INTERNATIONAL. The Moodie Report is pleased to have joined forces with information technology giant IBM to provide a regular series of articles on the latest developments in retail technology with direct relevance to the travel retail channel. IBM Global Services Digital Media Group Niall Duffy begins by de-mystifying dynamic media solutions – and examines the vast potential of digital content for in-store media.
“TV is bad news for train of thought” – Sunday Times headline 22 September, referring to TNX, a UK company’s plans to offer television-style services on British trains.
In the movie Minority Report there is a scene where the character played by Tom Cruise walks through a shopping mall as virtual advertising campaigns are directed specifically at him, following identification by a retinal scan.
Fanciful science fiction – or the near future of open space and in-store advertising and marketing in any of the world’s leading airports?
All indications point to the latter. We already have technologies that would enable this: namely pervasive wireless networks which can identify us by our mobile phone or loyalty card; and more recently, the increased use of digital content and digital devices for dynamic media displays in-store, within shopping centres and even open spaces.
The IT Industry loves confusing acronyms and there are a host of them being applied to the new dynamic media solutions that are aimed at the organisations that control these spaces – including retailers, airports and train operators. The new services are essentially about entertaining, informing, advertising and selling to consumers, using devices such as plasma screens, special kiosks or special digital displays.
Various different tags have been applied to these technologies – Digital Signage, Dynamic Digital Signage (DDS), Digital In-store Marketing (DIM), Dynamic Digital Merchandising (DDM), and Captive Audience Networks (CAN). No doubt, many more will emerge.
What each of these acronyms suggests is that there is a new technology that uses digital technology, which is dynamic not static, as a new way of marketing to consumers – and by doing so is reinventing the media. A more general and perhaps intuitive name for these technologies is indeed “dynamic media solutions”.
ON THE RECORD: “THERE ARE ALSO THE DIRECTLY MEASURABLE RESULTS OF INCREASED FOOTFALL, FREQUENCY AND BASKET SIZE, WHICH LOWER THE RELATIVE COST OF MARKETING” – NIALL DUFFY
Why the interest now?
So why is this any different from an old-style analogue in-store TV? Isn’t this just a fancy new way of showing the same old material? While it is true that a lot of attention is focused on the use of plasma screens, there is a lot more to it than that. Traditional analogue in-store displays have typically been driven by a locally-managed video tape player, or perhaps even DVD player, and generally have low “refresh rates” – that is, the content is not updated very regularly, sometimes as little as once a month. Analogue systems could provide “live TV” by satellite but there are substantial costs of carriage and in creating a large volume of TV quality content.
Digital technologies are different in a number of critical ways:
Digital content: There is a range of formats that can be used in a digital environment as well as TV content. Other rich media formats such as web-style content, and relatively low cost computer animation packages such as Shockwave Flash, can be used by themselves or integrated with TV-style content.
This means that more visually appealing multi-media content can be produced at a lower cost than traditional TV style content. But more importantly, the nature of modern digitally-produced content means that it is possible to update, refresh or change parts of the content without having to rework all of it. For example, if a music store is promoting a new album and cuts the price, then the digital content can be updated automatically on-screen without having to recreate all of the content. It is this ability to use low cost dynamic content that is one of the key differentiators compared with the traditional analogue technology.
Devices: Dynamic digital solutions are not limited to plasma screens (or any other type of TV monitor). These solutions can deliver content to any display device. Examples include the music kiosks used by Virgin in its New York stores and the various electronic LED billboards increasingly used in railway stations around the world. But it is also possible to deliver content to point-of-sales devices fitted with screens or even wireless devices such as PDAs.
Networked distribution and management: The key additional element of new dynamic media solutions is the introduction of centralised management of content by using existing IT networks.
Organisations can fully exploit the benefits of dynamic media solutions by centrally managing the content that is delivered to and presented on every display device in any location. This removes the cost of having local store staff to maintain content systems and provides any organisation with the reassurance that it knows what is being shown on all of the display devices in all of its locations.
Moreover, modern IT-based systems enable engineers to check for any errors or problems that exist anywhere on the network from a central location. It may also be possible for engineers to remotely correct any network errors.
In recent years more and more retail organisations have been improving their IT network and upgrading their point-of-sale machines. This means that they already have the necessary infrastructure in place to begin to deploy dynamic media solutions.
Who is doing it, and where will they see benefits?
A growing number of dynamic media solutions are emerging, and in the UK many of the major domestic market retailers have piloted or begun to deploy systems. The identifiable benefits include enabling organisations to enhance the customer experience and improve the level of services on offer. There are also the directly measurable results of increased footfall, frequency and basket size, which lower the relative cost of marketing.
Examples include:
1 Electronic billboards which allow event holders to provide better information and video images.
2 Amsterdam trams discovered the unexpected benefit of lower levels of vandalism on trams with a dynamic media solution – perhaps as well as installing CCTV systems in town centres, we should be putting in plasma displays too?
3 McDonalds has adopted digital signage for a number of reasons, including improving the dining experience and offering a wider range of activities to customers with the aim of increasing their spend. It also found unexpected benefits, namely lower vandalism and lower staff turnover in restaurants where it piloted the system. It will also use the same infrastructure for security, staff training and to sell wireless network access to customers.
4 Many cardboard-based marketing activities can be replaced with digital signage, which reduces the ongoing operational cost of replacing billboard or display content. This has the added advantage of being more environmentally-friendly. However, speed to market and flexibility to change are key – for example, Vodafone could be maximising its sponsorship of the Ferrari F1 team by showing highlights and results of a Grand Prix within hours of the chequered flag. There are also added benefits in the form of compliance with internal branding guidelines and policies – you know that all stores will execute campaigns at the right time and in the right way.
5 Others are looking to dynamic media solutions as a means of generating advertising revenue. On the face of it, this would seem an ideal new medium for advertising – after all most retail outlets and public spaces have substantial numbers of eyeballs passing by, and the existing billboard market shows that there is a market for this type of advertising.
ON THE RECORD: “YOU KNOWN THAT ALL STORES WILL EXECUTE CAMPAIGNS AT THE RIGHT TIME AND IN THE RIGHT WAY” – NIALL DUFFY
But before retailers get too excited about competing with TV soap operas for advertising rates, this potential new media will take some time to develop. In the UK, the total outdoor advertising market is well under one fifth of the value of the total television ad spend market, according to figures from the Advertising Association. TV advertising is based around captive audiences tied to the TV through the content before and after the advertising.
Audiences will be more transient in open environments and unless they are specifically sitting down in areas such as airport lounges they are unlikely to be captive in the same way that they are in a traditional TV home environment. Furthermore, advertisers require feedback on who is watching their ads and their impact and will expect this sort of feedback before spending money on new media.
However, this is not to say that a large media network of new retail store-based displays will not emerge. If the media network was linked to evidence of direct customer actions, such as additional sales recorded in the retailers’ electronic point of sales system, then it could become a unique media. Such a network would take time to build and to be accepted by advertisers. Retailers should not expect to have the full IT infrastructure behind a dynamic media solution paid for by advertising revenue – instead retailers should take a holistic view of all of the benefits.
So this is about technology, right? Wrong”¦
It is easy to get caught up in the technology but it should always be remembered that we are talking about media and not the specific technologies behind it. Companies that are led by the technology will not be as successful in their implementation of dynamic media solutions as those who think through the fundamentals of how the media works, and understand their objectives in using it.
This means understanding:
1 The core objectives behind a dynamic media solution, namely to increase profits both directly through increased footfall, frequency and spend and indirectly through enhanced branding and positioning, better direction to customers, and more effective advertising.
2 The right content that will deliver those objectives in terms of messages, visual appeal, relevance and refresh rate.
3 The positioning and placement of digital displays that will maximise the exposure of the different digital media to viewers (for example, putting a screen dropped from the ceiling at the entrance of a retail store will be good for directions and perhaps special offers, but terrible for more dynamic content that requires customers to stop, stand and watch).
The logic is the same as that behind any form of marketing, namely that the correct use of the medium will get results – a good billboard is all about positioning, not the paper it is printed on.
Key steps to getting it right
The second step after getting the marketing positioning right is to choose the right technology. IBM has developed a reference architecture for dynamic media solutions with an emphasis on modular components and open IT standards. The reference architecture identifies the key components in a dynamic media solution.
While there may be a lot of focus on the final devices displaying the content, the key parts of an overall solution are the:
1 Management of content
2 Delivery of content over a network to the final devices
3 Workflow around campaign planning, content creation and approval
4 Interaction with key stakeholders inside and outside the company
Within the management of content there will be numerous interactions between content producers and within the organisation’s different planning departments. For dynamic media solutions to be fully exploited, these different interactions and workflows within the company and with external partners and suppliers need careful consideration and perhaps change. So there may be an additional need for greater IT enablement of the key stakeholders such as brand and product managers, marketing agencies and retail store management.
The actual components will differ according to the needs of each retailer or event organiser. A complex content management software system and a high speed IT network may be suitable for one organisation, while a simple content management over an existing low speed IT network would be suitable for another.
ON THE RECORD: “COMPANIES THAT ARE LED BY TECHNOLOGY WILL NOT BE AS SUCCESSFUL AS THOSE WHO THINK THROUGH THE FUNDAMENTALS OF HOW THE MEDIA WORKS, AND UNDERSTAND THEIR OBJECTIVES IN USING IT” – NIALL DUFFY
There are no simple answers, but there are straightforward approaches and, as with all forms of media, content will drive success. While it is unlikely that the train station or airport will replace the pub as a location for watching live football, we can certainly expect more new and interesting content coming to a screen near the delayed 5.45 p.m. to Paris Charles de Gaulle soon.
Note: Niall Duffy is a consultant within the IBM Global Services Digital Media group. He specialises in solutions covering the management and distribution of audio-visual content, known as digital content, with particular focus on broadcasting and the media-marketing function.
