Daily DOOH The Future of Digital Signage in

Daily. DOOH The Future of Digital Signage in Retail and Public Environments Adrian J Cotterill n. Interim Executive and Industry Analyst Specialising in Digital Out of Home and Web 2. 0 n. Editor of the "Digital Out of Home Advertising Networks” directory currently published by The Screen http: //www. dailydooh. com/

Daily. DOOH n Definition of Digital Signage ¨ ¨ n Also Known As / Seen As “A network of displays that can be remotely managed and whose business model revolves around merchandising or advertising” ¨ Source: Frost & Sullivan ¨ ¨ ¨ ¨ n Network Types ¨ ¨ ¨ Self Financed / Branding ¨ Financed Through Advertising / Advertising Only ¨ Digital Out of Home In-Store TV Digital Screen Media Captive Audience Networks Retail Media Networks Screen Networks Narrowcasting Place Based Media Digital Street Furniture Video-enhanced Shopping Carts etc. Mixed / Hybrid ¨ 2

Daily. DOOH n Network Types ¨ Financed Through Advertising / Advertising Only ¨ n Self Financed / Branding ¨ n Mixed / Hybrid Typically Retailers (especially Retail Banks) etc. ¨ Often started life as ‘music’ networks ¨ Network used for music video, product marketing, own-branding, wayfinding etc ¨ Examples; Nike, Harrods, Footlocker, IKEA, Jyske Bank, National Lotteries, various Airports ¨ Financed Through Advertising / Advertising Only Typically the specialty of (new) third party businesses such as Avanti Screenmedia, Librium. TV, MDM. tv, Neo Advertising, POSTV, etc ¨ Networks like the “Pharmacy Channel(s)’ across Europe bring together niche retailers (very successfully) ¨ Self Financed / Branding n Mixed / Hybrid Thomson Travel Poster Network, jointly ‘owned’ by retailer and advertising network ‘wannabe’ ¨ Retailers and Retail Banks may go ‘hybrid’ if they can be convinced of ‘brand-fit’ ¨ 3

UK Market - Mid 2007 Based on number of venues High Impact Based on number of venues Captive Audience Based on number of venues Retail Based on number of venues 4

Daily. DOOH Real Estate Classifications Control Rooms Corporate Offices Rental / Staging Financial Exchanges University, College, School Studios Film Sets, TV Backdrops Government Buildings Highway Signs Theme Parks Race Tracks Casinos Retail Banks Corporate Reception Airports Areas Shopping Malls Stadiums Pub, Club, Bars Hotel Rooms and Lobbies Railway Stations Taxis, Trams, Buses Hair Salons Restaurants High Street Retailers Grocers Petrol Stations Hospital, Waiting Rooms, Surgeries Mobile Vans Outdoor ‘High Impact’ Billboards Mobile / Portable Screens Advertising Classifications 5

Daily. DOOH Benefits of Digital Signage n n n n Cost Reduction of POS (print and delivery) Instant customer “message - action“ Brand Enhancement; adds another dimension to customer experience during visit Time of day content targets specific types of customer (propensity to purchase) Centrally controlled campaign management tools Brand relevant “feel good’ editorial content Third party brand partnership activity (media revenue) 6

Daily. DOOH Tesco - Then and Now n Tesco. TV ¨ ¨ ¨ Initially Advertising Driven model (JC Decaux chosen to sell advertising space as if it were a billboard) Instrumental Media and Applied Television Group won contract to manage network Scala Software and Hughes Satellite Connectivity Common belief that wait-and-see attitude from other Grocers slowed down digital signage adoption by others across Europe Allegedly cost £ 30 Million to rollout to 100 stores n Tesco. Screens ¨ ¨ ¨ Managed now by Dunnhumby Focus on Trade Marketing Example £ 5 k for 2 x 5 second slots in every 5 minute loop RFP for technology, network, solutions etc. out shortly Now a “Self-Financed” model though Dunnhumby not averse to bringing in 3 rd party media sales revenue when ready (i. e will become a mixed / hybrid model) 7

Daily. DOOH Why It’s not TV n According to a draft study by Deloitte from the Grocery Manufacturers Association, the investment in in-store advertising has doubled since 2004 and is on pace for compound annual growth of 21% through 2010. n Conventional wisdom, backed by solid if not conclusive research, says that more than 70% of purchase decisions are made in-store. Yet despite that, in-store advertising still represents only 6% of marketing budget allocations, according to Deloitte n Marketing purists blame this anomaly on the lack of analytical data proving the efficacy of advertising at point-of-purchase. But how "proven" is traditional TV/radio/print, which still commands 35% of marketing budgets? n It's indisputably intuitive that a message delivered at point-of-purchase has the best chance to influence the desired behavior - getting the consumer to take the product off the shelf. n The latest and most expensive trend has been video screens along the store perimeter, at checkout, even in some aisles. A step forward, perhaps, but out-of-step with shopper behavior: Mass merchandise and supermarket consumers go shopping to shop, not to stop and be entertained n Shoppers are conditioned to move through stores, not to stop, look and listen. n Marc E. Babej and Tim Pollak are partners at Reason Inc. , a marketing-strategy consulting firm that works with clients in a range of categories, including media and entertainment, financial and professional services, packaged goods and the public sector 8

Daily. DOOH “IT'S NOT TV” People don't watch like they watch TV…. … I don't even use the term In-Store TV anymore because of the Connotations. Comparing traditional Mass Media with Digital Signage is like comparing a Greyhound Bus with a sports car. The Idea of ”Captive Audience" is a myth. If that were true, increased traffic would have to mean increased viewer ship. I can show that times of peak traffic are often NOT times of peak engagement. many times the exact opposite is true. Steve Yetsko, Director of Media Research Services at Video. Mining Corp. Think “Poster+” rather than “TV minus” Don Sperring Group Strategy Director JC Decaux “It strikes me that (this) … makes your screen look MORE like TV … which is fundamentally where you don’t want to be because your audience is not in a TV receptive place when they are encountering your screens” Alex Hughes Creative Director Amigo Digital 9

Daily. DOOH Note: Poor graphic quality due to Screen Shot 10

Daily. DOOH Success… A Clear Strategy and Vision n n Customer retail psychology Marketing communications Video graphic design Technology - AV/IT What Happens if the Vision is Not Thought Through? Screen Layout in Relation to Customer Purchasing Pattern n Screen Content n n Screens in the wrong places Content may be inappropriate for the retail locations Channel not a commercial success Where should the screens be placed? How many screens? What size? n n What content should go on screens? What’s the eye-on-screen dwell time? How long should content segments be? How should it be day-parted? What is the wear-out time? 11

Daily. DOOH Brand Content Mandates 1. Engaging - you can’t look away 2. Aware of the context - talk to me as if you are here 3. Compelling - you still can’t look away 4. Informative - tell me something I didn’t know until now 5. Containing a clear call to action - what do I do next? 6. Able to improve brand awareness - did the content make an impression? http: //screenvox. com/ 12

Daily. DOOH Dagobert’s 10 Rules of Content 1. Define your own magical triangle between promotion, entertainment and brand experience 2. Adopt a leading theme 3. Never forget that it is a furtive media 4. Open a dialogue with the customer 5. Create Interactivity 6. Structure the content with a single graphic code or by introducing
heterogeneous content with short jingles 7. Be explicit at any stage of the program 8. Create an efficient sequencing 9. Preserve yourself from text overloading 10. To promote an event, create a ‘cluster’ of animations Definitions of furtive on the Web: - http: //www. dagobert. fr/ Marked by quiet and caution and secrecy; taking pains to avoid 13 being observed; "a furtive manner";

Daily. DOOH Industry Problem n Content Delivery (is it Guaranteed? ) ¨ Compliance for Digital Signage and Screen Networks ¨ Relevance with regard customer habits, buying patterns, stock levels, time of day etc. n Most customers (Brands) need a Geographic Reach* not just local (countryspecific) implementations *For example across EMEA 14

Daily. DOOH Customer Problem n You have Screens 1, but can you guarantee… that they are turned on? ¨ that they are playing relevant content? ¨ n You have Content 2 but can you… target your customers by time of day or week or make seasonal variations? ¨ sell what you have, not what you think you have? ¨ sell more of what's selling not what's not selling? ¨ JML for example; typically 20 -25% are off at anyone time AND there is probably an equal number playing wrong (irrelevant) content versus what is in stock 1 European Research studies have shown that digital marketing and advertising consistently; shrink wastage, quickens turnaround for promotion to venue, decreases printed POS in-venue clutter, gives the ability to communicate multiple messages from one ‘poster’ site AND offers the possibility of 3 rd Party Advertising / Media Revenue (if desired) 2 15

Daily. DOOH Compliance - True Example Total Network A Network B Network C Any POS in Venue 58% 49% 69% 56% Participating in Promotion 1 59% 60% 64% 54% Gave Gamecard without Prompting 25% 23% 36% 16% Posters in Window 8% 6% 13% 6% Posters in Venue 34% 30% 38% 35% Show cards in Venue 41% 38% 47% 38% 4% 4% 3% 5% On-Screen Promotion 36% 26% 57% 26% Overall Display 24% 26% 23% Leaflets 1: This statistic is compiled from the number of venues that gave gamecard right away, number of venues that gave gamecard after asking and number of venues that had run out of gamecards. 16

Daily. DOOH Content Delivery Roadmap Note: Poor graphic quality due to Screen Shot 17

Daily. DOOH ni. Capture - Accurately captures, tracks and analyses faces in video images, generating real-time audience data ni. Tally - Embedded people counting device with built-in overhead camera, i. e Gross Footfall Number of screens: Number of venues: Footfall: Dwell time: Frequency of visit: 1, 015 203 1. 4 million till transactions per week 4. 5 minutes 3. 6 visits per week DOOHAN, Spar. TV Entry, May 2007 18

Daily. DOOH Why Will Digital Out of Home Be Successful? n Audience n Immediacy n Selling by day part n Uniqueness n Editorial Content n Interaction n Creativity Challenges to success n Accountability and Effectiveness n Creativity - the right treatment for the right screens 19

Daily. DOOH n The Daily. DOOH blog brings you Digital Out of Home Industry Analysis in Europe, Middle East and Africa acotterill@dailydooh. com http: //www. linkedin. com/in/aideycot n The Screen is the Out of Home digital signage industry association. It is based in London, with members in the UK, France, India, Israel, South Africa and the USA n http: //www. thescreen. org/ 20

Daily. DOOH 26 th August 2007 This Motion-activated (Flash-driven) interactive wall mural was in London’s Virgin Megastore at Piccadilly Circus for the last 4 weeks (it came down on Sunday so if you didn’t see it in person then you have missed it). The 20′x 8′ wall, project managed by the folks at Poster. Scope’s Hyperspace division showcases Adobe Creative Suite 3’s library of effects, including Illustrator, Photoshop, After Effects, and Flash. The murals are designed so that when a person walks from left to right more animations are triggered and the density of the imagery increases. It’s quite a clever way to do interactivity and I am sure will be repeated elsewhere (this Adobe creative was previously in New York). Interactive View and Obscura Digital (from the US) used an edgeless plasma wall (MPDP panels) to create the large window display and the Flash content respectively. I think there is a reason why all of the publicity shots were taken in the dark (in my opinion it does not look as good when in direct sunlight) http: //www. interactiveview. co. uk http: //www. obscuradigital. com/ 21

Daily. DOOH Music - Legalities (UK Example) n n n Phonographic Performance Limited ¨ PPL is a music industry organisation
collecting and distributing airplay and public performance royalties in the UK on behalf of over 3, 500 record companies and 40, 000 performers ¨ http: //www. ppluk. com/ Video Performance Limited ¨ VPL is the collecting society set up by the record industry in 1984 to grant licences to users of music videos, eg. broadcasters, programme-makers, video jukebox system suppliers ¨ http: //www. vpluk. com MCPS ¨ The MCPS-PRS Alliance is th home of the world's best songwriters, composers and music publishers ¨ http: //www. mcps-prs-alliance. co. uk 22