Picking up where we left off last time (in "Calculating Digital Signage ROI: Understanding the Limits of Your Data"), I'd like to focus on some specific metrics that might be useful to digital signage network
owners trying to discern the true value of their systems. While
there are probably thousands of different variables that you could
choose to analyze, I've picked 3 tried-and-true marketing statistics
that exist outside of the digital signage world to show that even
though our medium may be new, some of the ways to analyze it are as old
as the hills.
Metric 1: CPM
Ah, CPM, the granddaddy of marketing statistics. A three-letter acronym for Cost Per Thousand
viewers, CPM shows its age by having part of its name written in Latin
("M" is the Roman numeral for 1,000). While many people debate
the value of CPM metrics in today's era of Tivo ad-skipping and
Internet clickthroughs, I maintain that CPM is useful simply because
there is such a vast quantity of CPM data available that we can use to
establish baselines and normalize our data. Basically, the way to
calculate CPM goes something like this: get the average weekly traffic
numbers from your venue. For the sake of this example, let's say
that our sample retailer has 5,000 customers each week, based on
register sales and quarterly audits. To keep the example simple,
we'll also assume that the average customer spends 10 minutes in the
store, and our digital signage content loop is 10 minutes long,
consisting of 100% advertising. Thus, on average, every customer
in the store would see each ad in the loop about once. Finally,
assume that a single spot in the loop costs $150 per week. We can
thus calculate that each impression costs about $0.03 ($150/5,000), so
the cost per thousand is about $30.00.
Metric 2: Impressions
Very similar to CPM is the notion of impressions. Instead of tracking only the number of unique people
that see an ad, impressions is a way of measuring the number of times
that any given person sees the same ad (even if they've seen it more
than once). For example, let's use our scenario above. Once
again, our sample retailer has 5,000 customers each week, and the
average customer spends 10 minutes in the store. Our digital
signage content loop is 10 minutes long, consisting of 100%
advertising. Once again, each impression costs about $0.03 and
our cost per thousand visitors is about $30.00. However, what if
the average visit length was really 20 minutes instead of ten? In
that case, each viewer would see each ad an average of twice.
Now, even though our CPM is exactly the same (since it's the same
number of visitors as before), our cost per impression has been halved,
to only $0.015 per impression.
How do we tell whether it's
better to use CPM or impressions? Well, like everything else, it
depends. In this case, it depends on what you, the digital
signage network owner, are trying to sell. If your network places
screens in high-traffic areas with short average visit duration, a
CPM-based pricing system probably makes the most sense for you, since
it more accurately describes the kind of traffic that you have and the
kind of impact that you're going to be able to make. On the other
hand, if you have a captive audience that tends to stay in the venue
longer, you'll be able to present the same (or similar) content to your
audience several times in a single visit. In this case, it might
make sense to measure impressions, and price your network out that way.
Metric 3: Immediate feedback response
There's
no generally accepted term for what I call immediate feedback response,
or IFR, even though it's an extremely common method of measuring
different kinds of out-of-home marketing and advertising
campaigns. In an IFR system, the marketer uses some kind of
simple but measurable feedback system to record the presence of a user,
and then uses that conversion number (e.g. the number of viewers who
were converted from passive viewers to active participants) as the
basis for other measurements, like sales conversions, brand recall, and
so on. For example, imagine a digital POP display
that instructed the viewer to take a free recipe card from a stack
beneath the monitor. By recording the number of recipe cards
given out, and the frequency with which the stacks need to be
replenished, a retailer can gauge (with reasonable accuracy) how many
people are paying attention to the signage. This technique can
yield more accurate results than just using baseline traffic data, and
more importantly, it helps demonstrate who's looking at the
signage, instead of who's just walking past it. The key to a
successful IFR experiment is to keep the feedback loop short, simple
and attractive to the viewer. If it's challenging or
time-consuming for your viewers to respond to your promotion, they
won't.
These are three of the quickest and easiest metrics to
investigate, and they require relatively little activity on the part of
the store owner (which can be critical, since getting owners or
managers to do extra work for you is not always going to be an
option). As I mentioned before, the metric that you choose to
track will be highly dependent upon the type of network that you run,
the frequency and duration of your content, and the kind of audience
that you are hoping to attract and appeal to. And in some cases,
you might need to track something completely different than the metrics
I use above. However, these should serve as a good baseline, and
we'll use them as examples in the next installment of this article, Calculating Digital Signage ROI: Methods to Gather your Data.
Stay tuned!
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