DOOH-BIQUITOUS:
Seizing the Potential of a Prominent
Digital Place-based Medium
by

Gabrielle Houeix

A PROFESSIONAL THESI...
Abstract
This paper explores the emergence and interactive transformations of Digital Out-of-Home
in the context of the ev...
Attestation
Je, soussignée, Gabrielle Houeix

Elève du MS Médias,

certifie sur l’honneur que je n’ai rien plagié dans le ...
Acknowledgements
I would first like to express my sincere gratitude to my mentor, Denis Gaumondie, for his
continuous supp...
Table of Contents
ABSTRACT ..................................................................................................
Living in a Brave New Digital World
“In a time of drastic change, it is the learners who inherit the future. The learned
u...
Until the 1980s, media primarily consisted of print and analog broadcast models. More
precisely, mass media relied upon pu...
According to Robert G. Picard, “digitization is the process of changing content production,
storage, distribution and cons...
It is in this ecosystem of coexisting ‘new’ and ‘old’ media, that tradition and technology have
once again merged. As it h...
DOOH:
A Digital PlaceBased Medium
Is Born

- 10 -
A. SEIZING THE POWER OF DIGITAL
OUT-OF-HOME
They’re here, right in front of you, and all around you.
In subways, trains, t...
UNDERSTANDING DOOH
“One finds oneself faced with a plethora of choices for media placement and creativity in the
vast digi...
When asked to define Digital Out-of-Home in 2009, Kelsen claimed that “over time, digital
signage will be replaced by DOOH...
Looking at the DOOH market today, two types of networks can be discerned: those which
aim at targeting the largest possibl...
DOOH-BIQUITOUS
By incorporating both indoor and outdoor subcategories, DOOH is quickly becoming
ubiquitous, introducing it...
Kelsen’ segmentation has the advantage of bringing clarity and understanding to any type of
digital display encountered in...
Media companies, retailers, and other forward-thinking entrepreneurs, are currently leading a
large majority of DOOH netwo...
According to Jimmy Schaeffer, Digital Out-of-Home networks can serve four important
purposes25.
1. Commercial / Advertisin...
DOOH: AN ATTRACTIVE MEDIUM
To fully understand the drastic changes brought by digitization on the out-of-home sector, it
i...
Rates usually vary from $1.50 to $36.00 CPM impressions, depending on the venue’s location
and audience, the number of scr...
Additionally, DOOH is flexible, accessible, and provides “The Power of Place”28. The
diminishing effectiveness of traditio...
On top of being a more dynamic, effective and interactive way of displaying content, DOOH
is also a “greener” solution, wi...
For the smaller segment of the industry - digital billboards and signage - revenues have
increased from $1.14 billion in 2...
As of today, there are approximately 468 digital place-based networks across the country
deploying over one million screen...
B. DOOH: An Evolving Industry
“When looking at the societal acceptance of new mass communication technologies, three phase...
The following table aims illustrates the similar evolutionary path of the telephony and
Internet industries.

Just like th...
BUILDING INFRASTRUCTURE
In the late 1970s, hardware and more specifically display manufacturers became the first
pioneers ...
As TV sets are turning into regular commodities, display providers like SONY and Samsung
are longing for a true differenti...
Today, networks either use their own proprietary software or refer to ‘on premises’ or
‘Software as a Service’ (Saas) thir...
CREATING ADEQUATE CONTENT
“Hardware, installation, distribution, maintenance, and measurement are important parts
of the [...
imply viewership. Indeed, individuals are solicited by various messages on a daily basis, which
they have progressively le...
Another trend in content production consists of “day-parting”, a strategy used to schedule
various content based on specif...
Collard tells us that just like the second phase of the telephony industry, the display of too
many inapt messages could p...
FACING CHALLENGES
Despite overall growth and tremendous potential, the DOOH industry is still facing severe
challenges. It...
Several factors can explain this. First of all, DOOH networks suffer from an important level
of fragmentation. PQ media es...
On a national scale, this model implies the support of media buying agencies to the networks
for the sale of advertising s...
This characteristic of is both a blessing and a curse for emerging DOOH companies, since
increase in ad spend is often sur...
DOOH 2.0:
Taking the
Smart &
Interactive Path

- 38 -
A. The Other Place-based Medium
“We understand that the new rule is mobile first… Mobile first in everything 69”

Over the...
SMART PHONES, THE REMOTE CONTROLS OF OUR LIVES
Providing unseen levels of convergence between different information and
co...
In the United States alone, smart phone ownership has tripled since 2009 and Morgan
Stanley Research estimates that their ...
One just has to look at the official App store numbers from Apple. Over 425,000 mobile
apps have been developed in the pas...
Source: The comScore 2010 Mobile Year in Review, p.18 (February 2011)

The considerable development of wireless technology...
Like e-commerce before, mobile commerce is quickly becoming a multi-billion dollar
industry. The notion itself incorporate...
THE IMPORTANCE OF MOBILE LOCATION-BASED SERVICES

“Putting yourself in the world and the world in your palm”92
In the past...
Source: Berg Insight, March 2010, GPS and
Mobile Handsets – 4th Edition

Last year, Pew reported that only 4% of online US...
According to a 2010 Juniper Research forecast, mLBS could drive revenues superior to $12.7
billion by 201498. Most importa...
With the proliferation of location-based services, smart phones are progressively enabling
users to connect and share with...
B. SHAPING DOOH’S INTERACTIVE FUTURE
MAKING DOOH SMARTER VIA RICH USER EXPERIENCES
“We can’t have dumb signs anymore. They...
For the past decade or so, advertisers have had a difficult time knowing where to stand
amongst all of the new traffic lan...
The combination of these factors is increasingly propelling individuals into an era of greater
mobility and interactivity....
Gao, Rau and Salvendy have recently identified six components of interactivity which are
two-way

communication,

connecte...
The same system applies to Digital Out-of-Home. An ad running on a screen can invite the
viewer to call a specific number ...
The most ubiquitous form of mobile marketing: Short Message Service (SMS)
SMS is by far the most popular data application ...
Proximity-based Convergence115 via Bluetooth and internal WiFi network
This type of marketing can be defined as the “local...
mobile proximity marketing can greatly improve the overall customer experience – which is
the secret to achieving preferre...
Quick Response (QR) Codes
By the time you read this, you should have already encountered four of them. These colored
squar...
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium
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Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium

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A professional thesis Presented to the faculty of ESCP EUROPE in candidacy for the degree of Specialized Master in Media Management. (Fall 2011, summa cum laude)

This paper explores the emergence and interactive transformations of Digital Out-of-Home in the context of the ever-growing use of mobile technologies in North America.

Published in: Education, Technology

Transcript of "Digital Out-of-Home: Seizing the Potential of a Prominent Place-Based Digital Medium"

  1. 1. DOOH-BIQUITOUS: Seizing the Potential of a Prominent Digital Place-based Medium by Gabrielle Houeix A PROFESSIONAL THESIS PRESENTED TO THE FACULTY OF ESCP EUROPE IN CANDIDACY FOR THE DEGREE OF SPECIALIZED MASTER IN MEDIA MANAGEMENT Tutor: Ghislain Deslandes Supervisor: Denis Gaumondie NON-CONFIDENTIAL Fall 2011
  2. 2. Abstract This paper explores the emergence and interactive transformations of Digital Out-of-Home in the context of the ever-growing use of mobile technologies in North America. It develops a theoretical framework based on Jeff Collard’s study of the three evolutionary phases of digital signage and new mass communication technologies - infrastructure, content and context. By applying J. Collard’s approach to the Digital Out-of-Home industry, this thesis raises the following question: How is DOOH becoming a decisive ‘new medium’ in the current digital ecosystem? After providing an in-depth examination of Digital Out-of-Home and the industry’s current state, this paper addresses the medium’s recent interactive and ‘smart’ shift via a growing number of mobile innovations. It finally concludes that DOOH is stepping into the context phase of its technological evolution, and is therefore becoming a ‘new medium’, as described by Robert K. Logan in Understanding New Media: Extending Marshall McLuhan (2010). -2-
  3. 3. Attestation Je, soussignée, Gabrielle Houeix Elève du MS Médias, certifie sur l’honneur que je n’ai rien plagié dans le travail ci-joint, ce qui signifie que je suis le seul auteur de toutes les phrases dont le texte est composé. Toute phrase ayant un autre auteur que moi a été mise entre guillemets, avec indication explicite de sa source. Je suis consciente qu’en contrevenant à la présente règle je transgresse les principes académiques reconnus et m’expose aux sanctions qui seront prononcées par le conseil de discipline. J’atteste également que ce travail n’a jamais été présenté dans le cadre d’études antérieures à ESCP Europe. S’il s’agit d’un travail réalisé dans le cadre d’études effectuées en parallèle, je dois le préciser. Les propos tenus dans ce mémoire n’engagent que moi-même. Fait à San Francisco, Californie, le vendredi 14 octobre 2011 -3-
  4. 4. Acknowledgements I would first like to express my sincere gratitude to my mentor, Denis Gaumondie, for his continuous support and guidance during the research and writing of this paper. I truly salute his patience, enthusiasm, and knowledge of the DOOH industry. I also wish to thank my tutor, Ghislain Deslandes, for his encouragement and teachings during this academic year at ESCP Europe. This professional thesis would not have been possible without the help of Mr. Garry McGuire, Mr. David Bruce, Mr. Chuck Strottman, and my colleagues at RMG Networks. I sincerely wish to thank all of them for giving me the opportunity to work by their side for six months. This has truly been a decisive experience for me. I would also like to extend my thanks to Bob Martin at SeeSaw Networks for taking the time to discuss the current state of the DOOH industry with me. His kindness and insight were much appreciated. I owe my deepest gratitude to my friends Clara Darrason, Justine Evrard, Kyle Michel, Carol Coroniti, Tam Ho, Tim Ngo, Arthur Cassaignau, Valentine Oudard, Amandine Lalizou, Ambre Jarno, Nicolas de Saint-Meleuc, Brandon Powell and Mohit Daga for bearing with me during this time of study. I cherish their creativity, humor, and friendship. Most importantly, I wish to express my love and appreciation to my wonderful family for their understanding and endless attention. Last but not least, I would like to thank the entire cast and crew of Party Down, Community, and Arrested Development for keeping me entertained these past few months. I could not have completed this professional thesis without their invaluable support. -4-
  5. 5. Table of Contents ABSTRACT ............................................................................................................................................................................... 2 ATTESTATION ...................................................................................................................................................................... 3 ACKNOWLEDGEMENTS .................................................................................................................................................. 4 TABLE OF CONTENTS ...................................................................................................................................................... 5 Living in a Brave New Digital World............................................................................. 6 I. DOOH: A Digital Place-based Medium Is Born .................... 10 A. Seizing the Power of Digital Out-of-Home ............................................... 11 Understanding DOOH .......................................................................................................................12 DOOH-biquitous .................................................................................................................................15 DOOH: An Attractive Medium.........................................................................................................19 B. An Evolving Industry ................................................................................. 25 Building Infrastructure ........................................................................................................................27 Creating Adequate Content ................................................................................................................30 Facing Challenges .................................................................................................................................34 II. DOOH 2.0: Taking the Smart & Interactive Path............ 38 A. The Other Place-based Medium ............................................................... 39 Smart Phones: The Remote Controls of our Lives ..........................................................................40 The Importance of Mobile Location-Based Services ......................................................................45 B. Shaping DOOH’s Interactive Future ........................................................ 49 Making DOOH Smarter via Rich User Experiences ......................................................................49 Establishing Business Intelligence ......................................................................................................68 Paving the Way to Ubiquitous Computing .................................................................. 74 BIBLIOGRAPHY ................................................................................................................................... 79 APPENDIX I.......................................................................................................................................... 90 APPENDIX II ........................................................................................................................................ 93 -5-
  6. 6. Living in a Brave New Digital World “In a time of drastic change, it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exist.”1 During the past five hundred years, our world has witnessed the disruptive nature of five media revolutions2. From Gutenberg’s movable type to Intel’s first microprocessor, technological breakthroughs have always played a decisive role in the existence and predominance of media outlets. The printed press initially marked the birth of mass media, leading to the vast and rapid adoption of books. This invention later paved the way for the creation of new media channels such as posters, newspapers and magazines. Four centuries later, a “conversational” medium was introduced, emerging from a technology which could breach distance through sound. For the very first time, individuals began to experience realtime text and voice communications via the telegraph and the telephone. During the second half of the nineteenth century, recorded media expanded its scope from printing, to photography, sound, and film. Propelled by the harnessing of electricity, the fourth revolution allowed sounds and images to be sent through airwaves. Radio and television sets progressively made their way into people’s home. The latest revolution - the one happening now - has just begun. It is a digital media revolution, led by the birth and subsequent growth of the computer industry in the early seventies. Five hundred years, five media revolutions, all driven by technologies with capacities of storage and transmission. So why is the last one so special? What differentiates the digital media revolutions from its predecessors? To answer this question, one must first take a look at the transformations brought by digitization on traditional media channels. HOFFER E. (1973) in Reflections on the Human Condition, Harper & Row, p.22 The term “media revolution’ comes from various theoretical backgrounds and its meaning has often been the source of public and academic debates. Refer to G. Ruckriem’s transcript. 1 2 -6-
  7. 7. Until the 1980s, media primarily consisted of print and analog broadcast models. More precisely, mass media relied upon publishing (books, magazines, and newspapers), other print outlets (posters, pamphlets, and brochures), films (particularly motion pictures), electronic media (radio, television, and other associated types such as cable TV and DVDs) and outdoor (billboards, signs, and placards). It was this stable landscape that McLuhan studied. Just as “a light bulb creates an environment by its mere presence”, McLuhan believed that it was the characteristics of each medium - and not the content it carried – which should be the focus of study. Since then, this stable environment has undergone drastic changes and McLuhan’s theory is progressively mutating. Andrew L. Shapiro argues that the “emergence of new, digital technologies signals a potentially radical shift of who is in control of information, experience and resources”3. The digitization process, now almost five decades old, actually began with newspapers, magazines, and books before reaching the fields of television and audio production4. This transition caused severe repercussions on traditional mass media products. Today, nearly all recorded music has been digitized. The transition of satellite television and terrestrial networks to digital is nearly complete and has now reached the production and distribution of motion pictures. Similarly, the radio industry has also become a part of the digital age, with the emergence of satellite transmissions, Internet radio, and podcasting. The latest medium to undergo this process - “Out-of-Home” - will be our main focus of study. Yet, one cannot fairly assess the impact of a new medium without taking into consideration its ecosystem. Because the most significant change brought by the use of digital computer is not just the transformation of traditional or ‘old’ media, but also the emergence of new ones like the Internet, computer games, websites, blogs, social networks etc. The term ‘new media’ is frequently the subject of debate amongst scholars, and confusion often takes place when speaking of its relationship with digitization. Are they one and the same? Intrinsically linked? If not, then what distinguishes the technology from the medium itself? Andrew L. Shapiro (1999) cited in CROTEAU D., HOYNES W. (2003), Media Society: Industries, Images, and Audiences, Pine Forge Press, Third Edition Illustrated, 2003, p.322 4 PICARD R. G. (2011), “Mapping Digital Media: Digitization and Media Business Models” in Reference Series, Open Society Foundations, p.6 3 -7-
  8. 8. According to Robert G. Picard, “digitization is the process of changing content production, storage, distribution and consumption from an analog to a digital base. Its most important characteristic is that it changes these bases from physical form to binary electronic form”5. Quite simply, digitization is the underlying technology behind most devices used on a daily basis. It not only includes computers, media, and internet, but also cars, alarm clocks, microwaves, ATMs, and all types of industrial robotics. In this sense, digital technology operates as a backbone for various traditional media outlets. Ruckriem emphasizes this fact, arguing that “There is no medium without (tool) or technology. But it is not true of the contrary. Not every technology is necessarily a medium”6. Once this distinction has been made, we can now turn to new media. Manovich argues that “on one level, new media is old media that has been digitized” 7. If this is true, then what are the other existing levels? What makes new media, new? The answer actually lies within their intrinsic properties. Manovich identifies five “principles” of new media: numerical representation, modularity, automation, variability and transcoding8. To this list, R.K Logan adds his own set of characteristics. In his view, there are fourteen “messages” of new media, namely: two-way communication, ease of access to and dissemination of information, continuous learning, alignment and integration, community, portability and time-flexibility, convergence, interoperability, aggregation of content, variety and choice, the closing of the gap between producers and consumers of media, social collectivity and cooperation, remix culture and the transition from products to services9. Manovich and Logan’s research reveals that some of the characteristics identified can be applied to certain traditional media. However, the uniqueness of “new media” is that it incorporates them all. At last, Logan sheds light on a wise distinction, arguing that “the mass media bring together people who can share a common emotional space whereas the ‘new media’ bring together people who can share a common cognitive space”10. Ibid RUCKRIEM G., ANG-STEIN C., ERDMANN J.W. (2010), "Understanding Media Revolution: How Digitalization Is To Be Considered”, International Society for Cultural and Activity Research Summer School in Helsinki, Finland (May 23-25) and in Moscow, Russia (October 18-21). 7 MANOVICH, L. (2001) The Language of New Media. Cambridge, MA: The MIT Press, Illustrated Reprint, p.47 8 Ibid 9 LOGAN R. K. (2010), Understanding New Media: Extending Marshall McLuhan, Peter Lang, 2010, 389pp. 10 Ibid 5 6 -8-
  9. 9. It is in this ecosystem of coexisting ‘new’ and ‘old’ media, that tradition and technology have once again merged. As it had previously done so with other media, the digital wave has shaken the traditional Outdoor/Out-of-Home industry, giving birth to a complex and promising new medium: Digital Out-of-Home (DOOH). Urban landscapes across the world have indeed witnessed the recent proliferation of digital billboards and large LED screens, as well as the introduction of smaller digital video screens in public spaces. Despite being a niche market ten years ago, DOOH is quickly becoming a fundamental part of the mainstream media landscape. It is today one of the three fastest growing media channels and a billion dollar industry across the globe. However, it still remains an unfamiliar and often misunderstood media channel. What consists of DOOH? How does it work? Why are advertisers getting deeper into the space? What are its main challenges and limitations? Where does the consumer fit into all of this? What are the prospects of such a medium? These are all legitimate questions that this paper will try to answer. But most importantly, this research will try to understand how DOOH is becoming a decisive ‘new medium’ in the current digital ecosystem. The main objective is to demonstrate that DOOH is not only a medium that has been “digitized”, but also a medium which is progressively becoming “new”, as understood and elaborated by Logan in Understanding New Media: Extending Marshall McLuhan (2010). Primarily focusing on the North American market, the study will first investigate DOOH as an emerging medium and provide a clear portrayal of the industry’s current state. It will then expand its scope of research to address the undeniable role of technological innovations in the medium’s interactive and intelligent future. -9-
  10. 10. DOOH: A Digital PlaceBased Medium Is Born - 10 -
  11. 11. A. SEIZING THE POWER OF DIGITAL OUT-OF-HOME They’re here, right in front of you, and all around you. In subways, trains, taxis, airplanes, roadsides, supermarkets, cafés, gyms, doctor’s offices, elevators, gas stations, pharmacies, hotels, hospitals, school campuses, bars, restaurants, bus shelters, cinemas, banks… and even in the downstairs lobby of ESCP Europe! It is an undeniable fact: screens are popping up everywhere, and at an unstoppable pace. But until recently, no unique term could describe this phenomenon. As a matter of fact, thirty claimed to do so11. From “Dynamic Digital Display”, to “Out-of-Home TV”, “Screen Media”, “Captive Audience TV”, and even “Dynamic Display Engagement Media”, the industry has been faced with a plethora of terms to choose from. For a while, “digital signage” seemed to have resolved this lack of consensus. Yet, recent growth and increasing attention in the medium has led to the adoption of “DOOH”, an acronym for Digital Outof-Home. Despite all expectations, DOOH – haunted by the ghost of Homer Simpson’s D’Oh – has managed to rise to the top of the industry’s extensive glossary and seems to be here to stay. So what exactly is DOOH? According to Jimmy Schaeffer, there are at least thirty different terms used to describe DOOH within the industry. SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) p.2 11 - 11 -
  12. 12. UNDERSTANDING DOOH “One finds oneself faced with a plethora of choices for media placement and creativity in the vast digital landscape of information and advertising. Whether an agency, creative production facility, brand or media conglomerate, one must consider the latest installment, digital signage or Digital Out-of-Home”12. Digital Out-of-Home can simply be defined as any digital signage that is running content and/or advertising in a public space13. This can range from seatback screens in airplanes, to bright billboards in Times Square, and everything digital in between. Industry specialist Lyle Bunn provides a more detailed account of the medium, describing it as “a network of digital, electronic displays that are centrally managed and individually addressable for display of text, animated, or video messages for advertising, information, entertainment and merchandising to targeted audiences”14. Though players in the industry are still struggling to reach a definitional consensus, one thing now remains certain: DOOH is a split medium 15. In other words, it is an ‘umbrella’ term, which encompasses different subcategories. Many industry experts distinguish DOOH according to whether or not the medium is adsupported. Keith Kelsen, author of Unleashing the Power of Digital Signage, believes that there is a clear distinction to be made between ad-based networks (which he calls DOOH) and nonad-based network (which he calls digital signage). In this sense, digital signage is a term applied to networks that are funded “by internal communications or operational budgets for patron, visitor, staff, student, or community communications”16. DOOH, on the other hand, is advertising that has basically been assigned from the “Out-of-Home” budget. Therefore, these networks operate solely on a for-profit basis. KELSEN, K. (2010) Unleashing the Power of Digital Signage: Content Strategies for the 5th Screen, Focal Press, p.1 3M|GTG & The Centre for Future Studies (February 2011): “Up Front and Personal: Digital Out-of-Home Communications. The future is Here and Now…” 14 Lyle BUNN quoted in SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) p.5-6 15 “Is DOOH really one medium? Research suggests it’s split” Screenmediamag.com (August 17, 2011) 16 BUNN, L. (2009) White Paper “SWOT Analysis North American Digital Signage/ Digital Out-of-Home (DS/DOOH) Industry” (November 2009) 12 13 - 12 -
  13. 13. When asked to define Digital Out-of-Home in 2009, Kelsen claimed that “over time, digital signage will be replaced by DOOH in relationship to ad-based networks, whereas corporate communication and in-store networks will continue to refer to the industry as digital signage”17. Janice L. Litvinoff18 also shares this view, emphasizing the fact that DOOH is a unique crossroad between advertising, digital signage and traditional out-of-home19. Yet this segmentation is not entirely satisfying. Mike Cearly argues, “even ‘non-advertising’based platforms are grey, at best, in inherently being an advertising platform” 20. Cearly also believes that DOOH should be looked at from a “simple lense”, meaning it ought to be considered as nothing more than the addition of a digital display to an Out-of-Home installation21. This concept is what Bob Martin, Vice President of Business Development at SeeSaw Networks, calls “tradigital”, and can simply be understood as traditional out-of-home advertising that has been digitized. “Tradigital” is another word for static billboard posters and backlit signs displaying ads in high traffic areas using digital technology. The main industry players in this category are JCDecaux, Clear Channel Outdoor and CBS Outdoor. However, “tradigital” is only one segment of the Digital Out-of-Home industry. VACKEY, B. (2009) “Defining DOOH” Digitalsignagetoday.com (October 20, 2009) General Manager of the Digital Media Systems Business Unit at Cisco System, San Francisco. 19 VACKEY, B. (2009) “Defining DOOH” Digitalsignagetoday.com (October 20, 2009) 20 CEARLEY, M. “The Simple Difference Between DOOH & IOOH” 11thscreen.com (April 14, 2010) 21 CEARLEY, M. “DOOH, Duh, or Huh?” 11thscreen.com (January 22, 2010) 17 18 - 13 -
  14. 14. Looking at the DOOH market today, two types of networks can be discerned: those which aim at targeting the largest possible audience (digital signage/billboards – “tradigital”) and those whose task is to execute real-time and specific campaigns (digital location-based media). The 2011 Kinetic Worldwide report also echoes this trend, predicting that by 2020, the industry will be split into a broadcast and a targeted segment22. DOOH can therefore be understood and analyzed as the combination of digital signage / billboards and digital location-based media. 1. Digital Place-based networks provide digital video screens with specific programming in various out-of-home locations to serve targeted audiences. These high-traffic venues include retail (convenient stores, groceries and malls), cinema (lobby screens and onscreen advertising before the movie), office (corporate elevators and lobbies, point-ofcare locations, convention centers), transit (airport and in-flight, buses and shelters, gas stations, subways, taxis, trains, travel centers) and entertainment (bars, restaurants, cafes, campuses, stadium and arenas, health clubs etc.) 2. Digital Billboards and Signage mostly advertise instantly-changeable content through LED or LCD-equipped screens to target relevant audiences at different times during the day. These screens can be found at roadsides (buildings, highways, tourist attractions), in transit hubs, entertainment venues, and retail areas. This category of DOOH is often thought of as a “glance medium”, often showing static advertising in places with limited dwell time. Kinetic Worldwide (2011) “On the Threshold of Change –The Future of Out of Home Media in the UK: The industry, consumers and technology to 2020” p.65 22 - 14 -
  15. 15. DOOH-BIQUITOUS By incorporating both indoor and outdoor subcategories, DOOH is quickly becoming ubiquitous, introducing itself in many areas outside of our home environment. In his book, Keith Kelsen argues that DOOH operates in three types networks: Point-of-Sale, Point-ofTransit and Point-of-Wait23. - Point-of-Sale (POS) networks - also called Point-of-Purchase (POP) - are digital signage located in retail areas, anywhere close to a product or a service for sale. This type of network triggers immediate call-to-action, since the consumer is already on his path to purchase. - Point-of-Transit (POT) networks can usually be found where people are on the move. They primarily consist of digital billboards, signs and displays located in transit hubs (airports, trains and subway stations, gas stations), near highways, busy streets, or inside vehicles like trains, buses and taxis. - Point-of-Wait (POW) networks aim at targeting consumers during dwell time. These screens usually entertain people when they are in line at the bank, the post-office, the grocery store, or waiting for their morning coffee. They can also be found in elevators, in the backseat of taxicabs, in buses or train, in point-of-care areas, in drive-through lines and in gyms. KELSEN, K. (2010) Unleashing the Power of Digital Signage: Content Strategies for the 5th Screen, Focal Press, USA, pp.243 23 - 15 -
  16. 16. Kelsen’ segmentation has the advantage of bringing clarity and understanding to any type of digital display encountered in public spaces throughout the day. Recently, one of the industry’s leading websites - DigitalSignageToday.com – has created an infographic showing the pervasiveness of the medium24. 24 HALL, C “Digital Signage: It's all around us [Infographic]” DigitalSignageToday.com (June 23, 2011) - 16 -
  17. 17. Media companies, retailers, and other forward-thinking entrepreneurs, are currently leading a large majority of DOOH networks. Their mission initially consists in the signing of media agreements with a variety of retailers (supermarket chains, auto dealerships), business locations (pharmacies, bars, gyms), and public areas (airports, train stations, concert venues). Once the screens are in place, the networks are in charge of providing appropriate and engaging content to specific audiences. Yet, depending on the business model in place and the size of the network, the DOOH industry brings together a large variety of players in its ecosystem, including software and hardware vendors, AV & system integrators, media rights owners, content services, sales teams, media planners and buyers, measurement firms and most importantly, viewers/consumers. Source: Explaining the DOOH eco-system in Albarq Digital’s “The Little Book of DOOH” - 17 -
  18. 18. According to Jimmy Schaeffer, Digital Out-of-Home networks can serve four important purposes25. 1. Commercial / Advertising primarily drives the overall industry. Advertisers are increasingly turning to DOOH to deliver hard to reach consumers along the path of purchase in specific locations for a fraction of the price of broadcast TV. 2. Informational content is mainly used in both public and internal spaces to display a mix of corporate messages from news, to weather, health and safety announcements. 3. Brand-oriented messages run within stores and retail areas to enhance brand awareness and identity. 4. Behavioral content is used to increase the consumer’s dwell time inside a store. By presenting a “captive audience” with relevant and attractive content, it can be tempted to look at other products or services offered by the store. 5. Experiential content is used to lessen the perceived dwell time in waiting areas, restaurants, post offices and grocery stores. As of today, networks primarily use their screens to drive sales, deliver product information or for brand-oriented purposes. Consequently, venue operators, consumers and advertisers alike can benefit from this process, making DOOH one of the most sought-after media. SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) pp.15-17 25 - 18 -
  19. 19. DOOH: AN ATTRACTIVE MEDIUM To fully understand the drastic changes brought by digitization on the out-of-home sector, it is necessary to distinguish DOOH from its analog counterpart: Traditional Out-of-Home. Common examples of TOOH include roadside bulletin billboards, bus advertising, lamppost banners, posters, wallscapes, bus shelters and mall displays. Traditional outdoor almost exclusively relies on static visual appeal, whereas DOOH displays are usually WiFi-enabled, integrate full HD video / audio capabilities or can provide additional interactive features such as touchscreen technology. This allows individuals to benefit from a much more dynamic and attractive content in the most contextually relevant moments: when they are on the path to purchase or experiencing dwell time. Unlike TOOH, DOOH is measurable and it delivers the right message, at the right time, in the right place, and to the right audience. One of the most valuable assets of DOOH is the fact that it is affordable, manageable, and it generates high Returns on Investments (ROI) and Returns on Objectives (ROO). Indeed, the increasing affordability of hardware - combined with the burgeoning of low-cost plasma, LCD and LED screens - has progressively allowed for greater practicality of digital displays. Installation and management costs have dropped in the past decade, and display contents can now be replaced anytime, and from any web-enabled computing device. The benefits of DOOH investments are quite obvious as well, considering that the initial fixed costs of hardware are negligible compared to annual sales figures. Nowadays, a company usually spends a few thousand dollars on a display installation, maintenance, content and execution, but then manages to achieve double- or triple-digit revenues. Indeed, a simple installation approximately costs $2,000 and can sometime generate more than $80,000 of ad revenue26. Additionally, the combination of message targeting and low cost per thousand (CPM) rates provide advertisers with high ROI and ROO. Depending on the venue’s location and audience, the number of screens & the spot length. PBT Consulting: Strategic Marketing, Business Planning, Research, Venture Capital and Financing (2011) “Magnaglobal: Global Digital Out-Of-Home Advertising To Double By 2016, And Ten Reasons Why It’s So Powerful” (January 29, 2011) 26 - 19 -
  20. 20. Rates usually vary from $1.50 to $36.00 CPM impressions, depending on the venue’s location and audience, the number of screens, the spot length etc. Captive audiences and dwell time strongly impact CPMs – higher dwell time automatically results in higher CPMs. In 2010, DOOH provided the lowest CPM entry point ($1.50) over the other media 27. Source: PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 DOOH can also provide measurability and targeting. To track those returns on investments, the industry has started to collect metrics by combining existing technologies - such as mobile, Internet and point-of-sale - with digital out-of-home. This integration has enabled the measurement of response rates, used by media companies to sell advertising spots at a higher CPM rate. According to Lyle Bunn, this data should reflect the “Four Domain of Metrics”, which represents the number of viewers, their opinion, the audience interaction and the calls to action. 27 UCOB Ventures, Official Website “What is DOOH?” - 20 -
  21. 21. Additionally, DOOH is flexible, accessible, and provides “The Power of Place”28. The diminishing effectiveness of traditional media channels such as television, radio and traditional press, has strongly impacted retail advertising. Nowadays, consumers can easily turn-off ads, either via DVRs, satellite radio, MP3 players, or pop-up blockers. With digital out-of-home, advertisers benefit from “The Power of Place” and retailers can customize and edit their messages on a daily basis to efficiently target their consumers. DOOH has the ability to display a decisive message at the right moment, also known as the “First Moment of Truth” (FMOT). This concept, developed by Procter & Gamble (P&G) in 2005, describes the 3-7 seconds right after a consumer first comes across a product. “Procter & Gamble Co. believes shoppers make up their mind about a product in about the time it takes to read this [sentence]."29 During this short lapse of time, marketers have the greatest chance of turning an observer into a buyer. With DOOH, advertisers can also target “captive audiences” when they are in elevators, waiting areas, exercising at the gym, commuting, or when they are out potentially making a purchase. DOOH can also provide connectivity between the displayer and its audience. As we mentioned previously, the digital medium primarily differs from its analog counterpart because it combines video / audio and wireless amongst many other capabilities. This feature makes DOOH an important medium in the sense that it captures audience’s attention far more efficiently. After all, it is part of our human nature to instinctively react to motion! Considering the fact that the average American adult is exposed to approximately 625 advertising messages a day, DOOH can become an effective way to stand out from the current visual ad clutter30. The medium considerably improves consumer experience, thus providing advertisers with superior brand awareness and fulfilled objectives. The most critical aspect of this connectivity is perhaps the progressive acceptance of DOOH by audiences, now increasingly familiarized to seeing digital displays out of their home environment. Expression coined by Suzanne La Forgia, Former President of OVAB (now DPAA) at the Strategy Institute DOOH Investor Conference 29 GERBA, B (2005) “Using in-store advertising to win the First Moment of Truth (FMOT)” Wirespring.com (October 10, 2005) 30 MUTSCHLER, A.S. “Digital Signage Breaks Through Clutter” EmbeddedIntel.com 28 - 21 -
  22. 22. On top of being a more dynamic, effective and interactive way of displaying content, DOOH is also a “greener” solution, with the ability to recycle over 99.5% of technology components31. The current US outdoor advertising industry counts over 450,000 national billboard locations and generates over 10,000 tons of fabric waste each year 32. It is no surprise that the production of billboards and posters requires not only a considerable amount of paper, but also a variety of materials, including “inks, chemicals, adhesives, solvents, packaging, transportation, delivery and then the disposal and recycling of old posters”33. DOOH can help reduce deforestation, as the paper industry is still the fourth largest contributor of worldwide carbon emissions. One may ask if the energy resources used to power digital displays really outweigh those required for TOOH. According to a 2008 independent “from warehouse to warehouse” study commissioned by MediaZest34, digital signage consumes 7.5% less carbon than traditional poster signage 35. It is not a huge difference, but display manufacturers are currently seeking new ways to reduce the consumption power of screens. Kirt Yanke, director of product Development at NEC Display solutions claimed, "Long term, we are going to look at other technologies that can be used for LCD backlights that can allow us to be more efficient […] anyone can make a high brightness display that can be three times as bright with three times the power. We want to be able to look at technology that would allow us to have three times the brightness but maybe only a 20-30 percent increase in power36". All the factors mentioned above greatly contribute to the recent popularity of DOOH as a growing communications medium. Various market research and forecast released in the past months attest this positive stature. PQ Media reports that global revenues for digital placebased networks have grown from $5.56 billion in 2009 to $6.47 billion in 2010. This represents a 16.3% increase, which is projected to grow an additional 16.9% in 2011. 31PBT Consulting: Strategic Marketing, Business Planning, Research, Venture Capital and Financing (2011) “Magnaglobal: Global Digital Out-Of-Home Advertising To Double By 2016, And Ten Reasons Why It’s So Powerful” (January 29, 2011) 32EnKad Sciences Official Website, “Billboard Recycling Project” 33 KELSEN, K. (2010) Unleashing the Power of Digital Signage: Content Strategies for the 5th Screen, Focal Press, USA, p.7 34 Study co-sponsored by CISCO and Panasonic and carried out by ROI-Team and Brunel University 35 PR Release – MediaZest, “Digital Signage;; A sustainable advantage” 36 VACKEY, B. (2008) “Is digital signage a green business?” Digitalsignagetoday.com (September 2, 2008) - 22 -
  23. 23. For the smaller segment of the industry - digital billboards and signage - revenues have increased from $1.14 billion in 2009 to $1.41 in 2010 (+ 23.2%), and are expected to reach $1.74 billion in 2011 (+23.1%)37. The US has maintained its position as the biggest global market in 2010, with a 15.1% growth in operator revenue, amounting to $2.07 billion. Source: PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 Last year, DOOH accounted for about 30.7% of all US out-of-home revenues and the Digital Place-based Advertising Association (DPAA) claimed it was the fastest-growing medium in North America. With over 24.5% growth in advertising revenue, the medium surpassed spot TV (24.2%), radio (18.6%) and Internet advertising (9.9%) 38. Source: PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 37 38 PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 SAAS, E (2011) “Digital OOH Media Revs Soar 24.5% in 2010” MediaPost.com (April 5, 2011) - 23 -
  24. 24. As of today, there are approximately 468 digital place-based networks across the country deploying over one million screens nationally. There are also about 4,000 digital billboards and signage across the country managed by 114 operators39. The percentage of businesses willing to deploy digital signage in less than three months’ time is also on the rise, with over 24% growth compared to 2009. Finally, a recent survey by GfK MRI shows that 61% of US adults see Place-based digital ads each month, and 64% of them show interest in this type of marketing communication40. Despite the United States’ predominance in the sector, China still remains the fastest growing DOOH market worldwide. According to PQ Media, the country is also expected to take the US’s leading position by 2015. As for Europe, the United Kingdom takes the lead, with over £117 million in revenues for 2010, followed by Germany and France41. According to Screen Digest, ad spending on DOOH in Europe is projected to reach €500 million by 2014, which represents about 9% of the total out-of-home budget. These numbers don’t lie. There is a real promising future for DOOH. However, the industry is still evolving. It is quite complex, fragile and needs to overcome considerable challenges to prosper and reach overall acceptance. PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 SAAS, E (2011) “Digital OOH Media Revs Soar 24.5% in 2010” MediaPost.com (April 5, 2011) 41 “German DOOH market, in the strictest sense of the term (i.e. excluding cinema) is historically well ahead of the French market. Digital out of home revenues in 2010 were 40 – 50% higher in Germany than they were in France.” “PQ Media Publishes European DOOH Market Figures – But Do They Know What They’re Talking About?” in OOH-TV.com (May 23, 2011) 39 40 - 24 -
  25. 25. B. DOOH: An Evolving Industry “When looking at the societal acceptance of new mass communication technologies, three phases become apparent: infrastructure, content, context. […] each with their own set of priorities, issues, competitors and customers”42 The expansion and acceptance of DOOH is progressively changing the way people communicate and interact with the information surrounding them. By integrating sound, audio, flat display and wireless broadband technologies, digital signage is undoubtedly becoming a sought-after communications tool for pioneering companies. Yet, with every emerging technology, it is often difficult to distinguish true potential from industry hype. In order to explain the current state of the DOOH industry and truly grasp future opportunities, Jeff Collard, President of Omnivex Corporation, suggests looking at the three evolutionary phases of technological advances: infrastructure, content and context. This, he believes, will help us understand in which phase digital signage technology is currently in, and eventually provide a “framework for considering realistic expectations, which strategies to consider and when to begin adoption”43. Using the example of the telephony industry and the Internet, Collard reveals how two prominent mass-communication technologies have reached societal acceptance by focusing on infrastructure through content to context. 42 43 COLLARD, J. (May 2010) “The Evolution of Digital Signage” Ibid - 25 -
  26. 26. The following table aims illustrates the similar evolutionary path of the telephony and Internet industries. Just like the telephone, the radio, the television and the World Wide Web before its prime time, digital signage is an emerging mass-communication technology on its way to reaching societal acceptance. As a matter of fact, radio and television – along with traditional outdoor billboards - were the first media to build the foundations of digital signage. They were later followed by the widespread adoption of the Internet and the proliferation of digital devices and content - 26 -
  27. 27. BUILDING INFRASTRUCTURE In the late 1970s, hardware and more specifically display manufacturers became the first pioneers of digital signage. Combining TV and VCR technologies, the initial industry software allowed for the repetition of video loops in closed-circuit TV networks. Fashion houses in New York City were the first to make use of this equipment, taking the footage recorded at their runway shows and playing it continuously inside their boutiques. In 1984, Canadian food retailers Loblaws placed screens in front of employees and shoppers alike to both instruct and boost sales. Soon after, television sets were progressively introduced in bars, restaurants and clinic waiting rooms. The main objective was always to take the TV experience outside of the home environment. However, the barriers to entry were quite significant back then, considering the high cost of display technology and the cost of deploying multiple zones. Size and bandwidth restrictions, as well as the lack of screen readability, reliability and graphical performance were also major challenges for the industry at the time44. It was not until the end of the nineties that these barriers slowly disappeared. Enhanced by digital technology and considerable innovations in customer electronics, digital media and flat monitors grew considerably. As screens became much more affordable and available, forward-thinking media companies began to place screens in front of reliable audiences wherever they deemed necessary: elevators, gas stations, taxis, lounges etc. Flat digital panels started replacing traditional billboards, posters and signs in a variety of locations, while outdoor agencies began to expand their advertising offer to transit locations, airports, kiosks, bus shelters, malls etc. Additionally, the development of satellite television progressively enabled the display of live content instead of pre-recorded loops. The parallel adoptions of high-end displays and internet connectivity have greatly contributed to the efficient delivery and display of DOOH content. Today, solutions are affordable enough to allow for a convergence of these two technologies. Ibid. At the time, digital signage screens were quite small – between 10 and 20 inches – and therefore often failed to engage audiences. 44 - 27 -
  28. 28. As TV sets are turning into regular commodities, display providers like SONY and Samsung are longing for a true differentiation. The emergence of smart televisions has triggered a new need for computing platforms on TV screens. DOOH has embraced this need, combining these two technologies in a cost-effective manner and on a large scale. Screens are now popping up (almost) everywhere. Available in every imaginable size, they can take the shape of scrolling message boards, plasma displays, LCDs and LED displays, electronic billboards, projection screens, round screens and images on Windows, electronic paper and selfilluminating digital paper45. More recently, developments in multimedia technology have led to the growing adoption of touch- or interactive screens in public spaces. Currently, network operators are continuously investing in infrastructure, which is projected to reach $1.4 billion in 201346. Current projections reveal that the two million media players installed worldwide will rise exponentially to approximately 8 million by 2015 47. However, these displays are only the visible surface of the medium. Screens would be useless without the critical support of software. PCs and laptops are of course the most basic systems used to gather, store, organize and display content. They are nevertheless often limited in terms of storage capacity. Larger and more experienced DOOH networks are now using much more powerful servers to achieve complex tasks such as managing thousands of screens at once, or running diverse content across locations. Many networks have had the tendency to concentrate their efforts on the entire value chain framework - from infrastructure, content production, technical development, media supply to marketing and sale. This has often distracted them from entirely focusing on the sale of media space. Recently, these networks have either outsourced their IT branches, or adopted third-party software solutions. According to Brian Dusho, EVP and CSO of BroadSign International, “digital signage operators are increasingly gravitating towards becoming ‘lean and mean’ media companies rather than being a technology provider” 48. 45SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) p.17-21 46 ZHU, L. “Digital Out-Of-Home, Global Revolution On The Go” HollywoodandWall.com (July 3, 2011) 47MUTSCHLER, A.S. “Digital Signage Breaks Through Clutter” EmbeddedIntel.com 48 DUSHO, B. (2008) “Grow Your Digital Signage Business, not Overhead: How a SaaS Solution Can Help” Sponsored by BroadSign International - 28 -
  29. 29. Today, networks either use their own proprietary software or refer to ‘on premises’ or ‘Software as a Service’ (Saas) third-party solutions. On-premises software is a CRM application that is hosted at a client’s location and managed by its own employees whereas SaaS is directly accessible via the Internet. Undoubtedly, DOOH infrastructure is no different from computers, DVD players, external hard drives, printers, and scanners. It also has its fair share of cables, players, transceivers, input and output devices. Hence, to facilitate the deployment and management of digital displays, networks are progressively implementing the installation of entirely wireless components to their systems. With the rising speed of 4G data, cellular technology is increasingly becoming “affordable, reliable, secure and flexible” 49. This new system also turns initial licensing costs into monthly fees, allowing network to save up on IT infrastructure, hardware, personnel and bandwidth. This shift towards wireless connectivity echoes the first phase of the Internet’s evolution. However, the current cost of SaaS is still quite high and is often considered to be as expensive as a self-hosted solution in the end. Overall, capital costs for DOOH networks have been halved over the past six years, to $3,72050. Source: WireSpring, The 2010 Digital Signage Pricing Report With more than a million screens and digital displays deployed in the last decade, the DOOH industry is still trying to consolidate and simplify its infrastructure. It is an ongoing process, fueled by advancements in connectivity and progress in customer electronics. THOMPSON, S. (2011) “Three Benefits of Using Cellular Wireless Digital Signage Networks”, Sponsored by Walsh Vision 50 WireSpring’s 2010 Digital Signage Pricing Report Research Findings 49 - 29 -
  30. 30. CREATING ADEQUATE CONTENT “Hardware, installation, distribution, maintenance, and measurement are important parts of the [Digital Signage] puzzle. Nonetheless, the true driving force behind today’s digital signage is the content that is shown on the screens. This, then, becomes both a blessing and a bane51”. According to Jimmy Schaeffler, finding adequate content for networks is crucial to the industry’s survival. In fact, many argue that the real difference between Audio/Video and DOOH technologies is the content factor. In North America, annual investments in the creation of content climbed to $3.5 billion in 2010, and approximately 8.8 million spots are produced each year52. Schaeffer argues that if the message is thought and created in accordance to the audience and the location, then the industry can thrive and reach unparalleled levels of creativity. However, if the content fails to attract and engage the viewer’s attention, DOOH could potentially suffer from irreparable damages, severely compromising its growth. After all, possessing the most advanced digital screen means absolutely nothing if the content displayed is both dull and lifeless. Though advertising purposes are the main driving forces behind the industry’s revenue stream, DOOH networks have been trying to maintain a sustainable balance between editorial and commercial content. In this sense, DOOH is quite similar to other adsupported media. Would you turn on your TV if there were only ads playing? Would you still read a newspaper if every page was an ad? Would you listen to music on Spotify if the songs were replaced by local ads? Probably not. Well, it is the same reasoning with DOOH. Phil Lenger has emphasized this fact, claiming that “digital networks are only effective and valued by the viewer when ads and content support each other and when the content and programming strategy respects the audience”53. One of the industry’s first identity crisis stemmed from the realization that having content displayed on a screen did not necessarily 51SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) p.113 52 BUNN, L. (2010) “Content is gaining ‘stride’ and growing fast” 53 LENGER, P. (2009) “Opinion: Fable of Content” Adweek.com (March 23, 2009 - 30 -
  31. 31. imply viewership. Indeed, individuals are solicited by various messages on a daily basis, which they have progressively learned to ignore – unless, of course, they consider the content to be relevant. In this sense, “the efficacy of the medium is entirely dependent of the content”54. Nowadays, content strategy mainly relies on context and average dwell time. For locations with little wait time -when individuals are just moving past the ads - the content is often “tradigital”, combining both traditional and computer-based techniques. For locations with higher dwell time, the content strategy is decisive, since the need to entertain the audience is much more important. At the earlier stages of the industry, the lack of specifically tailored content led DOOH agencies to use those of other media outlets like television, print, and the Internet. Yet, this strategy resulted from a certain misconception of the medium itself, since DOOH is not television, nor a newspaper, nor a personal computer. Trying to fill a screen with another content is both unappealing and, of course, incompatible in terms of format/length. For instance, showing a twenty-five minute sitcom in a taxicab when the average dwell time is 13 minute is completely ineffective! Another important realization was that the quality of content was strongly correlated to the advertisers’ budgets. Simply put, the better the content, the higher the CPMs. It quickly became clear that the industry’s next objective was to create what Richard Slawsky calls “sticky” content, one that “gives its intended audience a reason to take a glance, and another, and another”55. To do so, networks progressively started to display customized feeds from data providers to supply the viewer with relevant, informational content. In both public and internal spaces, digital displays began to broadcast a mix of corporate messages, news, weather, health, and safety announcements. Companies began to take key factors into consideration, such as location, type of network, time of day as well as audience demographics, behavioral and emotional patterns within the space. Networks also targeted audience by defining the average viewer, why is he/she in this location, how did he/she got here, what did he/she did prior and what he/she will do after. The more data networks gather about their audience and their location, the richer the content will be. Rob Gorrie President of AdCentricity, interviewed by Phil Cohen on November 9, 2010 R. (2010) “Effective Content for Digital Out-of-Home Advertising’, Sponsored by Key West Technology. 54 55SLASKY, - 31 -
  32. 32. Another trend in content production consists of “day-parting”, a strategy used to schedule various content based on specific hours and days of the week. Just like the television’s prime time or the radio’s drive time, digital displays can also segment their schedules to match the ever-changing interests and attitudes of their audiences throughout the day. Dayparting allows the user to benefit from dynamic messages that are both insightful and time-relevant. It also allows company to benefit from maximum DOOH ROI. Creating playlist in advance is also widely commonplace. But just like dayparting, this strategy is determined by time and location not so much by actual data. The production of content has come a long way since the early days of DOOH. It is now quite diversified, serves multiple purposes and can incorporate of mix of stills, animations, video, audio logos, texts and objects. The industry has also given itself a few guiding principles in terms of screen definition, dwell time and length of segments. Source: WireSpring, The 2010 Digital Signage Pricing Report However, creating value-added content on different networks is still a high priority for the industry, which is often struggling to meet its objectives in term of audience engagement. While the technology is solidifying itself, content creation remains fragile. - 32 -
  33. 33. Collard tells us that just like the second phase of the telephony industry, the display of too many inapt messages could potentially reduce DOOH’s effectiveness. This will propel viewers to take control over what they wish to see. Just like viewers expect control over messages they get from television (via DVRs), cell phones (via caller ID and voicemail) and from the Internet (ad blocking software), they will want it when encountering DOOH in public spaces. Currently, the industry is taking its first steps in the third phase of the evolutionary process: context. This transition is driven by the converging wave of the media ecosystem and the considerable development of user-centric experiences. In other words, content is king, but context rules. - 33 -
  34. 34. FACING CHALLENGES Despite overall growth and tremendous potential, the DOOH industry is still facing severe challenges. It is, after all, an emerging media seeking a bigger share of the national advertising budget. Nowadays, brands and marketers are still dedicating the large majority of their ad budget to mainstream media portals and internet advertising. As the infographic below reveals, media agencies are dedicating approximately $31 billion (6.7%) of their total ad budget to outdoor56. PQ Media claimed that DOOH only accounted for 31% of the total outdoor budget in 2010. This means that DOOH only makes up for $9.6 billion total, which is just 2% of the total media agencies’ budget! Source: PQ Media Global Digital Out-ofHome Media Forecast 2011-2015 Source: Mashable.com Infographic 2011 DOOH is not an appointment media like certain traditional media (TV, Newspaper) but an imperative one. DOOH is not an opt-in media and unlike TV, mobile, cable, internet etc. the consumer does not invest in the intercept. This makes it very hard for DOOH to compete with other media for national advertising budgets. WAANANEN, L. “How Agencies Are Spending Online Media Budgets [INFOGRAPHIC]” Mashable.com (June 9, 2011) 56 - 34 -
  35. 35. Several factors can explain this. First of all, DOOH networks suffer from an important level of fragmentation. PQ media estimates that only one out of ten networks in the United States is earning over ten million dollars in annual ad sales revenue 57. To prosper, the industry therefore needs to achieve consolidation via a growing number of mergers and acquisitions. Stuart Armstrong, President of EnQii North America argues that “There are companies that have developed specific niches that have become valuable on the hardware, software, and the network sides of the business, but they are undercapitalized and we are likely to see mergers and acquisitions of those companies. I believe that we are going to see a huge increase in the amount of consolidation within the next twelve to eighteen months that I think will be very positive for the industry”58. Industry leaders like RMG Networks have understood this imperative. In the past year and a half, the company has achieved over three important acquisitions and now operates one of the largest place-based video advertising networks in the country, with over 130,000 display screens59. Consolidation is key to secure of the industry’s future growth. The industry is also struggling to adapt itself to different types of business models. Nowadays, companies are usually focusing their models on four different approaches: reach and frequency, dwell time, vertical dominance (owning a market of interest – e.g fitness clubs, in-flight entertainment, cinema etc.) and recency (“First -or last- moment of truth” at the point-of-sale).Yet according to Nate Nead, ad-based digital networks can be external, internal or hybrid60. - An external business model relies on the simple fact that host venues agree to the deployment of digital signage within their facilities. This is a system which solely benefits the operator of the screens, not the venues themselves. - A hybrid business model can be deployed on a local or national scale and usually involves the network operator, the host venue, the advertisers and the media buyers. PQ Media Global Digital Out-of-Home Media Forecast 2011-2015 “Strategy Institute 5th Annual Digital Signage Investor Conference” ScreenMediaDaily.com (Oct 12, 2010) 59 RMG Networks Official Website “About Us” 60 NEAD, N. “Ad Networks in DOOH” Deploid.com (June 30, 2011) 57 58 - 35 -
  36. 36. On a national scale, this model implies the support of media buying agencies to the networks for the sale of advertising segments. This allows for a strict separation of competences between networks and agencies. Jimmy Schaeffer calls it “Leasing Advertising Space” and explains that the “controlling stakeholder asks the third-party suppliers of advertising to pay for some or all of the system. […] The rationale behind this third-party pay-for-all system is typically that both parties will share in the benefits of the system […] from better branding to sales uplift, to success in calling consumers to action”61. On a local scale, there is the “advertising swap model”, where operators persuade certain venues and location by ad swapping on their network. Nate Nead illustrates this well, claiming that “in the case of a local network, a venue would be able to advertise at the barber shop, dentist, lube center, and doughnut shop in exchange for having the barber’s dentist’s, lube center’s and doughnut shop’s ad on their screens as well” 62. This is often problematic since local networks don’t always own space and the concept of “screensharing” creates conflicts. - An internal business model is completely independent from advertisers. This model only relies on the owner’s wish to refine its branding and to target consumers at the point-ofsale63. Most importantly, the DOOH industry currently suffers from a lack of standardized metrics. Nowadays, media buyers will choose to buy DOOH if the industry uses a common terminology. As Bob Martin claimed in 2008, “Ad sales are not where they should be because of the disconnect in the metrics that the various networks are delivering […] No one speaks the same language or the right language to the audience on the agency side"64. The Digital Place-based Advertising Association (DPAA) is currently trying to implement audience metrics guidelines for the industry. In 2010, DOOH provided the lowest CPM entry point ($1.50) over the other media65. SCHAEFFLER, J. (2008), Digital Signage: Software, Networks, Advertising, and Displays. A Primer for Understanding the Business, Focal Press, USA (April 21, 2008) p.177 62 NEAD, N. “Ad Networks in DOOH” Deploid.com (June 30, 2011) 63 Ibid 64 VACKEY, B. “Research key to providing DOOH audience metrics” DigitalSignageToday.com (12.18.2008) 65 UCOB Ventures Official Website: “What is DOOH?” 61 - 36 -
  37. 37. This characteristic of is both a blessing and a curse for emerging DOOH companies, since increase in ad spend is often surpassed by inventory growth, thus keeping CPMs and overall network revenues low. Achieving standardized audience measurement to compete with other media is still far from becoming a reality and currently remains one of the industry’s greatest challenges. Despite these apparent challenges, the DOOH industry is stepping into what Patrick Quinn calls the “Breakout” phase. According to him, there are three important time segments when it comes to successful new media like Digital Out-of-Home. From 2003 until 2008, the industry was living in a “Gold Rush” age in which many players benefited from a rather profitable economic context. Then came the “Shakeout” phase (2008-2011), resulting from severe cutbacks in commerce and within agencies themselves. Many DOOH agencies disappeared at that time. As Stuart Armstrong argues, “There are companies that have not bridged themselves through this period where we have seen a drought of available capital. Those companies have either gone out of business or they’re about to go out of business” 66. Quinn believes that "This is actually a good thing as it will defragment the industry and create a landscape of strong operators offering better scale, more relevant content and cohesive metrics”67. The last phase - “Breakout” – will emerge after 2011, when the industry is expected to achieve its consolidation. “This is, of course, if the industry can weather strong economic headwinds, technological shifts and changing consumer behaviors”68. “Strategy Institute 5th Annual Digital Signage Investor Conference” ScreenMediaDaily.com (Oct 12, 2010) PQ Media Official Website, Excerpt from “There’s No Place Like DOOH”, Special Advertising Section To Adweek, Brandweek and Mediaweek (Nov 18, 2009) 68 Ibid 66 67 - 37 -
  38. 38. DOOH 2.0: Taking the Smart & Interactive Path - 38 -
  39. 39. A. The Other Place-based Medium “We understand that the new rule is mobile first… Mobile first in everything 69” Over the past five years, the mobile universe has undergone radical changes and enhanced what is often called “convergence in your pocket”. It is an undeniable fact: we live in a mobile world, where devices have become the remote control to our lives. With an unprecedented growth in pace and influence, mobile technologies and especially smartphones are leading “the most dramatic behavior shift in history”70, emerging as the new mass distribution medium. The democratization of cellular phones – 5.3 billion mobile subscribers, making up an astounding 77 percent of the global population71 – has brought billions of individuals into a new era of convenience. The widespread penetration of such devices has also taken vast proportions across the world, with China and India currently leading the growth. Over the next five years, mobile device subscriptions are expected to hit 7.1 billion, according to Cisco72. This is primarily the result of groundbreaking research in cellular technologies, a powerful network, as well as a growing and changing consumer demand towards mobile Internet technology. Quote from Google Executive Chairman Eric Schmidt’s keynote speech at Mobile World Congress event in Barcelona, Spain on February 15, 2011. 70 TSIRULNIK, G. “Mary Meeker: Mobile driving most dramatic behavior transformation in history” MobileMarketer.com (February 11, 2011) 71 MobiThinking, “Global mobile statistics 2011” (July 2011) 72 BASENESE, L., “This is the Biggest Tech Trend Ever… and These 10 Stats Prove It” WallStreetDaily.com (June 20, 2011) 69 - 39 -
  40. 40. SMART PHONES, THE REMOTE CONTROLS OF OUR LIVES Providing unseen levels of convergence between different information and communication technologies (ICTs), cell phones have now become ‘smart’. Since the emergence of the first iPhone four years ago, mobile device technology has reached new heights in terms computing and connectivity. Offering consumers a wide range of new features – including large touch screens, WiFi access, GPS services, near unlimited use and downloads of applications, camera, video, and MP3 players – smart phones have become indispensable personal digital assistants (PDAs). On October 4, 2011, Apple launched the latest version of its iPhone, the 4S, along with a brand new personal assistant software: Siri. The impressive technology – which Apple calls “intelligent assistant” - can listen to voice commands, search the Web, look for online services, and even provide answers 73! Washington Post technology contributor Joshua Topolsky recalls his recent interaction with Siri74: Me: “Schedule an appointment with Jack for 3:30 p.m.” Siri: “Okay, here’s your meeting. Note that you already have a meeting that overlaps with this. Should I schedule it anyway?” Me: “Change the time.” Siri: “Okay, Joshua, what’s the new time and date for this meeting?” Source: Siri software - Cultofmac.com Scan the code for the official Siri demo! People are increasingly replacing feature phones with these new devices that have the display, speed, memory and browser to fully experience “surfing”. Worldwide sales are expected to hit 468 million this year and reach $1.1 billion by 2015 according to Gartner 75. 73LOHR, S. “Siri and Apple’s Future” Bits Blog, NYTimes.com (October 5, 2011) J. “Apple Siri: The Next Big Revolution In How We Interact With Gadgets?” WashingtonPost.com (October 5, 2011) 75MCGLAUN, S., “Android to own 49% of smartphone market by end of 2012” SlashGear.com (April 7, 2011) 74TOPOLSKY, - 40 -
  41. 41. In the United States alone, smart phone ownership has tripled since 2009 and Morgan Stanley Research estimates that their sale will exceed those of PCs in 2012 76. As of today, more American adults own a smart phone than a degree 77. S o u Source: Business Insights, Gartner Samsung 201178 Source: 2010 Morgan Stanley Internet Trends For the very first time, the initial purpose of phones - making calls - has been undermined. Anytime, anywhere, and with just one click, users can now surf the web, text, send emails, work, read the news, play games, shop, video chat, listen to their favorite album, check their Facebook messages, download an app, update their Twitter feed or log in to Foursquare. The possibilities are endless. Sixty percent of time spent on smart phones is a new activity for users79 Source: KPCB “Top Ten Mobile Internet Trends” (2011) MEEKER, M., DEVITT, S., WU, L., “Internet Trends” for Morgan Stanley Research, CM Summit – New York City (June 7, 2010) 77 KESSLER, S. “More U.S. Adults Own a Smartphone Than Have a Degree” Mashable.com (July 11, 2011) 78 TAKASHASHI, D., “Samsung offers a peek into mobile trends of the future” VentureBeat.com (March 23, 2011) 79 MURPHY, M., MEEKER, M. “Top 10 Mobile Internet Trends” for Kleiner Perkins Caufield & Byers (February 2, 2011) 76 - 41 -
  42. 42. One just has to look at the official App store numbers from Apple. Over 425,000 mobile apps have been developed in the past four years, with a total number of downloads reaching 14 billion on the site80. IDC expects 182.7 billion mobile apps downloads across all platforms by 201581. As technological advances in mobile web browsers are happening at a very fast pace, it is safe to say that “this is only the beginning of the explosion of mobile services and applications; an even bigger boom will occur when many of these apps will be written for the mobile web instead”82. In the United States, this growth of mobile media consumption via the mobile web or apps can mainly be explained by the ever-growing adoption of 3G/4G-enabled phones as well as the omnipresence of various unlimited data plans83. The impact of such devices on productivity as well as personal and professional accessibility is considerable. More than ever, smart phones are changing the rules of communication and human interaction, with the invaluable support of social networks. Hundreds of millions of individuals use social networks like Facebook, Twitter, Youtube, Flickr and LinkedIn on a daily basis to stay connected with each other. According to research firm ComScore, Americans now spend one of every six minutes online using a social network, up from one of every twelve minutes in 200784. The importance of these networks is considerable and indisputable, and their move to mobile is only natural. Indeed, both mediums are now firmly entrenched, since instant social features have accelerated the use of mobile phones and vice-versa. In December 2010, social networking was the fastest growing mobile content category in both Europe and the US. This increase is primarily driven by Facebook, which grew over 120% in both regions 85. Sixty-five million Facebook users update their profile and community from mobile devices, and spend as much time on the social site as PC users do. ETHERINGTON, D. “15B downloads for Apple’s App Store” Gigaom.com (July 7, 2011) KIM, R. “The iPhone Effect: How Apple’s phone changed everything” Gigaom.com (June 29, 2011) 82 HOLMQUIST, L.E., “The Age of the Mobile Mash-up”, TechCrunch.com (May 29th, 2010) 83 ANONYMOUS “Close to Half of US Mobile Subscribers Use Mobile Media” MarketingCharts.com (February 23, 2011)From December 2009 to December 2010, the percentage of mobile phone subscribers with unlimited data plans increased from 21.3 percent to 29 percent, with more phones now requiring an unlimited data plan subscription at the time of purchase. 84 BAZILIAN, E. “One Out of Every Six Minutes Online Is Spent Social Networking. So much for the death of Facebook” Adweek.com (June 16, 2011) 85 ComScore, The 2010 Mobile Year in Review (February 2011) p.18 80 81 - 42 -
  43. 43. Source: The comScore 2010 Mobile Year in Review, p.18 (February 2011) The considerable development of wireless technology – WiFi, Bluetooth, GSM, QR Code and recently NFC - has also enabled businesses to build stronger ties with their target audiences via proximity marketing. Creating business and connecting people via mobile apps and the mobile web has become the latest trend. Gartner predicts that global mobile ad revenue will reach $3.3 billion at the end of the year, compared to $1.6 billion in 2010 86. Marketers have realized the necessity to embrace this side of their business, and a recent study conducted by digital marketing firm 360i has revealed that mobile ad campaigns were more impactful than online ones in terms of brand awareness, as well as brand favorability and purchase intent87. Source: Dynamic Logic Market Norms for Online. A good example of this recent trend is the successful advertising platform provided by music discovery app ‘Shazam’. With over 125 million users, the mobile application has presented international brands like Disney, Procter & Gamble or Starbucks with a unique way to reach and engage with their customers. According to a recent company press release, “27% of the people who Shazam’d the ad either shopped, downloaded the song featured in the ad or viewed additional content”88. RAMAN, S. “Five Campaigns Changing The Game Of Mobile Advertising” FierceMobileContent.com (September 7, 2011) 87 Ibid 86 - 43 -
  44. 44. Like e-commerce before, mobile commerce is quickly becoming a multi-billion dollar industry. The notion itself incorporates a large variety of financial activities that consumers engage in using their mobile phones. Two categories can be found in mCommerce: mobile banking and mobile payments. For mobile banking, the phone is used as a way to access financial services, whereas for mobile payments, the phone is used as a payment device in itself. Mobile phone owners are increasingly using their cell to go online and purchase physical and digital products. According to 2011 Experian Study, approximately 59% of US consumers use their phone to shop from home and the most popular mobile shopping activity is checking prices (24%)89. The total value of worldwide mobile payments is expected to quadruple from $170 billion in 2010 to $630 billion in 2014 90. The rise of mCommerce is mainly the outcome of transparent pricing, discounts, instant gratifications as well as location-based services91. It is safe to say that developments in the mobile world are now moving at a much greater pace than those in the desktop world. Technology has turned the cell-phone into a smart and indispensable medium, therefore bringing to light a plethora of powerful and innovative applications and services. This smart trend, combined with recent developments in positioning technologies, is leading to the ever-growing adoption of various mobile Locationbased services Shazam Official Press Release, “Brands Lining Up to Integrate Shazam into their Ads!” in New York, NY (June 16, 2011) 89 BUTCHER, D. “Mobile Most Effective Medium For Initiating Dialogue With Consumers: Experian” MobileMarketer.com (March 31, 2011) 90 ZIELKE, B. “Why Your Business Needs a Mobile Commerce Strategy Now” Mashable.com (September 9, 2010) 91 MURPHY, M., MEEKER, M. “Top 10 Mobile Internet Trends” for Kleiner Perkins Caufield & Byers (February 2, 2011) 88 - 44 -
  45. 45. THE IMPORTANCE OF MOBILE LOCATION-BASED SERVICES “Putting yourself in the world and the world in your palm”92 In the past decade, cartography has immensely changed. Fueled by fast advancements in technology and new media platforms, geospatial research has gone from stationary and desktop-based, to mobile. This shift has led to the emergence of “mobile Location-Based Services” (mLBS), which can be defined as “wireless services which use the location of a handheld device to deliver applications exploiting pertinent geospatial information about a user’s surrounding environment, their proximity to other entities in space (such as people and places) and/or distant entities (for instance future destinations)”93. These services can include informational services, social networking, tracking and navigation assistance, emergency support and advertising. Location-based services and context-aware applications can be traced back to the fields of ubiquitous computing and HCI (Human Computer Interaction). First implemented over a decade ago, it took LBS a few years to reach a consolidation phase. Indeed, providing location-based services required using the adequate positioning technology, such as variations of triangulation, GPS and cell-ID technologies94. This took some time to implement, along with the collaboration of operators and networks, the adoption of GPS-enabled handsets and the establishments of viable business models. Recently, the potential for LBS has become a fact, propelled by the ubiquity of mobile wireless devices. According to recent forecasts by research firm Berg Insight, more than 960 million mobile handsets sold in 2014 will have integrated GPS-receivers95. MENG, L., ZIPF, A., REICHENBACHER, T. (2005) Map-based mobile services: theories, methods and implementations, Volume 1, Springer, Heidelberg, 2005 p.1 93 URQUHART, K., S. MILLER, CARTWRIGHT, W. (2003) quoted in WEALANDS, K., S. MILLER, et al. (2007). "User Assessment as Input for Useful Geospatial Representations within Mobile Location-Based Services.0" in Transactions in GIS, Volume 11, No. 2, pages 283-309 94 DHAR, S., VARSHNEY, U., “Challenges and Business Models for Mobile Location-based Services and Advertising” in Communications of the ACM, May 2011, Vol. 54, No. 5, pages 121 - 129 95 Berg Insight, GPS and Mobile Handsets, 4th Edition, LBS Research Series (March 2010) pp.127 92 - 45 -
  46. 46. Source: Berg Insight, March 2010, GPS and Mobile Handsets – 4th Edition Last year, Pew reported that only 4% of online US adults used mobile location-based services. In a year, this number has been multiplied by 7! As of today, more than 28% of US adults use their cell phone to access location-based directions and recommendations. The survey also reveals that 5% of cell owners use their device to “check-in” to places via geosocial services like Foursquare or Gowalla96. Source: The Pew Research Center's Internet & American Life Project, April 26 – May 22, 2011 Spring Tracking Survey. Nowadays, the mobile advertising market is starting to fully embrace the potential of mLBS, especially as it continues to exploit the various beneficial features of current devices portability, mobility, personalization, instant access, location and context-awareness. These characteristics have the ability to generate highly efficient advertising and greatly improve customer satisfaction. As Dahr and Varshney claim, “mobility and location-based services combined with context-aware advertising create opportunities for targeted marketing and revenue generation”97. ZICKUHR, K., SMITH, A. “28% of American adults use mobile and social location-based services” for The Pew Research Center's Internet & American Life Project, (September 6, 2011) 97 DHAR, S., VARSHNEY, U., “Challenges and Business Models for Mobile Location-based Services and Advertising” in Communications of the ACM, May 2011, Vol. 54, No. 5, pages 121 - 129 96 - 46 -
  47. 47. According to a 2010 Juniper Research forecast, mLBS could drive revenues superior to $12.7 billion by 201498. Most importantly, mobile location-based services offer a two way communication and interaction between the provider and the user. The cell phone owner provides his context (where he is and what he is looking for) which enables the service provider to deliver the appropriate request. According to Baumer, Panov and Raubal, mLBS have the capacity to achieve spatio-temporal tasks. Indeed, connecting an individual’s position to its immediate environment can provide real-time decision support99. The following table presents an overview of the available mLBS and their current applications. WAUTERS, R. “Mobile Location-Based Services Could Rake In $12.7 Billion By 2014: Report” TechCrunch.com (February 23, 2010) 99 BAUMER, B., PANOV, I., RAUBAL, M. (2007) “Decision Improvement Through Multi-Criteria Strategies in Mobile Location-Based Services” in Geospatial Crossroads GI Forum: Proceedings of the First Geoinformatics Forum Salzburg (2007), pp. 17-25. 98 - 47 -
  48. 48. With the proliferation of location-based services, smart phones are progressively enabling users to connect and share with everyone, anytime, and anywhere. These recent transformations in smart mobile technology are creating a communication and cultural breakthrough which John Doerr calls “SoLoMo”100. More than ever, social and mobile are converging whilst providing location-based context to our everyday activities. Ten years ago, Kim JooHan – author of Phenomenology of Digital-Being – claimed that “Before computers, different types of information required different types of communication channel […] and also required distinctive methods for storage […] but now, with computers, we can store all kinds of information with a single digital medium. […] This means that the computer would be the primary medium for human communications in the very near future […] the medium called computer literally becomes an extension of our body”101. Today, smartphones have become this digital extension – the digital part of us. As Steve Jobs argued last year, “these phones are getting more and more intelligent about the world around them”102. They have become the means through which we see, understand and interact with our digital environment on a daily basis – including DOOH. When combined with mobile technology, DOOH becomes smart. It not only engages the viewer on a personal level via interactive content, but it also provides marketers with complete flexibility and measurable results. DOOH & mobile are becoming complementary place-based digital media, and their strengthening union is creating a revolutionary shift in the fields of communications and user-centric experiences. Welcome to DOOH 2.0. John Doerr is an American Venture Capitalist at Kleiner Perkins Caufield & Byers Ben Schott, New York Times journalist defines SoLoMo as a “Portmanteau term for the meeting of Social, Local and Mobile media”. 101 JOOHAN, K. "Phenomenology of Digital-Being." In Human Studies24 (2001): 87-111. 102 SARNO, D. “Steve Jobs unveils iPhone 4 — and its video calling feature”, latimes.com (June 8, 2010) 100 - 48 -
  49. 49. B. SHAPING DOOH’S INTERACTIVE FUTURE MAKING DOOH SMARTER VIA RICH USER EXPERIENCES “We can’t have dumb signs anymore. They’ve gotta be as smart, or smarter than what I have in my hand.”103 Perhaps one of the most striking aspects of digitization is the progressive blurring of boundaries between each medium. As Bolter and Grusin claim, “digital visual media can best be understood through the ways in which they honour, rival and revise linear-perspective painting, photography, film, television and print. No medium today, and certainly no single media event, seems to do its cultural work in isolation from other media, any more than it works in isolation from other social and economic forces”104. No medium is competing with another nor is performing solo anymore. In fact, all media interact as well as intra-act with each other. Similarly, consumers have recently started to consider media content as independent from its delivery device. Televisions, computers, smart phones and other mobile devices are now providing similar capabilities in terms of content delivery, thus giving users the ability to share similar experiences on various platforms and locations. This convergence is primarily enhanced by the development of interactive content. More and more, consumers are seeking smarter and improved devices that can help them to connect and communicate with their surroundings. Interactivity has become the new rallying cry for digital media industries looking for innovative, creative and efficient ways to engage with their audience. BERG, A. “Mobile Marketing: Outside the Box” WirelessWeek.com (July 23, 2011) J.D., GRUSIN, R. (2010) “The Double Logic of Remediation” in NAYAR, P. K. (2010) The New Media and Cybercultures Anthology, John Wiley and Sons, p. 49 103 104BOLTER, - 49 -
  50. 50. For the past decade or so, advertisers have had a difficult time knowing where to stand amongst all of the new traffic lanes built to improve the consumer’s way of life (social media, search engines, mobile platforms, location-based services etc.). Unable to anticipate the pace at which people began to adopt personal computing to run their professional and social lives, marketers were soon left with obsolete ways to reach them. Nowadays, they are finding new ways to ‘fit in’, via attractive new technologies and developments in interactive marketing. As Harvard Professor John A. Deighton and Leora Kornfeld claimed in 2007, “the shift from broadcasting to interaction within digital communities is moving the locus of control over meanings from marketer to consumer and rewarding more participatory, more sincere, and less directive marketing styles”105. The growth of digital place-based networks and digital signage, combined with the ubiquity and context-aware ability of smartphones, is consolidating this exact shift. According to Magna Global’s latest advertising revenue forecast, mobile and DOOH are currently the second and third fastest growing ad media categories in terms of ad revenue. Indeed, from 2011 to 2016, mobile ad spending is expected to rise at an annual growth rate of 19.4% and DOOH at one of 15.2%106. As both markets continue to expand in terms of scale and ability to reach elusive audiences, marketers are embracing the potential of associating them together by creating interactive campaigns. Source: MagnaGlobal, 2011 The starting point of this mobile/DOOH relationship is certainly the ever-growing number of people who spend time away from home. Kinetic’s 2010 research on the Moving World reveals that four major trends contribute to this phenomenon: urbanization, travel, leisure/shopping and technology. DEIGHTON, J.A., KORNFELD, L. (2007) “Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers”, Harvard Business School HBS Working Paper Number: 08-017 (September 28, 2007) 106 MagnaGlobal, 2011 Advertising Forecast Abbreviated 105 - 50 -
  51. 51. The combination of these factors is increasingly propelling individuals into an era of greater mobility and interactivity. The simple fact that shopping can be carried out whenever and whenever and is no longer restricted to the opening hours of a physical store is making DOOH even more attractive to advertisers. Mobile phones are becoming the primary decision-making devices which DOOH can trigger at a moment of maximum influence. In other words, marketers can seize the big screen to activate the little - more personal - one. “The distance between a person's mobile device, their heart, and their head is the length of their arm”107 claims Chris Rezendes, EVP at VDC Research. This is a considerable extension of what Kannan, Chang and Whinston called “ubiquitous interactivity” in 2001108. We are now stepping into a new phase of intelligent and ubiquitous interaction between mobile and DOOH. While DOOH is a "one-to-many" medium, the integration of mobile transforms it into a privileged "one-on-one" channel. The convergence between DOOH and mobile is increasing a viewer’s attention-span to a campaign. In other words, the mobile keeps the consumer in front of the screen for a longer period of time, thus reinforcing the displayed message. But how is this concretely implemented? Various methods of integration are currently shaping DOOH’s interactive future. Yet before we analyze them, it is necessary to define the term “interactivity” as it is academically understood today. Jensen describes it as a “measure of a medium’s potential ability to let the user exert an influence on the content and/or form of the mediated communication”109, whereas Deighton emphasizes the fact that it possesses the ability “to communicate with an individual […] and to gather and to remember [his/her] response”110. “Mobile Convergence Takes Center Stage at CETW” ScreenMediaDaily.com (November 14, 2010) KANNAN, CHANG and WHINSTON quoted in GAO, Q., RAU, P.P., SALVENDY, G. (2009) “Perception of Interactivity: Affects of Four Key Variables in Mobile Advertising” in International Journal of Human-Computer Interaction, Vol. 25, No. 6. (2009), pp. 479-505. 109 Ibid, definition by Jens F. Jensen 110 Ibid, definition by John A. Deighton 107 108 - 51 -
  52. 52. Gao, Rau and Salvendy have recently identified six components of interactivity which are two-way communication, connectedness, playfulness, synchronicity, interpersonal communication and user control111. DOOH networks are starting to weigh the importance of these key criteria in their goal to ensure a rich consumer experience and an overall successful campaign delivery. These networks are currently using different types of technologies to achieve this, including Dual Tone Multi Frequency, SMS, Bluetooth, WiFi, QR Codes, Near-Field Communication (NFC), Augmented Reality, Graphic Recognition etc. The ‘veteran’ of all existing methods: Dual Tone Multi Frequency (DTMF). Invented by AT&T in the 1950s, DTMF – also called Touch-Tone® - is the international standard for tones representing the different digits on a dial pad. If one presses a key on a phone, it triggers the matching DTMF tone for that specific key. The system can then deciphers the signal, understand which key was pressed, and therefore proceed with the dialing request. A common example of DTMF use is the activation of calling cards. To do so, a user is asked to follow specific steps dictated by an Interactive Voice Response (IVR). When asked to “please enter your mobile number followed by *”, he/she usually presses the required keys to complete his activation. GAO, Q., RAU, P.P., SALVENDY, G. (2009) “Perception of Interactivity: Affects of Four Key Variables in Mobile Advertising” in International Journal of Human-Computer Interaction, Vol. 25, No. 6. (2009), pp. 479-505 111 - 52 -
  53. 53. The same system applies to Digital Out-of-Home. An ad running on a screen can invite the viewer to call a specific number to interact with it. If the viewer decides to call, an IVR guides him on how to engage with the signage content. A great example of this is the Nike iD experience in Times Square conducted by interactive digital agency R/GA in April 2005112. Walking in front of the ad, passersby were invited to call the number on the sign, then use their phone’s keypad to customize different parts of the displayed Nike shoe. After sixty seconds, the user’s time would run out and he/she received a picture of their design to use as their phone’s wallpaper. Additionally, each participant received a special code and URL to purchase their design at any online or physical Nike Store. . Source: NikeiD - Interactive NikeiD Signage System (I.N.S.S.) 2005. To watch the campaign live in action, scan the following QR Code: DTMF is often considered to be a technology of the past and very few advertisers still use this method of integration. On the other hand, the use of Short Messaging Services (SMS) has skyrocketed. 112 NikeiD - Interactive NikeiD Signage System (I.N.S.S.), Concept Document - 53 -
  54. 54. The most ubiquitous form of mobile marketing: Short Message Service (SMS) SMS is by far the most popular data application in the world, with over 4.16 billion users (the internet only has 2 billion across all devices) and 6.1 trillion messages sent in 2010113. Since the widespread adoption of the technology in the early 2000s, SMS marketing has been on the rise all over the globe. It is a great method for DOOH advertisers looking to deploy large-scale campaigns reaching general audiences. It is also widely used to integrate with other forms of mobile. For instance, you can text a message to an ad on a big screen and automatically receive specific media content. Last year, retail giant Walmart launched a four-week DOOHSMS campaign across its “Smart Network” of place-based digital screens. The objective was to increase the number of shoppers participating to receive discounts and special promotions. Source: Walmart Smart Network / End Cap Detergent By making them dial in a specific code on their phone, consumers could show their coupon at the point of sale to collect their savings. The campaign resulted in a three-fold increase of daily opt-ins114! To watch a short video of the Walmart Smart Network Diagram, scan the QR Code on the side. STREICHER, P. (2011) “SMS, the most expensive yet also the most used data application” MyBroadband.co.za (May 10, 2011) 114 JONES, D. “Walmart Smoke and Mirrors?” DailyDooh.com (January 17, 2011) 113 - 54 -
  55. 55. Proximity-based Convergence115 via Bluetooth and internal WiFi network This type of marketing can be defined as the “localized wireless distribution of ad content associated with a particular place”116. In this definition, Bluetooth and WiFi are free mediums of transmission. They both have the ability to push content to broad range of mobile devices (smart or dumb), regardless of screen sizes and supported file formats. Although proximity marketing can push a variety of content to the consumer’s phone, one of the most common uses is the delivery of mobile coupons. Last year, Red Bull used the place-based digital network of over 1,400 Macs/Couche-Tard convenient stores in Canada to promote its power beverage. The coupon advertised on the screens – strategically located at the Point of Sale - offered two cans of Red Bull for $4. Picture Source: MobileMarketer.com As consumers waiting in line saw the call-to-action on the screens - “enable Bluetooth on your mobile phone to receive exclusive offers”- they had the opportunity to opt-in by activating Bluetooth on their device and receiving the mCoupon. According to Alex Romanov, President/CEO of iSign Media Corp117 in Toronto, these “advancements in mobile devices and digital signage, coupled with growing consumer acceptance of mobile marketing, are opening up key new opportunities for mobile-driven digital signage and affords a higher level of interactivity that didn’t exist before in public places […] That’s why GURLEY, S. (2010) “Converging Digital Signage and Mobile” in Media Planet, an independent supplement to USA Today (November 2010) 116 Definition of proximity marketing from adpodbroadcaster.co.uk 117 ISign is the largest single digital signage footprint in Canada, and No. 3 in North America, with about 5,600 signs reaching roughly 1.5 million customers each day. 115 - 55 -
  56. 56. mobile proximity marketing can greatly improve the overall customer experience – which is the secret to achieving preferred status for any retail brand”118. Another example of a successful campaign using WiFi and Bluetooth is the promotion of business travel application TripCase across RMG Networks’ Business Traveler Network and JC Decaux’s Out-of-Home media at JFK, LAX, ATL and SFO airports. The nine-week campaign’s objective was to increase downloads of the app across iPhone, Android and Blackberry phones in the most relevant context: airports. Here were the main guidelines: - Using Bluetooth: Business traveler spots DOOH display and is prompted with an “opt in/out” message (“Would you like to receive content from TripCase via Bluetooth?”) on phone. Upon selecting “YES,” he/she receives exclusive viral video with a comedic overview of the TripCase application. - Using Wi-fi: Business traveler spots DOOH display with Call-To-Action. Business Traveler connects to branded WiFi network (e.g. “TripCase WiFi”) and launches web browser. After directing browser to any webpage, rich media content for TripCase is available for viewing/downloading. The concept was both simple and very engaging, and the campaign enabled Tripcase to send content to nearly 30,000 unique mobile phones. Scan the following QR Code to watch the campaign live in action at SFO Airport. TSIRULNIK, G. “Red Bull proximity marketing campaign distributes mobile coupons via Bluetooth” MobileMarketer.com (January 31, 2011) 118 - 56 -
  57. 57. Quick Response (QR) Codes By the time you read this, you should have already encountered four of them. These colored squared pattern on a white background are called QR Codes and their rise is undeniable. From Q1 2010 to Q1 2011, their scans have increased by 4549% and 56% of them now appear on product packaging. Created in 1994 by Japanese company Denso Wave, these codes contain information encoded as text, URL, video etc. In the US, they have become a common marketing tool, integrated in both traditional and interactive campaigns across a large variety of media – including DOOH. By simply using a mobile phone and scanning one of the codes displayed on screens, a consumer can automatically be directed to an advertiser’s message. A recent study on mobile QR Codes conducted by comScore Inc revealed that in June 2011, over 14 million mobile users in the United States (6.2% of total mobile users) had scanned a code on their device. Among them, 58% did so from their home, while 39.4% did so from a retail store and 24.5% did so from a grocery store. Approximately 20% scanned one at work whereas 12.6% did so outside or on public transit119. Nowadays, getting additional product information and couponing are the most common motivations for using a QR Code. Other interesting business uses include app download, paperless tickets, real-time information, social media, real estate, mobile payments and loyalty programs120 Here are a few examples of how QR Codes can be used by DOOH networks: A few months ago, BBC One has included QR codes to its cooking program “The Good Cook” to give its viewers the recipe featured on the show. Picture source: Flickr, Dan Taylor “On-screen QR Code in BBC One's The Good Cook” 119 120 CHIASSON, G. “Who’s Scanning QR Codes?” DailyDooh.com (August 15, 2011) The Rise of QR Codes [Infographic], DigitalBuzz Blog (September 1, 2011) - 57 -

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