, so in the majority of situations you can't waltz in and expect them to just hand it over.  Like everything else, it helps to plan ahead.  Explain why you need the data, explain the different options available, and allow them to control how much they're comfortable with releasing.  Many times, a retailer will warm up to you after your network has been in place for a while, and they have reason to believe that it has been improving their sales.

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