Since my memory isn't perfect, I'm thankful that a few readers reminded me of this post that Adrian Cotterhill wrote about a month ago, aptly titled "How much should you spend on Audience Measurement?" He notes that in the UK, the radio industry body called RAJAR allocates 0.9% of the total gross advertising revenues from that medium towards measurement (in this case, using decidedly low-tech self completion diaries). The print body, NRS, spends about 0.25% of gross ad revenues. The TV folks, called BARB, spend 0.3%. And last but not least, the outdoor body, called POSTAR, chimes in with a meager 0.1%. If we were to translate that into terms compatible with the US digital signage market (which generated $330M in ad revenues during 2007, according to PQ Media), that would mean that an industry body might produce useful data with a budget of between $330,000 and $2.97M. Since the US market is also estimated to have around 300,000 "channels" of digital signage content playing (sorry, can't find the source for that), that would translate to a measurement cost of between $1.10 and $9.90 per channel per year. Take that number and add it to our 2007 estimate for the cost of running a digital signage network ($6,750 over three years), and it represents less than 0.5% of the total cost of installation and operation. I don't know about you, but I know quite a few people who would be willing to shell out ten bucks a year per screen for meaningful, industry-approved measurement information (whatever it might be) -- especially if that's what advertisers needed to get on board with the medium.
Ah, but here's the rub: As Rob Gorrie notes on his blog, we can't expect that out-of-home digital media would be as cheap to operate as older, more established channels. (This seems counterintuitive to me, given all of the innovation that has supposedly taken place in the advertising market in the past two decades, but I digress.) Further, we may not even want it to share the same operating model, since the mainstream guys have their own problems. According to Rob, "Most traditional media is getting challenged right now as well because their measurement systems are viewed as flawed (see Adrian's comments in his post) or they haven't kept up with the times. If they haven't changed their ways (e.g. TV C3 Data) then they've seen huge plummets in revenue recently (e.g. Newspapers)." This is a pretty important point, since one of the reasons advertisers have been poking around in the digital signage space is because of its supposed measurability.
With all that said, I'm no closer to guessing what measurement is worth than I was before. I think virtually everyone would pay $10/channel/year for solid metrics that could be used to justify higher inventory prices, sell more spots, or both. Even at ten times that price, it seems like a great deal to me. But I'm neither an advertiser nor a network owner or aggregator. I'm just the software guy that sits around trying to figure out what on earth everyone else is thinking. That's where you come in:
- If you're a brand, a retailer or a network owner/aggregator, how much is accurate and dependable measurement information worth to you?
- If you had that information, how would it benefit your company? Would you have an easier time selling ads or be able to charge higher prices?
- And most importantly, would the Madison Avenue crew finally start inviting you to their trendy parties?