Executive Summary Fostered by their experiences via the web and on-demand TV, consumers in many countries have developed a seemingly insatiable desire for connectedness and ease-of-access to information and entertainment, anytime, anywhere. Web-savvy businesses are feeding on that desire and, as a result, are attracting billions of dollars away from traditional advertising budgets. However, out-of-home "push models" of impression-based advertising (as opposed to the web's "pull model" of intent-based search), depend on the frequency of a message and are therefore not much better than commercials on traditional TV. This fact is not helped by the growing indifference to push advertising and the fragmentation of media channels. This paper concludes that out-of-home signage applications will leverage a combination of the web together with mobile phone technology to achieve best-in-class interactivity. It also concludes that future digital out-of-home signage networks will be built on scalable, interactive web-based architectures rather than today's more typical passive narrowcast designs. As a result, the appropriate combination of narrowcast, web and mobile phone technology will enable businesses to benefit from their proximity to mobile consumers and enable them to deploy more effective out-of-home marketing.

1. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
The disruptive effect of the
Internet and mobile phones
on out-of-home digital media
By Bill Collins and Stephen Randall
Executive summary consumers. For example, there have
been several attempts to squeeze the
to as narrowcast networks or dynamic
digital display networks) in storefronts
Fostered by their experiences via the web and TV experience into a mobile and public spaces. The price erosion of
web and on-demand TV, consumers in phone’s 2” x 2” screen, but other than large format displays is leading to their
many countries have developed a helping to wow customers in the phone growing use as an out-of-home
seemingly insatiable desire for store, these strategies fail to provide a medium, especially in urban centers,
connectedness and ease-of-access to simple or compelling user experience. sports and entertainment venues, retail
information and entertainment, anytime, Lack of handset standardization and stores, medical settings, banks and
anywhere. poor interoperability have not helped. shopping malls.
Web-savvy businesses are feeding on The only ubiquitous mobile applications Wal-Mart, the world's biggest retailer,
that desire and, as a result, are regularly used by consumers are voice was one of the first retailers to
attracting billions of dollars away from and text messaging. recognize the potential of digital
traditional advertising budgets. Another approach is to reach signage by building its own in-store TV
But beyond the reach of the PC or TV, consumers where they shop, by network spanning more than 2,500 of
advertisers are struggling to create advertising on digital out-of-home its stores and reaching an audience of
measurable interactions with signage networks (sometimes referred more than 180 million viewers a month.
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2. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
web and to prevent being
Scenario 1: City Guide commoditized, digital signage network
vendors will need to offer advertisers
the option of a closed loop between
consumers and advertisers, even if they
continue to offer one-way TV-like
advertising for some of their
programming.
Although the kiosk vendors are better
placed to provide interactivity and
measurability, they are likely to face
competition from more flexible, scalable
web-based solutions.
In the coming years, as the web and
web-based behavior spreads beyond
the desktop, it is unlikely to do so in the
way we know it today. As with a PC’s
combination of screen (output),
keyboard (input) and network
connectivity (communications), a digital
signage network cannot provide a
similarly powerful closed loop without
offering a ubiquitous method of
interactivity between the user and the
system. In out-of-home settings, this
new interactivity is most likely to be
John is from out of town and hasn’t decided where to eat tonight. realized via the mobile phone, by using
He sees a large City Guide screen on the street corner, displaying the same voice and text messaging
capabilities that consumers use today.
details of a local map and playing short highlights of local
restaurants, bars, entertainment and tourist information. The screen
displays an invitation to be ‘remote controlled’ from a mobile phone. Out-of-home signage
John dials the number on the screen and hears a voice prompt on his
mobile phone say “Press the keys on your phone that correspond to
networks will have to
items of interest on the screen.” For example, he can press 1 on his become capable of
mobile phone keypad to see local restaurant options, or press 2 to more measurable and
see local bars. He can also use his * and # keys to zoom the map in
and out. He follows the on-screen prompts and browses to a local
interactive solutions.
French restaurant and likes their menu. He presses 0 and connects
This paper concludes that out-of-home
directly to the restaurant to reserve a table.
Source: LocaModa signage applications will leverage a
combination of the web together with
mobile phone technology to achieve
Wal-Mart charges advertisers on the promising signs of growth. Although
best-in-class interactivity.
network between $60,000 and kiosks can identify a user via a credit/
$293,000 to show an advertisement for debit card, ticket readers or by It also concludes that future digital out-
four weeks (Source: The Economist). requesting that a user type in details, of-home signage networks will be built
kiosks are challenged to provide web- on scalable, interactive web-based
However, out-of-home “push models”
like data-mining capability such as architectures rather than today’s more
of impression-based advertising (as
making offers to consumers based on typical passive narrowcast designs.
opposed to the web’s “pull model” of
intent-based search), depend on the similar users or their profiles. Kiosks As a result, the appropriate combination
frequency of a message and are are also less able to provide competitive of narrowcast, web and mobile phone
therefore not much better than solutions outdoors, in store windows or technology will enable businesses to
commercials on traditional TV. This fact in many-to-one applications. benefit from their proximity to mobile
is not helped by the growing consumers and enable them to deploy
For the same reason that TV is being
indifference to push advertising and the more effective out-of-home marketing.
disrupted by interactive technologies,
fragmentation of media channels. out-of-home signage networks that are
Consequently, more and more currently architected and programmed Background
advertisers are seeking measurable like TV networks will have to become We live in an on-demand media culture.
media and moving away from capable of more measurable and What was once a passive push-based
impression-based models. interactive solutions. screen medium on network and cable/
Kiosks are an out-of-home technology In order to provide data-mining satellite TV is now being fast forwarded
that is measurable and shows capabilities comparable to those on the on digital video recorders (DVRs) or
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3. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
consumed on websites such as advertisers waste $220 billion interactions with consumers beyond the
YouTube.com, iTunes or MySpace.com. worldwide, or just over half the $428 TV and PC.
We are evolving from a primarily “lean- billion worldwide advertising revenues Without an ability to connect their
back” TV experience (“The First Screen”) forecast for 2006 by businesses to mobile consumers, many
to a more active “lean forward” ZenithOptimedia, a market-research marketers are finding that their target
experience on a PC (“The Second firm. market might as well be on the dark
Screen”). side of the moon.
On this Second Screen, consumers are The appropriate While there is growing awareness
devouring, controlling and creating
content. They want instant gratification
combination of among marketers that the mobile phone
is “The Third Screen” after TV and Web,
and have come to expect it with the narrowcast, web and there is actually a fourth screen network
click of a mouse or a remote control.
And their expectations are not going to
mobile phone that touches the every day lives of many
mobile consumers: the out-of-home
stop at the couch or the desk. technology will enable digital signage network.
Gone are the days when marketers businesses to benefit The challenge is to find a cohesive
such as John Wanamaker would joke strategy that enables marketers to
“50% of advertising works; we just from their proximity to leverage the third and fourth screens as
don’t know which 50%.” Wanamaker, a mobile consumers. successfully as they have done to date
19th Century Philadelphia merchant, with the first and second screens.
became the first modern advertiser The disruption of traditional media is
when he bought space in newspapers challenging all businesses that depend Mobile phones - the means
to promote his stores. on advertising. But the promise of the
web is only the beginning of traditional
NOT the end
Wanamaker was ahead of his time.
Greg Stuart, CEO of the Interactive media’s problems. The media industry’s There are over 2 billion mobile phone
Advertising Bureau, estimates that next challenge is to create measurable subscribers in the world and over 200
million in the U.S. (Source: Ipsos
Scenario 2: Social Media Insight) far outstripping the 575 million
PCs in the world today (Source:
Forrester Research).
While some high-end mobile phones
(sometimes referred to as smart
phones, converged devices, PDA
phones or communicators) are
effectively PCs, they are neither
mainstream nor standardized devices.
IDC defines converged mobile devices as
mobile phones having a high-level
operating system, such as Symbian,
Windows Mobile, or embedded Linux.
Vendors are increasingly characterizing
these devices as "prosumer" (in other
words, professional tools rather than
consumer devices). According to IDC,
such devices represent less than 0.5%
of the 2 billion installed base of mobile
phones worldwide.
The media industry’s
next challenge is to
An internet-connected screen hanging on the wall of a bar in Miami create measurable
invites people to “Txt Out Loud” by sending text messages from their
mobile phones directly to that screen. There are similar screens in
interactions with
other locations all over the U.S. - an ice cream parlor in Boston, a café consumers beyond
in Chicago, a diner in Seattle, a club in Colorado. Shaun reaches for the TV and PC.
his mobile phone, enters the Screen ID, types his message and then
presses SEND. His message appears on the bar’s screen a few For just a moment, let’s suspend belief
seconds later. Shaun’s message also appears on a website where and assume that we all have “the
web-based users can view and send messages to any of the location- perfect mobile device.” What would
that be? For business users, it might be
based screens.
Source: LocaModa an email-centric device. For teenagers,
a social networking or IM-centric device.
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4. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
For other people, key features might It is easy to see that the one-size-fits- fragmented infrastructure and lack of
include music, videos, photos or all approach that works so well in the standards and resulting in a poor end-
games. Now consider that regardless PC market is much less likely to work user experience. Marketers attempting
of design, mobile phones should in the mobile phone market. There is to reach mobile consumers certainly
enable people to reach their favorite no perfect “Swiss Army” design for have their challenges.
features within 1-3 key presses. And, mobile phones. In order to reach the 2 billion mobile
of course, a mobile phone should also One would hope that mobile network devices, marketers should obviously
be an excellent voice-centric device, operators (e.g. Cingular, Verizon, Sprint/ leverage technology that works in a
which is pocketable, light and can run Nextel, T-Mobile in the U.S.) would offer majority of handsets and across a
for at least 24 hours without a recharge. seamless interoperability between majority of networks. They should not
multiple devices, services, applications be tempted to use less standardized
Marketers attempting and their networks. However, the mobile technologies.
t o re a c h m o b i l e operators’ ecosystem is still surprisingly Dialing numbers and text messaging are
immature. Mobile developers and
consumers certainly service aggregators work with different
already ubiquitous applications.
According to the CTIA Wireless
have their challenges. business models depending on the Association, there are over 400 Million
operator and country, leading to a text messages sent daily, and over 12
billion in the month of June 2006.
Scenario 3: Real Estate Combined with the appropriate
“connective tissue,” voice and text
messaging technologies already
available on a majority of phones can
be used to mobile-enable digital
signage networks and deliver web-like
interactivity and measurability to out-of-
home applications.
The insight is that today digital signage
networks are an underutilized location-
based technology. Ironically, as a
means of connectivity, a basic mobile
phone is already good enough for many
out-of-home marketing applications.
The insight is that
today, digital signage
networks are an
underutilized location-
based technology.
Jayne is looking for a new apartment. She sees an interesting Location, Location,
property on a screen in the window of a local real estate brokerage. Location
She wants more information on the property but the brokerage is
closed. The screen displays an invitation to be ‘remote controlled’ In the mobile phone industry, the idea of
using a location’s proximity to mobile
from a mobile phone. She dials the number on the screen and hears a
consumers is not new. An often-touted
voice prompt on her mobile phone say “Press the keys on your phone
but flawed vision of location-based
that correspond to properties that interest you.” For example, she services is one where mobile network
can press 3 on her mobile phone keypad to property number 3. She operators can target mobile consumers
can also use her * and # keys to browse to more pages of properties, in a specific cell, perhaps with an offer
view a map and search other areas – all viewed on her phone. She for a nearby restaurant or movie theatre.
follows the on-screen prompts and browses to a property she likes to But services delivered without the
see more detailed views and information. She presses 0 to be placed consent of the end-user foster distrust,
on a mailing list and request that the broker contacts her. The broker often resulting with users turning off
receives an email with Jayne’s request and is able to respond their phones.
immediately. Jayne could also continue her search on line by typing Thankfully, legislation in the form of the
her phone number into the realtor’s website. Her phone number is CAN-SPAM Act of 2003 is helping to
treated as a cookie, so the website can return her to properties that prevent this type of short-sighted
match her browsing history or preferences. approach from taking root. It is clear
Source: LocaModa
that successful mobile applications will
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5. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
give the consumer - not the mobile starting point in reaching mobile large format screens of 50 inches or
network operator - control over what, consumers is to rethink the notion of more. However they are
where, when and how they receive “location” in relation to trust, technology characteristically passive as far as the
information. capabilities and the end-user viewer is concerned and so are little
experience. better than TV, except that they are
Fortunately, we need not worry about
seeing web-like content on a screen Narrowcast screens are, by their very placed “outside.” If the consumer
barely larger than a Post-it® note as nature, connected to the Internet in cannot react to a specific marketing
there are other ways of reaching the order to “cast” content narrowly to a message when they are “in the
mobile consumer. One alternative specific location. They are typically moment,” another advertisement is
Table 1. Comparison between standard narrowcast signage, kiosks and mobile-
enabled narrowcast signage
Standard Narrowcast Signage Kiosks Mobile-enabled Narrowcast
Signage
Typical deployment cost ~$2,000+ ~$8,000+ ~$2,000+
per screen including PC Depends on screen size, inside or Depends on screen size, enclosure Depends on screen size, inside or
outside location. quality. Average cost of Kiosks in outside location.
U.S. is $8,300 (Source: Summit
Research)
Potential for closed-loop No Limited Always
between user, web and Only possible for systems with Systems are connected to the
business Internet connection and input Internet. Users connected via mobile
means for user (such as card swipe). phones. Interactions connected via
mobile gateway.
Data-mining ability N/A Limited Good/Inherent
Requires “disconnected” means Can measure number of “touches” Every call to system provides info
to evaluate effectiveness such as and transactions on system but on user interactions and captures
surveys, sales uplift etc. cannot get user info unless kiosk the user’s phone number which
has card reader or user provides it can be used as a cookie for
via keyboard. personalization.
Close loop targeting No Sometimes Yes
ability Passive screens have no way of Depends on application design. The user’s mobile phone number
responding to user interests. User required to enter data or and all interactions (key presses)
swipe a card. are captured.
Revenue Potential Advertising and Merchandising Commerce and limited Advertising, Merchandising,
only advertising Interactive Advertising and
Commerce
Ability to serve one user or One-to-many One-to-one One-to-one and One-to-many
many users simultaneously
Ability to reach Yes No Yes
audience beyond 10 feet
Assimilation and Good Unknown Good
retention of data Better than traditional advertising. Depends on whether the kiosk is At least as good as standard
(Source: InfoTrends) visible to audience when not in use. digital signage.
Requirement for retail Wall mounted Approx. 25 square feet Wall mounted
floor space Kiosks always occupy real estate
on the store floor and require more
floor space for the user interaction.
Requirement of Close or at a distance Close Close or at a distance
consumer to be close to The user is required to touch the The user can view and/or interact
display screen. with the screens either at a
distance or up close.
Support considerations Minimal - typically remote Requires on-site management Minimal - typically remote
managed Coin slots, card readers etc require managed
No moving parts. Nothing comes regular support. Fingerprints, wear No moving parts. Nothing comes
in contact with end-users. and tear, damage to touch screens in contact with end-users.
Diagnostics via network. need to be factored in. Diagnostics via network.
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6. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
likely to diminish the effect of the first
message, requiring the advertiser to
frequently reach the same consumer
with the same message.
The web is reinventing the rules of
engagement with its intent-based
model (i.e. when a user searches or
clicks on an item of interest, there is
clearly some level of interest in that
product, service or content). It is
becoming increasing valuable for a
business to be able to react to that
intent and/or to data-mine that user’s
interactions to improve their product/
service offering. This has been proven
with the creation of the “pay per click”
business model.
As more advertisers rely on data-mining
tools, platforms supporting their
campaigns will need to be capable of Figure 1. Bridging three disparate networks - mobile, narrowcast
interactivity. Networks unable to and web, creates a closed loop between mobile consumers and
support the interactive requirements of web-based business. The closed loop enables pull-based
top advertisers are likely to become marketing and the ability for businesses to data-mine mobile
marginalized. Out-of-home signage consumers’ interactions.
Source: LocaModa
networks will not be exempt and will
therefore need to be built on scalable,
interactive web-based architectures
Sometimes these
operational costs.
kiosks also cut
Control freaks
rather than today’s more typical passive In Steven Spielberg’s film, Minority
narrowcast designs. Kiosks often use bar-codes or RFID Report, personalized interactive
tags to identify a user’s ticket or advertisements are pushed ad infinitum
product. More typically, the kiosk
Networks unable to network cannot identify the user without
to the Tom Cruise character from
screens in a future shopping mall.
support the interactive the user swiping their credit, debit or
However, it’s important to understand
store card into the machine, or by
requirements of top typing in personal details. These that the future of out-of-home screen
advertisers are likely to interactions often create additional media is unlikely to follow this Orwellian
model. Instead, the consumer of the
barriers between the user and the
become marginalized. business. future is likely to take more control of
what they see, when they see it and
In considering if a kiosk is the
Reach out and touch appropriate choice for an application,
where they see it, even in public
venues.
According to the 2006 Summit the designer needs to weigh issues
such as cost, the amount of floor space That future happens when there is:
Research report on the kiosk industry,
North America will approach one million required, and ongoing maintenance and i) A clear end-user benefit: a time,
kiosks by 2008. support. Kiosks are typically more labor or cost saving.
expensive than signage systems ii) A clear business benefit:
Kiosk technology can deliver a clear
because they combine signage systems competitive advantage,
return of investment and measurable
with an enclosure and a touch screen. differentiation, brand extension,
marketing and commerce to out-of-
home applications ranging from ATMs, Maintenance/support of kiosks can also demonstrable return on
ticketing, photo printing and self- be challenging because they often investment.
checkout systems. include moving parts such as card iii) Mutual trust: trust that the
Around 30% of kiosks are deployed in readers or coin slots. technology and information will
retail locations. Their strength is For applications in retail windows, or on not be abused by businesses
somewhat limited to one-to-one the street, kiosks are also challenged. data-mining the information which
applications where one screen serves Some touch-screen solutions exist for would ultimately compromise the
one customer at a time (see Table 1). store-fronts, but they tend to be a very applications for businesses and
In effect, these kiosks transform a expensive utilization of the real estate. consumers alike.
traditional labor-intensive transaction – Another key issue for kiosks is that they By combining mobile technology
such as printing photos or registering at require the user to step into their “zone” with narrowcast networks, the
a retailer’s gift registry – by making that and touch the screen. One should consumer is given the opportunity to
transaction quicker and easier for the never underestimate the problem of use the mobile phone, a device they
consumer. taking control away from the end-user. carry around with them every day.
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7. The disruptive effect of the Internet and mobile phones on out-of-home digital media - Bill Collins and Stephen Randall
Being familiar and trusted, the mobile Locations such as retail outlets are well when marketers could reliably assume
phone is also the device the user positioned to leverage their proximity to they could reach their audience have
feels in control of. Unlike using a mobile consumers. Such locations will long gone. Rapidly evolving technology
kiosk, users of mobile-enabled be able to offer services in which is changing the way in which
signage make and break their consumers can interact and ultimately consumers interact with marketing
engagement within a personal transact simply. Platforms that support messages. Consequently, more
“comfort zone.” The consumer can these interactions and transactions will marketers are demanding measurable
view the signage at a distance and create incremental revenue for the results.
dial the phone number displayed on location owners, service providers and In contrast, businesses mindful of the
the sign. From that point forward, brands. limitations of mobile technology can
users follow a series of voice prompts What comes with this new technology is leverage mobile connectivity via
that allow them to use the phone like the ability to measure consumer ubiquitous voice and text messaging
a TV remote control. interactions. Measurability across all technologies which, when combined
The required connective tissue to screens will define the future of these with narrowcast networks (The Fourth
complete the closed loop between the networks. It reassures brands and Screen), can deliver on the promise of
user and the business is a mobile advertisers that their dollars are being interactive location-based services.
gateway. The mobile gateway spent effectively as it enables constant Mobile-enabled location-based services
translates a user’s phone key presses feedback and fine-tuning of their are likely to create significant
and sends them to a specific screen campaigns. opportunities for brands and
that then displays the requested businesses, especially in situations
content. The mobile gateway is
capable of understanding interactive
The future success and where the offering is relevant, timely
and perhaps above all, trusted.
voice response (IVR) commands or differentiation of out-of- The Fourth Screen is emerging as a
Short Message System (SMS) home signage networks source of information when consumers
commands or other message protocols
(such as Blue Tooth or MMS). will depend on their ability are away from the home. With mobile-
enabled technology, out-of-home
Figure 1 shows the data-flow between a to attract, interact with networks are one step closer to meeting
user’s interactions with a location-
based screen (the “Attract” loop) and a
and react to consumers in the demands of businesses and
satisfying consumers’ need for
business’s ability to react to the user by the moment. information “right here, right now.”
dynamically changing the screen and/or
responding to the user (the “React” Mobile-enabled narrowcast networks About the authors
loop). will find applications in many vertical Bill Collins is principal of DecisionPoint
The future success and differentiation of markets. A few examples include: Media Insights, a marketing and market
out-of-home signage networks will · Travel and Tourism: city guide, research consultancy that develops go-
depend on their ability to attract, travel agent and digital concierge to-market strategies for media
interact with and react to consumers in (See Scenario 1 on page 2) companies, agencies and technology
the moment. vendors in the out-of-home digital
· Bar/On-Premise Promotions: media field. He can be contacted at:
Attract: Use engaging one-to-one or social/dating, jukebox, gaming/
one-to-many dynamic content that, BCollins1@cinci.rr.com.
lottery (See Scenario 2 on page 3)
by being displayed in the right place, Stephen Randall is chief executive of
at the right time, is more relevant to · Real Estate: window display
connected to MLS databases or Boston based LocaModa Inc., a
the target audience “in the moment.” technology company dedicated to
other web-based assets (See
Interact: By using mobile phones, Scenario 3 on page 4) improving the user experience and
consumers can engage with content brand effectiveness of out-of-home
· Automotive: showroom application digital media. Prior to LocaModa,
on the narrowcast screens without
and marketing campaigns Stephen was a founder and EVP of
having to leave their own “comfort
zones” (i.e. without having to enter · Retail: digital mannequin, interactive Symbian, the market leading mobile
the business’ territory prematurely, shopping phone operating system provider. He
which can endanger the prospect of a was a founder and Joint President of
sale or relationship). Being “in Conclusion Psion Software the licensing arm of
control” leads to a more compelling Multiple media channels vie for the handheld computing company Psion
user experience. attention of consumers every hour of PLC, and founder of Stepp Limited,
every day of every year. Messages inventors of the world’s first digital
React: Like the web, businesses can guitar. He can be contacted at:
data-mine every click. The user’s besiege consumers at home, in the
car, train, bus, plane, on the web, on srandall@locamoda.com
phone number is treated as a cookie,
so his or her interactions can also be the side of buildings and even in NOTE: This document may be shared and re-
personalized across several sites, or elevators. printed. Excerpts may only be reproduced with
proper attribution to The disruptive effect of
several transactions. If the user opts- The rules of engagement are changing
the Internet and mobile phones on out-of-
in, that phone number can be used on many fronts. With rapidly changing home digital media by Bill Collins and Stephen
for further contact. technology and legislation, the days Randall.
7