The Digital Signage Insider

The New York Times ran a really interesting article on Monday about the rise of digital advertising. Notice I didn't say digital signage advertising, since that's only a tiny subset of the overall digital ad market, which is dominated by online, mobile, and increasingly, television. It seems that small and large agencies alike are starting to realize the power of digitally created and distributed content, and now that they understand the flexibility and target specificity that they can gain, they're feverishly working away on integrating digital processes into all of their offerings. At the center of the NYT article is David W. Kenny, the former chairman and chief executive of Digitas. (Unrelated, if you found this article because you're looking for cheap digital signage systems for smaller networks, you probably want to check out our Digital Signage EasyStart page.)

These days, Kenny handles digital advertising strategy for the entire Publicis conglomerate. His goal? To create a "global digital ad network that uses offshore labor to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which advertising message to show at which moment to every person who turns on a computer, cellphone or -- eventually -- a television." You know, sort of like how large digital signage networks function today.

Citing technology, and not budget, as the limiting factor in how many versions of an ad can be developed, tested and deployed, Kenny notes that a few years ago a major manufacturer might have created and deployed five versions of an ad to target different demographics. Today, that number might be as high as 4,000. In the future it could climb even higher, with the eventual outcome being that ads are assembled on-the-fly and customized for every viewer based on a database of collected information that includes viewing habits, purchase histories, and the like. Sound familiar? It should, since Google has been talking about that kind of customization for a long time now. We actually covered this story last year, when Google started testing video ads, and since then some other firms have also spun up on-the-fly ad creation offerings, including Pick-n-Click, SpotRunner and Visible World.

At first glance, creating lots of versions of an ad sounds like a great way to maximize your buzz and conversion ratio. But before we apply this approach to digital signage, three significant challenges must be addressed: customer data acquisition, content creation and distribution, and results measurement:

Customer data acquisition

Before you can customize an ad for a specific customer or demographic, you first have to know who that person or demographic is, and how likely they are to watch your screens. The best way to collect this data on a high level is to ask your host venues for demographic information. These days, most chain stores (even smaller chains) keep track of basic demographic info like age, race, sex, and so on, so that's a great place to start. Increasingly, chains are also deploying loyalty programs that link together purchase history, trip frequency and demographic information. This is even better, provided you have the means to actually analyze the data. Armed with this information, the next step is to decide how many spins of an ad you want to make, and then figure out which parts of the ad will get customized based on your selections.

Content creation and distribution

Though I'm intrigued by the idea of having an offshore army of graphic artists churn out iteration after iteration of my content, I suspect that this kind of manpower will be out of reach for most digital signage networks and their advertisers. Fortunately, more and more digital signage software companies (WireSpring included) are letting customers dynamically generate their content based on a template system. So instead of rendering out dozens or hundreds of separate files for each change you want to try, you start with a single "master" version of an ad. Then you define the parts that will change based on your desired rules and constraints, type in some text, and let the software generate all the different versions of the ad. Not only does this approach reduce your content creation costs, but you can create custom versions of the same spot by simply typing new text, selecting a different product image, or changing a few color values. What's more, these dynamic ads can automatically change their language, currency, and other attributes to match the venue where they're being shown.

Of course, even if you're not interested in tracking sales performance for hundreds of versions of an ad, the template method lets you deliver other soft benefits to your venues and advertisers. For example, something as simple as dropping in a custom logo or writing out a local address can be enough to turn a stock ad or other piece of content into a semi-custom affair.

Results measurement and analysis

Once you've got 500 versions of your ad out there, you'd like to know how well they're working, wouldn't you? Unfortunately, unless you're using a purpose-built system like DS-IQ to track register receipts at your venues and correlate them with the different iterations of your ads, you'll need to create a database -- or at least a very large spreadsheet. Even then, there are no shortcuts for determining the cause and effect relationship (if any) that exists between a particular version of an ad and the associated product sales. Sadly, though there are more and more large networks being deployed (and apparently successfully managed) these days, data analysis is still an often-overlooked component of ad-driven digital signage networks, and I don't get the feeling that we're building up the same body of expertise as we are in content creation or screen placement. The reason probably has something to do with the fact that it's both really complicated and really time-consuming work. You can start with the best software and a team of trained statisticians and actuaries, and they'll still spend many long hours identifying and isolating trends in the data. In fact, even Kenny and Publicis acknowledge this challenge. They believe that ad agencies will evolve into number-crunching middlemen who can make sense of the torrent of data coming from the uber-customizable ad campaigns of the future.

With a few exceptions, the traditional content guys are still trying to catch up to the digital signage industry when it comes to dynamically inserting and pulling different versions of an ad. But while we may be ahead right now, there's definitely room for improvement. Between establishing when it's appropriate, worthwhile or even necessary to create ad variations based on demographics, getting the information from our host venues, and figuring out exactly what worked and what didn't, we have a long way to go before large-scale, on-the-fly customization becomes commonplace in digital signage networks. Still, it's easy to see the argument for doing so. By custom-tailoring content to fit the ideals and preferences of the target viewer, advertisers may not only increase their chances of making a sale, but may actually strengthen their brand image and improve the overall shopping experience. In turn, these factors should lead to increased customer loyalty and more repeat buyers, which benefits the advertisers and host venues alike.