The Digital Signage Insider

Razorfish's Patrick Moorhead Gives Us The Agency View On DOOH

Published on: 2009-05-12

A couple of weeks ago, one-time dotcom darling and current Microsoft subsidiary Razorfish released their 2009 Digital Outlook Report covering all things digital media, from web portals to Internet video to digital out-of-home offerings. Obviously, it was that last part that I was most interested in reading about. After perusing the document a few times, I was fortunate enough to work my way into a phone call with the agency's head honcho of digital out-of-home, Patrick Moorhead. If you've ever wondered what some of the big agencies really think about our industry, you may find his thoughts and observations most illuminating.

Digital experiences aren't the same as digital advertising, and vice-versa

Right off the bat we got into an interesting conversation due to a quirk of vocabulary. Our industry (which I think has more jargon per dollar of revenue than anybody else, even the government) decided to embrace not one, not two, but about a dozen different words for "digital signage." Much like the fabled tale of the 500 Inuit words for snow (which is crap, by the way), my "digital signs" to you might be "electronic signs" which to your friend might be "digital media networks" which to his pal might be "DOOH." So when I asked Moorhead about client requests for digital out of home media, he interpreted it as digital out of home advertising, which I would have classified as just a subset of the former term. Once we got our language straightened out, he confirmed that yes, most clients were looking at ways to extend the digital experience through the innovative use of digital technologies outside of the home. But in the same breath, he added that most clients were not interested in additional digital out of home advertising activities (namely, putting their big-brand ads on digital signage networks). We quickly settled into a jargon of digital merchandising and experience-centric networks versus digital OOH advertising networks (a distinction I've brought up myself in past blog articles).

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The central theme of this discussion was that brands should have the wherewithal to figure out what should happen next -- and what the customer expects -- at each stage of a shopping trip. Moorhead indicated that Razorfish's retail clients have been working on projects that create digital experiences that span across multiple digital touch points. Their ultimate goal is to anticipate a customer's needs as he travels through a bricks-and-mortar environment, just as his needs might be anticipated and streamlined on a website. From opening the automatic doors to digitally highlighting targeted deals to letting a customer check out without ever getting on a line, Razorfish's clients want technologies that can exceed a customer's expectations for what a retailer can do each time he enters the store.

What about advertising?

According to Moorhead (and as much as we'd like to think otherwise), Razorfish has not had a significant number of clients ask for their help with advertising on digital signage networks. He attributes part of it to lack of awareness, and if I had to guess, many of the folks in charge of advertising for big, national brands still consider digital signage to be somebody else's domain, not theirs. He also indicated, as we've heard many times before, that the lack of a unified inventory system and purchase process is probably preventing some of the brands that would advertise from actually doing so. Remember, big brands are used to sitting down for just a few hours and buying up millions of dollars in ad inventory. To many, it's simply not practical to spend ten times as long for only a tiny fraction of that spend. Yes, I recognize that this logic leaves out the value of the medium, but that's how many buyers think.

Additionally, the pricing of digital signage inventory could be at an all-time low right now, since the relatively few brands and agencies that currently use it have "uncluttered" access. As any Econ 101 textbook will tell you, the combination of over-supply and under-demand is brutal on inventory pricing. So even though more screens are being lit up every day, it's reasonable to guess that demand for screen time will increase at an even faster rate, increasing competition for the resource, and thus driving up its price over time. Of course, there's a ceiling on how high that price can get before the medium loses its appeal. But until there's more brand research on how effective digital out-of-home advertising is (in its many incarnations), it's basically impossible to say what buyers will eventually be willing to pay.

On the future of creative assets

Another thing struck me as odd while reading through Razorfish's Digital Outlook Report. Namely, they said that another significant hindrance to our industry was the lack of ready-to-use assets. I know that we have a long way to go before the content on your typical mom-and-pop digital sign is as optimal as can be. But for the larger out-of-home networks, I basically thought content was a solved problem -- it had to be built from scratch, sure, but at a relatively low cost, especially when amortized over a large number of screens and a reasonable period of time. Thankfully, Moorhead was able to clarify Razorfish's position on this issue. While it's generally understood (thank goodness) that one simply can't repurpose stock content -- a TV commercial, for example -- agencies would really like to find a way to give their content some additional smarts that would let the components of an asset reorganize themselves based on their target medium. However, I don't think anybody expects that a TV commercial will know how to automatically reformat itself into an in-store TV ad anytime in the near future. (If that level of self-awareness did exist, surely the armies of our new robot overlords would be on the march before long.)

Razorfish occupies a somewhat unique position in the agency world. They're bigger than the small guys, but are owned by a tech company (Microsoft), rather than one of the "big three" advertising conglomerates. Likewise, they started out with a purely digital focus, but are now taking on more of the responsibilities of a traditional agency. Sure enough, their strong roots in technology and recent forays into traditional media are mirrored in the ways they participate in the digital out-of-home space. Technically strong, their business in experiential media -- advanced merchandising, digital in-store experience enhancement and the like -- is brisk. However, when it comes to applying a traditional ad sales model to a new medium like DOOH advertising, they find that their own customers just aren't asking for it.

What can digital signage folks learn from this?

First, it's clear that we have a vocab problem. When two people can say the same words and mean different things, there's a real issue there. I don't know how we want to fix this one, but it seems like it ought to be entirely within our power as an industry to do so. Second, while the process of buying digital signage inventory is getting easier, it's not quite there yet. I know a lot of people are working hard on this: SeeSaw, Adcentricity, bookingDOOH and newcomers like AdSemble, to name a few. Moorhead even mentioned SeeSaw as an example of a step in the right direction. But clearly we're not there yet in agencies' eyes. Finally, we need to standardize. I don't think the magical morphing creative asset lies in our near future, so we as an industry need to make it as simple as possible for traditional agencies and content houses to build content for our screens. That means a combination of best practices for creating digital signage content, as well as technical standards for things like content format support and interchange formats. Again, this is a work in progress (which I need to do a blog article on, just to get everyone up to speed), but there's a long way to go until it's over and done with.

Should our industry do more to highlight the differences between digital out-of-home "experiences" and advertising? If so, how do we do it?


+1 Richard Trask 2009-05-12 18:35
It seems to me that agencies could contribute to the awareness of the DOOH industry and together solve the lack of communications issues. It would be productive to have a forum where agencies and DOOH industry professionals discussed the issues and helped solve the discrepancies. Maybe the venue should be through one of our associations, DSA or POPAI. If the agencies are really interested I think this could help progress the industry. However, if the agencies are not interested then we have a bigger problem.
0 Pat Hellberg 2009-05-12 19:27
Kudos for another good post. It underscores a wide, and seemingly growing, gulf. On one end of the spectrum, there's the forward thinking of folks like Razorfish who are trying to create a multiple-touchpoint digital customer experience. On the other end are signage networks who have their hands full just keeping the "MS error" message off their displays. (Saw the "blue screen of death" just last night at a Fred Meyer grocery, a holographic 3D projection of the blue screen of death, no less.) DS/DOOH networks are like snowflakes. No two are the same. Creating standards that apply to these disparate networks might make them more attractive to the brands/agencies. But it could also water down any intrinsic, unique characteristics. Perhaps operators should focus on what makes their own network special...what makes it stand out. Then let the aggregators such as SeeSaw and Adcentricity sort out how Network A differs from Network B and Network C, etc. so it makes sense for agency planners & buyers.
0 Bill Gerba 2009-05-12 20:00
Richard: I have to wonder... even if you got them all in the room do you think a single term would stick? While there are definitely some commonalities in jargon from agency to agency, and from big to small, even in traditional media people use all sorts of words interchangeably. However, if the vendors of these services (us) started calling them only one thing, when the time came to actually go looking for a solution the agencies might actually figure out what they're **actually** looking for. Pat: Appreciate it. I've often felt the same - people should be hyping what makes their solutions new, unique and innovative. However, many network owners have trouble articulating this even **before** the notion of unified ad sales enters the picture. Not sure why that is, but these days one of my very first questions to a new client or prospective client is, "what's different?"
0 Robert Polansky 2009-05-13 01:50
The basic issue is does it work to move product followed by my favorite word. Value. Effectiveness, efficiency and low cost equals value. If it works for one store. Location. It will work for lots of locations and by and large advertisors have patient if they see expansion and roll out. Throw in an understanding of the dynamics of the particular venue, good salesmanship and well thought through location configuration and you have a business. As a pioneer in the in store pop business I set up the largest individually adressable from a central location network with 24,000 two sided led,s in over 5,400 of our finest supermarkets. with just about every major consumer product company did 20 million in my third year. No one has set up 24,000 screens led or otherwise yet. Now I am moving to do another set of networks except instead of LED's, I am using LCD's. I have always been successful selling space/signs as promotional shelf talkers to communicate prices and specials which in addition can communicate a brand sell and that is what they are and that represents, in the opinion of Robert Polansky the most effective and only way to source the in between "marketing" budgets of the CPC's. One day the people selling the category will wake up and find that the positioning statement which positions it as both a promotional shelf talker and a brand sell vehicle ( a hybrid that does both) is what we have here but a hybrid that works to move product. One day, and I plan to devote a whole lot of effort to it....we will have our own line on the marketing plan development grids that the CPC's do each year for their own fiscal years...some January and some June...even in August the fiscal years/planning periods vary by CPC. A good salesman/woman...person...knows the fiscal year/planning cycle of their clients. My people, I had a sales force of 12 in four cities, did. As I said, I was the first (ahead of my time??) with my individually addressable linked from a central location two sided LED screens,. 4 per store in 5,400 supermarkets including...Schnucks, A&P, Wakefern/Shoprite, Kroger (all KMA's including King Super), Ralph's, Vons, Fred Myers,Piggely Wiggly, Shaws, Giant Carlyle, Giant Baltimore Washington D.C., Winn Dixie, Stop&Shop, DeMoulas, Bruno's, Homeland, Tops, Price Chopper ect....In addition, each of my messages contained price, brand sell and copy line and were direct and hard hitting given the limited exposure time per shopper. My biggest bone of contention with my prospective chains/retailer today is the life of the infomercial which assumes that shoppers will stop look and listen long enough to get the point and stand in the aisle and take it all in. Maybe with repeated exposure over several months...maybe? My chains can use their space for infomercials but the space I sell will be intrusive, hard hitting and immediately communicative to move product through purchase. Point of purchase is much like radio in that it is a reminder vehicle depending on copy point awareness/selling propositions already being communicated via other means and or it is a short price special communication tool to communicate prices and specials. Messages need to be intrusive, hard hitting and "reach out and grab the eye balls" I still like the immediacy and hard hitting impact of my two line LED's (we tested the heck out of every commercial given my 18 years of consumer product package goods marketing, testing/research has become my middle name!)..but they have worn out in today's environment and are considered old hat although I am still recommending combinations of LCD's and LED's configurations in certain venues. I was ahead of the time (still no one, not even Focus Media has done more and they use power whereas all of mine were networked) but the network I set up had every major consumer product company but more importantly we were embraced by the store managers who depended on them as a complement to their best food day adds (some even used them as traffic signs and they all told the time/clocks). We've come a long way since then but the above positioning statement is the most effective means of selling and oh yes.....when I called one of my former clients and told him I was back the first thing he said is Bob, are you still charging xxx per spot. My answer was that I represent an even greater value,,,,I am selling it for 20% less and substantially way below what others charge. His response was that he would participate. Some things don't change. Value = repeat purchase.
0 Richard Trask 2009-05-13 14:19
While I agree with your assessment on common terminology my experience tells me that when an issue erupts between two groups that have differing views the best solution is to try to solve the problem together. If we as an industry try to solve the communications problem alone we may never satisfy the needs of the agencies. Unfortunately, it is common for companies to "coin" new terminology to differentiate themselves from the fray. I think this is inevitable. The challenge is to present ourselves in such a way that we can be recognized by the agencies and their customers. One of the major issues that exist in DS today is it is not mission critical, rather it is a nice to have. I think the agencies have to keys to the solution, if in fact we can figure out a way to work together.
0 Daniel Wilkins 2009-05-13 15:09
Richard: OVAB has an Agency Advisory Board made up of senior staff from the major agencies (and some smaller groups). That board is helping bring all of these issues to light so that they can be solved. In fact, they have even formed an Operations sub-committee made up of a few agency folks and networks to address standards in proof-of-performance, lexicon and proposal submission.
0 David Titchenal 2009-05-13 16:10
It may be possible to standardize a top-level label for DOOH but the differences between retail networks (like Polanski's) and captive audience or long dwell networks will require a separation of terms. I also wanted to say how much I appreciated this post by Bill and the intelligent comments that followed. I subscribe to every DS or DOOH informational source I can find and spend a lot of time speed-flushing most of the self-serving posts. Items like this one though are gratefully enjoyed.
0 Dan Hong 2009-05-13 17:09
I'd love to see a forum for Ad pros and DOOH pros could exchange ideas. I think POPAI might be the place, I know the DOOH people will chime in, but getting the Advertising people onboard might be a tougher sell (if you'll pardon the pun). Like David, I'm happy to see even an early shot at this. We've got to get into the mainstream conciousness when it comes to advertisers.
0 Bill Gerba 2009-05-13 17:33
The funny thing about our industry is that we seem to like overcomplicating everything. Instead of one technical standard we have a hundred proprietary approaches. Instead of one industry body, we have 6 or 8. But perhaps that's where we start -- instead of siloing each different type of person/company into a group (e.g. OVAB=advertisers, POPAI=retailers/brands, DSA=vendors, etc.) we can start hooking these groups into one another. I think we have all of the right people on board right now... they're just not part of the same groups, and are consequently not talking to one another enough.
0 morgan williams 2009-05-19 19:42
Agencies decided it was in their interest to produce 12 second spots or 7 second spots to run on the internet. It will just be a matter of time that somebody gets on page to consistently produce quality content at a reasonable price to run on different signage networks. I could only hope that some content house that gets it would jump in. I wonder if an agency would work with the talented little guy or would they just create their own department for signage networks?
-1 Rob Wilson 2009-05-22 15:14
Should our industry do more to highlight the differences between digital out-of-home "experiences" and advertising? If so, how do we do it? It's a great question. In response to the first part: Yes. Advertising is one component in the DOOH experience. Because this is a multi-faceted medium -- technology (generation, distribution and display) and content (advertising, information and programming), we need to back up and see the whole picture, and understand better how each element feeds the others. Obviously, reading the responses so far, there is a wide variance in our sense of what constitutes the "digital-out-of-home experience." Most seem to see it as a tech issue. To me -- coming from the content creation quarter -- the "DOOH Experience" is much, much more than technology, advertising, or even content. It is the synergistic merger of high technology and high-quality digital content where the true potential of this medium lies. It's all for one, and one for all. Content -- my area -- is composed of three elements: ads, information and program. Traditionally, people tolerate the first to get the second and third. That's changing. Increasingly, the ads will need to be integrated into the program, or the display structured to deliver advertising, programming and information simultaneously. In DOOH, the opportunities are there, and technology is opening up new frontiers for experiencing the content in more and more engaging ways (RFID, Bluetooth, holographic displays, targeted ads). The frontier is exciting, but risky territory. Just as the technology advances, so the sophistication of the viewer is making quantum leaps. Audiences expect technology to surprise them, and savvy users bore easily. Stressed, aggravated and recession-weary shoppers are increasingly tuning out. Metrics may show that people "respond" to "intrusive, eyeball-grabbing" ads, but soon - -sooner than we think -- the novelty of the medium will wear off and we will be facing a new challenge. "Experience" can be bad or good -- already, there are pockets of resistance to digital signage among citizens groups and planning commissions. People are being turned off. That is the dark side of the "DOOH Experience," which we need to recognize before it is too late. It is also an opportunity: to step back, see the "digital-out-of-home experience" in a more responsible social context, bring creative content into the mix, to blend art, entertainment, interactivity, novel displays, and sensitivity to the surroundings -- "site-specific content" -- in a way that complements the experience of the viewer and engages them, beyond a fleeting glance, and leaves them feeling better, smarter, and tempted to look again. In response to the second part: How do we do it? Stay tuned.

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