Wow, it's been a while since the last blog entry. While I'd love to say it was because I was basking in the sun on the shore of some tropical isle, in truth the daily grind plus the chaos of preparing for this year's Digital Signage Expo took up the chunk of time that normally goes into researching and writing a blog article. The good news, though, is that we did have the opportunity to meet some new people, see lots of up-and-coming products and hear great insights from some of the industry's top experts while we were there. In fact, I was lucky enough to moderate a panel discussion on "Quantifying Ad-Based Networks," and I brought back some notes that might be interesting to those who weren't able to attend.
Our panel featured Kim Rayburn from BIGresearch, George Wishart from Nielsen In-Store and David DeBusk from DS-IQ -- an ideal selection of people to speak on the topic of in-store media measurement, since the disciplines and methods practiced by each are dramatically different. Consequently, the opinions that each brought to the table were quite diverse, and it was a good opportunity to see how different types of media measurement organizations think, what their expectations are, and where they see our industry heading over the next few years. Much of the hour-long session was spent fielding questions from the audience, who were clearly concerned about monetizing screen time and providing accurate metrics to their clients. While many interesting questions were asked, we can summarize the views of the audience and panelists in three key points:
We need a common language
This first point was brought up by George Wishart from Nielsen. He notes that 55% of all marketing dollars are spent in and around the store. I wish I had a source citation for that number, but I suppose hearing it from the mouth of the Global Managing Director of Nielsen In-Store is good enough :) Since most companies have a fixed number of dollars to spend each year, Wishart notes that it's important that new technologies like in-store digital signage can be compared directly against other programs like TV commercials and direct mail campaigns. Only by doing an apples-to-apples comparison will marketers consider adding digital signs into their media plan. Just like anybody else, marketers like to shop around when spending their money, and the inability to compare digital signage systems with other purchase options is something that may be slowing the industry down right now, especially for ad-supported networks.
We need a common metric
This point goes hand-in-hand with the last, and might be slightly more important. In fact, all three of our panelists made that statement at one point or another, and it certainly makes sense to me. The simple truth is, most media buyers and planners still use CPM because it is well known and well understood, not because it's necessarily the best metric or because there aren't any alternatives (there are lots of them). So it's likely that for ad-driven networks -- and in fact any network that relies on audience measurement -- CPM will continue to be the most widely accepted measurement standard in the near future. Whether this will hold true in another 3-5 years is harder to say. With the advent of all sorts of new measurement technologies like motion sensors, eye-tracking cameras and RFID tags, we'll certainly have the capability to take more detailed measurements on the sales floor, and I can think of lots of cases where marketers would be interested in using such data to present more targeted messages. However, without something to compare this new data set against, media planners are going to have a tough time figuring out what a fair price is. And with so many potentially different "standards" coming out (for example, one that measures gaze tracking, one that measures aisle traffic, and one that measures idle time), many planners may be hesitant to move away from the tried-and-true CPM.
We need to relate media consumption with purchase intent
This point was originally made by Kim Rayburn as part of an argument about whether retail media is better suited for "push" or "pull" marketing. In brief, push marketing tries to sell directly to the consumer without going through the stages of building brand/product awareness, or waiting for the consumer to necessarily identify a need for the product. In contrast, pull marketing relies on either a latent consumer demand or else lots of generated buzz to compel consumers to get up and ask for the product themselves, rather than waiting for a sales pitch. Consumer products companies like Nike and Coca-Cola have done some amazing pull marketing campaigns to get consumers to ask for products that they might not have felt the need for otherwise. The problem in retail environments is that consumers are already in a buying mood -- they're there to purchase goods -- so the difference between push and pull begins to break down. As any regular reader of this blog knows, I'm a huge advocate of including a call-to-action in your retail media content, and that's clearly a "push" strategy. However, we've also written a lot about modifying the retail environment to improve the store experience and build brand awareness. That's definitely more of a "pull" notion.
While neither approach is inherently right or wrong, they do work differently, so it's impossible to make an apples-to-apples comparison between content clips that employ these different techniques. For example, a content segment featuring a call-to-action might bring about an immediate increase in sales of the advertised product very early on in its campaign, but then fade out after a few weeks. Conversely, a more pull-oriented clip that builds buzz and awareness might not create that initial surge in sales, but could very well lead to better net sales over time. We currently lack the tools and methodology to precisely determine how and when in-store media affects purchase intent, but obviously all three companies are working hard on systems to tell us just that.
Of course, there could be dozens of other reasons why traditional media buyers and planners aren't embracing retail media at the rate we'd like them to. However, the panelists and audience members both gave me hope that we'll figure this problem out soon. We have sufficient market demand (from both potential service providers and potential customers), a number of new proposed solutions (like DS-IQ's analytics service), and the astonishing statistic that 55% of all marketing spending is done in and around the store. Mix those factors together, add a dash of free market economic forces, and we should have a solution in hand, right? Well, maybe. I'm hopeful that we'll eventually see a unified solution for tracking and measuring in-store media consumption, and relaying that information to all interested parties. For the time being, though, the best approach may be to stick with standard CPM calculations, and then spend some time trying to justify exactly why your particular segment of the population is so valuable to marketers.