One of the main arguments I hear against digital signage and in-store media is that the screens create visual clutter. Most people wouldn't be able to tolerate an hour-long visit to their grocery store or favorite discount chain if it looked like Times Square inside, but given the continued growth of vendor-supplied POP displays and the dramatic rise of in-store digital media networks, it's easy to see why retailers and consumers alike might be worried about such a problem. As I wrote about last week, advertisers and retailers have been trying to better integrate their marketing efforts in an attempt to present a more cohesive and unified message to consumers. While many people have applauded these efforts as a step in the right direction, a recent Advertising Age column by Jack Neff talks about an even more compelling alternative: make advertisers pay for bad ads.
While Neff's examples focus on annoying TV commercials, the crux of his argument is this: consumers zap ads because they don't like them. Obvious? Yup. Insightful? Quite possibly. 100% dead accurate? You betcha. Ad avoidance technologies like TiVo get a bad rap today because they allow consumers all the benefits of "free" content without actually participating in the system that allows the content to be provided for "free" in the first place. However, given TiVo's meteoric rise, it's pretty clear that consumers were primed, ready and willing to pay a premium for this capability as soon as a practical system was available. Even without technological assistance, the average individual is constantly engaging in ad avoidance activities, whether he realizes it or not. As the New York Times noted in a recent article, the typical city dweller encounters around 5,000 marketing messages every day. To keep us from falling apart, our brains do a lot of subconscious filtering to weed out the important things ("hey, is that taxi going to stop before it hits me?") from the less important ("hey, check out that Gap billboard... orange is the new pink!").
We filter out ads for a million reasons. They might not be relevant to us, we might not agree with what they're promoting, or we simply don't like them for no logical reason at all. Marketers are already trying to address the first two items on the list (which are both flavors of contextual relevance) via mobile and Internet marketing strategies that heavily optimize ad selection based on the individual's personal profile, as well as newer efforts including Google's expansion into radio and TV commercials (again with an emphasis on targeting ads to specific people). Retail media networks also figure into the strategy (though to a lesser extent), as they rely on location to provide them with some degree of contextual relevance. But what can be done when consumers can't even explain what they don't like about an ad? It certainly seems like it happens all the time, and there are a large number of websites dedicated to ranting about terrible TV spots. So my guess is that while many ad agencies create their spots with the best intentions and the grandest of ambitions, most haven't discovered the secret formula to creating uniformly good (or great) ads.
This is where Neff's plan comes into play. His observation is that "commercial pollution proliferates because the economic incentives are flawed. Marketers don't fully pay for the damage they do when people hate their ads, or necessarily reap all the benefit when people like them. In other words, why worry about alternative fuel when you can get away with burning old-growth forests?" His solution: an Adwords-style auction system where popular ads are given prime spots or discounted rates, while bad ads are demoted and eventually removed altogether. The big problem with this system (aside from the fact that you'd have to get buy-in from the networks, advertisers, agencies -- basically everybody with a vested interest in the highly lucrative ad sales ecosystem) is that commercial ratings (via Nielsen) are still in their infancy. While expectations for the service are high, nobody knows exactly how the ratings will play out, what sort of accuracy to expect, or how useful they'll be for predicting future behavior, since there's no baseline to compare them against. Still, the problem is not insurmountable, and Neff argues that a well-implemented rewards/punishments system will motivate advertisers to deliver compelling ads, which will in turn improve viewer holding power and provide everyone with more appropriate financial compensation. If the industry can pull that off, then why stop there? We could take it to the next level and create a Kyoto-style agreement, where marketers with a poor historical quality rating can purchase "bad ad offset credits" from savvy companies to reduce their bad-ad karma footprint. TV viewers would thus have the good fortune of only watching fun, entertaining ads. And for every bad ad that still managed to slip in, they'd at least have the satisfaction of knowing that the marketer or agency behind it was paying a very real price for that indiscretion.
Back in the retail media space, a number of networks are already using these concepts to optimize their content loops (well, except for the Kyoto/karma part of it), with savvy organizations looking towards successful visual merchandising techniques as well. Since there's a smaller, more finite amount of time between ad exposure and possible action/purchase with in-store media, network managers can test numerous changes to a spot or a whole campaign much more quickly and less expensively than on TV -- and probably with a greater degree of accuracy. In addition, there's less of a penalty for making incremental improvements. I can't think of the last time I saw several slightly-improved versions of the same basic advertisement on TV (aside from multiple spots running in the same campaign, of course), but this practice is common for retail media networks (similar to how split-testing and multivariate experiments are used in online campaigns). We're also able to take advantage of register receipts, traffic monitoring data and even exit interviews to identify performance trends and further improve content segments. And with experiments in automated ad provisioning and user-generated content becoming more common, our industry will continue to be tested and its methods improved.
As networks grow to thousands and even tens of thousands of interconnected screens, we'll rely on software to do more of the content selection and scheduling for us, much as we do for Internet advertising today. Reducing visual clutter and putting an end to bad in-store ads will thus require ongoing vigilance by advertisers, content producers and host venues alike. Retailers will continue to tighten their grip over media look-and-feel in order to create a cohesive and well-integrated store environment that's friendly, inviting and clutter-free. Advertisers will continue to refine their branding techniques in order to make sure their product messages are loud and clear, even in the restrictive environment of the store. But content creators have the toughest job of all: adhering to the increasingly strict requirements of the aforementioned groups while still making cool, compelling content that people enjoy watching. While a Jack Neff-style bad ads penalty system could work well for retail media, I also get the feeling that a lot of advertisers and producers would need to stock up on those bad ad offset credits, until they figured out their own recipes for success.