This was the third big announcement by TargetCast during September 2009, following the announcement of its acquisition of Ripple TV and its advertising-sales partnership with Premier Retail Networks (PRN).

The $6.5 million is TargetCast’s second formal round of VC funding from two firms, Claremont Creek Ventures and Draper Fisher Jurvetson. According to the TargetCast press release, “TargetCast previously raised $6.3 million in a Series A investment led by Claremont Creek Ventures in September 2007. To date, the company has raised $12.8 million.”

The new funds will reportedly be used to expand TargetCast’s sales team and for other purposes designed to achieve growth.

The company also announced that John Fisher, a managing director of Draper Fisher Jurvetson, joins the TargetCast board of directors. The other members of TargetCast’s board include:

• Nat Goldhaber, a managing director at Claremont Creek
• Paul Straub, a principal at Claremont Creek
• Dr. Peter Sealey, CEO and majority shareholder of The Sausalito Group, Inc and former chief marketing officer of Coca-Cola
• Jerry Hall, the CEO of TargetCast

TargetCast Stands Out from the Pack

In the U.S. Digital Out-of-Home sector, some thoughtful observers feel that TargetCast is one of the networks that should “make the cut” during the next few years as many smaller, weaker networks fall by the wayside.

For those who are betting on TargetCast, they cite two main reasons for their sanguine view of TargetCast:

1. TargetCast holds an important business-methods patent

   VC firms love patents. TargetCast’s patent, which the U.S. patent authorities granted in June of this year, covers the combination of a digital signal with a video signal, on television screens, for marketing to consumers.

   The patented system enables venue operators (bars, restaurants, etc.) to create and post their own branded messages directly on the existing TV screens (showing cable-TV channels such as ESPN and CNN) that customers are already watching in those venue.

   As the DailyDOOH reported in June, “These 15-second venue promotional spots alternate with national and local ads approximately every two minutes, delivering a Nielsen-measured audience with an exceptional advertising recall” and with what TargetCast calls “exceptional . . . purchase-influence scores.”

   “Purchase-influence scores” is a market-research term which suggests that bar/restaurant patrons have reported to market-research interviewers that the advertising shown on the screen had a significant impact on their intention to buy the products advertised on the screens.

2. Jerry Hall, TargetCast’s CEO, has deep experience and credibility in the Digital Out-of-Home market

   Hall is one of just a handful of U.S. media executives who has had extensive experience leading Digital Out-of-Home networks over a period of about two decades.

   From 1994 to 2001, Hall served as senior vice-president of sales and marketing at PRN, where he, “was responsible for launching the company’s advertising sales on satellite television networks,” the TargetCast website reports.

   Hall has also worked for Convergent Media Systems, a communications-services firm that provides the satellite infrastructure for Channel One.

   From January 2004 to November 2007, Hall served as regional director for sales and marketing solutions for XM Satellite Radio.

   During the early pioneer days of the Digital Out-of-Home medium, Hall worked for Whittle Communications, the creators of Channel One. Founded in 1989, Channel One continues to beam news and advertising into middle-school and high-school classrooms across the USA. In 1994 – the year that Jerry Hall joined PRN – Chris Whittle, the founder of Whittle Communications, sold the networks to Primedia for a reported price of approximately $250 million.

In statement released Monday, Sina CEO Charles Chao said, “The delayed consummation of the transaction has negatively impacted the business operations of both sides.”

According to the Wall Street Journal, the deal was set to expire if the Chinese Ministry of Commerce did not approve it by Wednesday, September 30.

Both Sina and Focus Media are based in Shanghai. When the deal was announced in December 2008, it was valued at USD 1.1 billion. According to Bloomberg News, Sina has posted profit declines for the past two quarters and Focus Media has reported three straight quarterly losses.

Under the terms of the proposed deal, Sina had planned to issue 47 million new shares of stock to acquire Focus Media’s network of Digital Out-of-Home screens. Focus Media’s advertising-based network is comprised of more than 120,000 flat-panel screens which can be seen in stores, office buildings and other public venues in more then 90 Chinese cities.

Bloomberg News reports that Sina’s U.S. depositary receipts have climbed 45% since the company announced its plans to buy the Digital Out-of-Home division of Focus Media.

The Wall Street Journal reports that, instead of the Sina/Focus Media merger, “a group of investors led by Sina’s chief executive will invest $180 million for about a 10% equity stake in Sina. . . . The company said it will use the new funds to finance future acquisitions and for general corporate purposes.”

The Journal further reports that “Sina’s plans to acquire Focus Media’s assets was viewed as a risky move to expand into offline advertising.”

The Smart Network is Walmart’s new in-store screen network which has been rolled out to several hundred of Walmart’s stores in the USA.

According to the July 20 Advertising Age article, the “implied threat” from Walmart is that brands which do not pony up more funds for the Smart Network and other Walmart-owned media channels risk having their products removed from store shelves.

The article did not cite any specific examples of brands that Walmart has forced to advertise involuntarily on the Smart Network however, the article did cite some evidence that earlier this month the Arm & Hammer brand of liquid detergent stepped up its marketing spending on Walmart’s TV advertising and print circulars because of this “implied threat.”

Walmart, acting like an ad agency, wants to pull 15% of brands from its shelves

According to the article, this current initiative is part of a larger “Project Impact” through which Walmart is “culling product assortments around 15% on average and as much as 80% on some low-priority items.”

The article quotes heavily from Leon Nicholas, the director of retail insight at Management Ventures, Inc. (MVI). Cambridge, Massachusetts-based MVI is a retail research and consulting firm which issues reports about the retail industry on a regular basis. MVI is a unit of the WPP Group, the international conglomerate of marketing/advertising agencies.

Nicholas said that the effect of these new initiatives by Walmart is to cast the giant retailer into a new role as an advertising agency.

Nicholas said that brands sold at Walmart are being asked to “pony up marketing dollars in order to get more favorable treatment and placement in any number of Walmart promotional vehicles, so that they’re advertising through Walmart almost as if Walmart were an ad agency now. And as that happens,” Nicholas said, “yes, decisions have been reversed” [about product assortment].

Adcentricity reports that Research Lite includes both pre-packaged and customized audience-research studies that are conducted across multiple DOOH networks and venues. “The key service provider for the Research Lite option is Peoplecount . . . an award-winning research firm and supplier of audited out-of-home circulation data,” Adcentricity said in its press release.

Five research packages are offered

According to an Adcentricity brochure provided with its press release, the five different pre-packaged services offered through its collaboration with Peoplecount range in price (for one local geographic market) from USD 4,200 up to USD 49,800.

At USD 4,200, the basic ‘Snap Shot’ pre-packaged service includes research at one venue in one local geographic market, with up to 15 survey questions to be asked of 100 consumers via intercept interviews.

At USD 49,800, the high-end ‘Acute’ pre-packaged service includes research at 10-20 venues in one local geographic market, with 20 survey questions to be asked of 2,000 consumers in intercept interviews.

To extend research beyond just one local geographic market, Adcentricity reports that additional local markets can be added to the research packages for an additional USD 3,500 for the basic Snap Shot package and USD 33,500 for the high-end Acute package.

Rob Gorrie, CEO of Adcentricity, said, “Research and ROI metrics are an essential element in any medium to garner widespread market adoption, especially in emerging mediums such as Digital out-of-home.” He added, “By offering an affordable service, we provide a certain level of accountability to the medium and an ROI solution that has traditionally been a challenge for advertisers to activate measures. We believe Research Lite will be a key service in driving the medium forward and getting brands comfortable with leveraging the true capabilities of Digital out-of-home in their campaigns.”

Audience research data for single brands across one medium is rare

In the press release, Adcentricity pointed out that the type of customized single-brand research packages which Research Lite offers across one medium (DOOH) is rare.

The press release stated, “Normally research initiatives are syndicated programs that involve several brands or are a major undertaking and investment by [one] brand across multiple disciplines. Being able to activate a research study on an individual medium [DOOH] . . . presents a complete solution for [advertising] agencies and brands to initiate and evaluate campaigns effectively and efficiently,”

Kelly McGillivray, president and chief methodologist of Toronto-based Peoplecount, said, “We . . . think this type of offering is an efficient way to help prove the value of the [DOOH] medium to the advertising community.” She said, “The campaign objectives that Research Lite addresses — from sales lifts to brand awareness and message recall — are the types of metrics advertisers are looking for to determine the success of their campaigns.” McGillivray added, “The largest challenge in this project was developing ‘off-the-shelf’ packages to bundle cost-effective services that provide accountable data for the advertiser.”

Verizon Wireless is Adcentricity’s first customer for Research Lite

Adcentricity reported that Verizon Wireless, a U.S. mobile-phone service provider, was the first client to utilize the new research service for Verizon Wireless’s new ‘Push to Talk’ service offering. The marketing/advertising agency Zenith Optimedia created the content for the Verizon Wireless DOOH campaign.

According to the Adcentricity press release, the Verizon Wireless research showed that “79% of consumers noticed the digital screen within the environment.” The press release also reported that “The Verizon Wireless campaign effectively reached the targeted consumer within each market and venue in which it ran. 46% of all respondents were within [the] occupation, age and household income target profile,”

The release added, “The study also provided a deeper scope of insight for Verizon Wireless including: consumer brand perception, competitive services, purchase intent, market opportunity, ad creative impact and more strategic findings specific to the service and initiative.”

Thanks for posting ‘It’s Good For Danoo‘ on Friday – a helpful piece summing-up up the recent blog postings on the Danoo-NCM-IdeaCast deal.

Yes, we blogger types have been writing about this deal quite a bit lately. But, I think it’s worth all this attention because there is a lot for the Digital out-of-home industry (especially in North America) to learn here. Here are some more thoughts: -

• Thanks, Adrian, for providing more detail about what has been happening recently at IdeaCast. This timeline and background helps to explain even more why IdeaCast and NCM needed to make a move.
• Manolo Almagro’s previous DailyDOOH post, which you cited – ‘Is Danoo the Next Generation of DOOH Networks‘ – explains why Danoo’s approach to content localization, user-contributed content and transnational collaboration on content (content-production staff working and collaborating from both sides of the Pacific) is so innovative. It’s important to note here that Manolo Almagro is not just another blogger with an opinion. Manolo’s work experience in this DOOH media sector going back 12 years has provided him with an intimate knowledge of both the technology of DOOH and the challenges of content production for this medium. Plus, Manolo is one of our industry’s most savvy advocates of transnational collaboration on content. If you don’t know Manolo’s impressive background, I would suggest that you take a look at his LinkedIn biography
• Captivate Network, the ad-based DOOH network that targets business professionals in their places of work, also does an excellent job with content localization. There’s a lot about Captivate that reminds me of Danoo. Both were started with significant VC money by tech-minded people working in high tech centers of the USA (Danoo in the Silicon Valley/San Francisco Bay region and Captivate in the Eastern Massachusetts /Southern New Hampshire region). Both have a history of transitioning (Danoo at an earlier stage of this transition, Captivate in a later stage in the transition) from a tech orientation to more to a media-sales orientation. Also, both companies are industry leaders. Danoo leads in the ways discussed in these recent articles and Captivate (its CEO, Mike DiFranza, in particular) showed very strong leadership in launching the Out-of-Home Video Advertising Bureau (OVAB) in 2006 and 2007.
• Just as Captivate and Danoo are proven leaders, National CineMedia has led in many ways that these recent articles have outlined. Their new www.ncm.com consumer portal is one of the most attractive consumer-oriented sites that any media company has put together. And, they – like Captivate at OVAB – took the bull by the horns to create the Cinema Advertising Council (CAC). Plus, they are selling advertising now at the rate of more than $US 200 million per year.
• Across the board with this National CineMedia/Danoo/IdeaCast deal, we see industry leaders clearly acting like industry leaders. This adds up to a positive sum that we need to recognize and learn from.

It is a game-changer. And yes, I would call it a watershed event. This helps all of us, not just the people involved in this particular deal.

This deal breaks new ground because, to date, National CineMedia (NCM) has been the most profitable large-scale innovator in the U.S. Digital out-of-home (Digital OOH) sector. With this deal, NCM has found in Danoo a smaller, well-funded and innovative partner that can help the cinema-advertising giant expand outside of its very strong base inside movie multiplexes. NCM has scale, growing revenues, a big market cap, and a strong sales force with 6-7 years of experience successfully selling Digital OOH advertising in the U.S. market.

According to the terms of the sale, both NCM and Danoo’s leading investor, the Silicon Valley-based venture-capital firm Kleiner Perkins Caufield & Byers (KPCB), will hold minority interests in the new combined company. Both the venture capital (VC) firm and Denver-based NCM will have seats on the merged company’s board of directors. Mediaweek’s Katy Bachman reports that “Conveniently, Danoo’s new New York City office will be across the hall from NCM.” Danoo’s corporate office is located in San Francisco. IdeaCast is based in Chicago

National CineMedia Brought Cinema Ads Into the Mainstream of U.S. Advertising

During the last 6-7 years, NCM has leveraged digital-projection technology, satellite communications and the Internet to completely transform and rationalize the cinema advertising business in the USA. Prior to this digital transformation, cinema advertising was a stepchild in the U.S. advertising family.

Now cinema advertising is growing rapidly, delivering a highly desirable leisure-time demographic to advertisers much more easily than was done with old-style movie-house advertising which was comprised of slide advertising and 60-second Coca-Cola ads on scratchy, 35mm reel-to-reel prints.

By leveraging these new digital technologies, NCM created a Digital out-of-home network that counts annual advertising revenues in the hundreds of millions of dollars.

For example, in its most recent quarter, NCM reported quarterly advertising revenue of USD 60.1 million, compared to USD 53.7 million in revenue for the comparable 1st quarter of 2008.

NCM’s national theater network includes approximately 16,800 screens in more than 1,325 theatres in 46 of the 50 states, reaching more than 660 million moviegoers in 2008. A publicly held company (NASDAQ), NCM has a market capitalization of USD 543 million. This market heft dwarfs the size of any other U.S. Digital OOH network.

For the overall U.S. digital-cinema industry (which includes NCM’s chief competitor, Screenvision) total advertising revenue reached more than USD 571 million during 2008, according to the Cinema Advertising Council (CAC). The CAC reported last month that total revenues from U.S. cinema advertising has grown an average of 21.5% per year since 2002, with 2008 revenues reaching a level that is almost triple that of 2002.

This means that in 2008, this USD 571 million in U.S. cinema-based advertising revenue was greater than the total ad revenue generated by all of the other U.S. screen-media networks at retail and out-of-home which operate outside the multiplexes.

National CineMedia Steps up to Provide Leadership to the Digital Out-of-Home Sector in the USA

Although for many years NCM has been seen by many industry observers as part of the emerging Digital OOH sector, up to now it has largely defined itself as a cinema-advertising firm.

For example, although NCM was a founding member of the CAC in 2003, it has thus far declined to join the Out-of-Home Video Advertising Bureau (OVAB), the leading U.S. industry body which promotes Digital OOH as an advertising medium. [Danoo is a member of OVAB.]

With NCM’s minority investment in the Danoo/IdeaCast merger, and its green light to cross-sell ads on both its network and the Danoo/IdeaCast networks, NCM is clearly stepping up its involvement with the larger Digital out-of-home or advertising-based ‘Digital Signage’ media sector.

This shift started two years ago, in June 2007 when NCM invested a few million dollars in IdeaCast. In May of this year, NCM announced in its Q1 2009 conference call that it had acquired 100% of IdeaCast’s secured debt.

During that 12th May call with investors and analysts, NCM’s chairman and president, CEO Kurt C. Hall, explained how the company hopes to leverage the larger Digital out-of-home industry into what he called a “new growth engine for NCM in the future.”

In an interview with Mediaweek’s Katy Bachman published 6th July Hall added, “Cinema is ahead in the Digital OOH space, but clearly two to four years down the road, we’ll be looking to add growth. We see this [NCM’s interest in merged Danoo/IdeaCast enterprise] as an incubation platform for NCM.”

National CineMedia grew out of Regal CineMedia, which was founded in 2002 as a subsidiary of Regal Entertainment Group, part of Denver billionaire Philip Anschutz’s vast holdings. Anschutz, with an estimated net worth of USD8 billion, ranked 36th on Fortune Magazine’s 2008 list of the richest people in the USA.

“We’re Getting to Real Scale,” Danoo’s CEO Says

In the Mediaweek article cited above, it reports, “Aileen Lee, a partner with Kleiner Perkins [Danoo’s VC investor] who has served as CEO of Danoo for two years, will head up the combined company until a new CEO is named. Jason Brown, president of sales and marketing for IdeaCast, will manage sales for the combined company” – “It’s an amazingly complementary fit” Mediaweek also quotes Lee as saying.

The article says that Danoo began discussions with NCM about one year ago. “We’re getting to real scale” Lee said.

That ‘scale’ as the Danoo CEO describes it, would include the following: -

• IdeaCast’s Health Club TV network which is installed in approximately1,000 health clubs across more than 100 local markets
• IdeaCast’s Airline TV network, which in-flight airline passengers travelling on JetBlue, Frontier and Continental airlines can view on 7,800 seatbacks
• Danoo’s City Network, which is currently located in about 850 coffeehouses in Boston, New York City, Chicago, Los Angeles and the San Francisco Bay area, and Danoo’s new Traveler network, which it is currently rolling out to newsstands and gift shops at about 25 major U.S. airports such as Atlanta, Los Angeles and San Francisco.
• Danoo will have what the company calls “synergies with NCM’s network in terms of technical infrastructure, operational support and sales staff.”

NCM scale + Danoo innovation + VC cash + Smartphone Interactivity: The Sum of These Parts Equals a Game Changer

To understand how and why this deal is a watershed, it first must be pointed out that Danoo, with less than 1,000 screens prior to this deal, is still not a particularly large network. Currently many Digital OOH networks in the USA and around the world beam content to audiences that are much bigger than Danoo’s reach.

However, when one takes a closer look at Danoo – its innovative use of user-contributed and interactive content, its 30-person team (both technical and creative) based in China, along with its very deep pockets and management expertise from its Silicon Valley-based VC firm – it’s clear that the Danoo/NCM collaboration is an emerging game-changer for the U.S. Digital out-of-home media sector.

Consider the following about National CineMedia and Danoo: -

• Last year National CineMedia (NCM) created a new consumer website, www.ncm.com, which engages movie-goers about the movies shown in theaters where NCM offers its ‘First Look’ content block of programming and advertising that is shown before the start of the feature films. This new website includes a list of movie show times, a chance to view special interviews and features about current movie releases, and a social-media component a la Facebook.com that allows movie fans to interact and socialize.
• On 3rd July NCM launched an interactive polling promotion called ‘r8 it’ – pronounced as rate it, Ed where movie-goers are invited to use their mobile phones to rate some aspect of the movie that they just viewed. This invitation to ‘r8 it’ is issued during NCM’s First Look pre-feature programming, on digital screens in the lobbies and also via print handouts which movie-goers receive at the box office when they buy their movie tickets. The results of the ‘r8 it’ ratings are posted on the new NCM website and on a new ‘r8 it’ smart-phone application. Winners receive free movie tickets for one year.
• More than any other Digital out-of-home network operator, NCM has developed significant expertise in simulcasting concerts and entertainment events, as well as in event management and sampling. As Digital OOH networks start to take more seriously the notion of “enhancing the customer experience,” these extra competencies that NCM brings to the table should play a more important role in the Digital OOH medium.
• Although many Digital out-of-home media companies talk a good game about creating localized content, Danoo actually employs local editors who are based in the cities where the network is deployed (San Francisco/Oakland, Los Angeles, Chicago, NYC and Boston). According to Danoo CEO Aileen Lee, these editors ‘curate’ local news, events and culture, harvesting local information to publish on the Danoo screens. Lee said that these local editors compile this information from user-generated content and via direct data feeds from local published sources which are cited on the Danoo screens.
• Danoo leads the Digital OOH sector in attracting user-generated content. This content, which Lee calls “user-contributed content,” is now ubiquitous on the web but still rare in Digital OOH. Danoo recruits these contributions by inviting its local audiences to post photos, videos and information about local events via the www.danoo.com/participate tab on the Danoo home page. According to the Danoo web site, contributions to its ‘Photo Gallery’ are published in 5-photo sets. User-contributed videos which ‘work without sound’ are limited to no more than 2 minutes in length. Danoo says that up to 25% of its on-screen content in what it calls ‘relevant categories’ is user-contributed.
• Danoo – perhaps more than any other Digital OOH network serving U.S. audiences – is leveraging talent outside the USA. This talent based in Beijing, China – both technical and creative – is helping Danoo control costs and produce quality content with the localization and in the volume that the medium requires. Danoo employs 30 staff people in Beijing. According to Aileen Lee, five of those people are full-time creative people, working largely with 2D, FLASH and motion graphics. Three people in Beijing are program managers, with the remaining staff doing software development work (Danoo’s network is controlled by its own home-grown software). In order to facilitate communication between the Beijing-based staff and the San Francisco-based staff, the Danoo CEO said that at least three people from Danoo’s technical/creative team on both sides of the Pacific are bilingual and have experience living in both cultures. Lee herself is an Asian American who spent time at Fudan University in Shanghai.
• Danoo’s venture-capital backer, Kleiner Perkins, has a very strong track record in bankrolling successful companies going back more than 35 years. According to Lee, the VC firm vetted many investment proposals submitted by advertising-based Digital out-of-home networks before it decided to give its imprimatur to Danoo. Since its founding in 1972, Kleiner Perkins has provided early-stage financing and management assistance for well-known firms such as Amazon.com, AOL, Compaq, Drugstore.com, Genentech, Google, Lotus Development, Macromedia, Sun Microsystems Verifone and Zagat.
• Today, Kleiner Perkins (KPCB) is leading the financial sector in the funding of Apple iPhone-related technologies which potentially could speed the development of interactive features to enhance Digital out-of-home networks. This year Danoo announced some significant initiatives – which Aileen Lee said are producing “great results” – to encourage Danoo viewers to use their smartphones to interact with and download content from the Danoo screens. Recently KCPB created the KPCB iFund™ which the VC firm calls “a $100M investment initiative that will fund market-changing ideas and products that extend the revolutionary new iPhone and iPod touch platform.” According to the venture-capital firm, the new USD 100M investment fund will target “location-based services, social networking, mCommerce (including advertising and payments), communication, and entertainment,” which sounds like a snug fit for Danoo.
• Danoo does not express much interest in developing networks where the viewing experience is more ambient (for example inside clothing stores). According to Aileen Lee, Danoo likes venues such as airports, coffee shops, movie theaters, and other places because viewers are clearly captive, and thus “have the ability to engage” with screen networks. Danoo, Lee said, prefers to serve what it calls a “consistent and high-quality audience” which targets “hard-to-reach mobile, urban professionals and frequent fliers.”

For any corporate merger, the devil often emerges in the difficult details of corporate governance, geography and cultural differences.

This new merger, too, will struggle with those issues. It could fail like many other mergers that we’ve seen in the media business (think AOL and Time Warner). However, because of the money, talent and experience that Danoo and National CineMedia bring to the table, this deal amongst Danoo, IdeaCast and NCM should be one of the best seen to date in the U.S. Digital out-of-home media sector.

This new collaboration may spur the entire Digital OOH sector to innovate and serve its audiences and advertisers in some very exciting new ways.

Essentially, I greatly respect Networld Alliance and I do not hesitate to defend them in this note.

My small research consultancy, DecisionPont Media Insights, is proud to be a member of the Digital Signage Association (DSA). As Stu Armstrong said in his thoughtful and measured reply, the DSA’s dues have been kept low so that small and mid-sized businesses – the creative backbone of the Digital Signage industry – can afford to join and help lead the DSA.

In the USA, there are three (3) trade associations that support our industry. Each plays a vital role, and each deserves the support of all in our industry who have the means and energy to support them. We are a small and growing industry, so I think we need to respect and support each other in order for us to ‘grow’ the industry for all of us.

1. OVAB

   The Out-of-Home Video Advertising Bureau (OVAB) is an advertising bureau with relatively high dues that serves as the advocacy body to build the OOH digital media industry into a strong advertising-funded medium. 3-4 years ago, I developed the concept of OVAB and organized OVAB’s first two meetings along with Jim Lavelle of WatchIt Media.

   Yes, OVAB’s dues are high — $40K for a media company and $20K for others — but the dues NEED to be high because OVAB’s mission is to build a highly visible, well-staffed, well-funded NYC-based advocacy body for the advertising-based Digital OOH networks that operate in the USA. Our model for OVAB was the Interactive Advertising Bureau (IAB) and the Cabletelevision Advertising Bureau which Ted Turner and his cable-advertising friends created in the early 1980s when cable TV enjoyed less advertising revenue in the USA that Digital OOH network do now.

   I think it’s important to understand that ALL of these advertising bureaus on which OVAB was modeled charge high dues and virtually all of them are based in NYC because it is the media capital of the USA. Today OVAB is fulfuling its mission in spades, big-time, under the leadership of Suzanne Alecia.

   The way I see it, OVAB’s mission is one that in no way contradicts the mission of the DSA and the POPAI Digital Signage Group in the USA or overseas.

2. The DSA

   The DSA’s mission includes lots of players: technology firms, ad-based OOH networks, AV integrators, content-production houses, research firms, and any service provider that plays in the “Digital Signage” industry. Because the concept of “Digital Signage” extends far beyond advertising-based networks and the sale of advertising, a strong association is needed to lead that industry IN ITS ENTIRETY and tell its story.

   Just as Networld Alliance stepped into the breach to midwife the creation of the DSA (as Stu Armstrong explained above), Networld has also has played a very important role in the industry by creating, staffing and maintaining www.digitalsignagetoday.com, a leading news-and-analysis web site for our industry.

   Back in December 2002, I founded the first periodical publication of any kind (print or online) to cover this industry. It was called the Narrowcasting News From Bill Collins. Later I merged it with another publication (a UK-focused web site owned by Bob Clarke of Instrumental Media Group called the Captive Audience Briefing) that was started after the Narrowcasting News. Together, Bob Clarke and I created www.aka.tv.

   At that time, AKA.TV was the only publication of its type in the world. At AKA.TV, we maintained a friendly relationship with Networld Alliance (and I suggest that the Daily DOOH might also consider maintaining a friendly relationship with Networld Alliance) because we respected the work that they were doing publishing, creating events and creating trade associations in the kiosk industry.

   Back around 2005 or so, when I decided to change my role in the industry and sell my part of AKA.TV (or perhaps all of it), I had very friendly conversations with senior management at Networld Alliance about a possible sale to them. At that time, they felt that they had their hands full in the kiosk industry, the ATM industry and other industries that they played in. Later, a couple of years after I sold my share of AKA.TV, Networld started www.digitalsignagetoday.com at a time when, quite frankly, there was a news-and-analysis void in the industry.

   Today this news-and-analysis void is well filled by www.digitalsignagetoday.com, by www.dailydooh.com, by Digital Signage Magazine, by www.mediapost.com and by other publications. There is plenty of room for all of these various publications. As for me, I contribute articles to www.digitalsignagetoday.com, to Digital Signage Magazine and to www.dailydooh.com, and am happy to support all of them.

   Going back several years in our industry, I remember several efforts to start a trade association in the USA like today’s DSA which were not able to take flight because there was not a professionally staffed organization like NetWorld Alliance to “carry the ball” between meetings. [Indeed, organizing national groups across a vast geography like the USA is always difficult, in any industry.] The first such effort to start a trade association was in 2002, when the “super friends,” as Brad Gleeson and Jeff Porter sometimes called them, got together in March 2002 in Chicago after the CAP Ventures Digital Signage conference (which was the first industry event ever organized in the USA for our industry).

   That effort didn’t take flight, most likely because CAP Ventures (I respect these guys, because I used to work for them) didn’t have an internal organization that had sufficient experience organizing new trade associations.

   Organizing such associations “from scratch” is not easy. NetWorld Alliance is a very good organization to help this process now because they have experience and staff that has successfully organized such associations in the kiosk industry and in other industries in the USA. Indeed, it is integral to the Networld Alliance’s business model to:

   a) create industry news-and-analysis web sites

   b) create industry trade associations, and

   c) create industry events

3. The POPAI Digital Signage Group

   I believe that there is a vital role for the POPAI Digital Signage group – both in the USA and overseas – because POPAI’s heritage is in the retail marketplace and in the Point-of-Purchase or Marketing at Retail sector.

   Obviously, retail is and always will be a key venue for Digital Signage and other in-store digital media. To me, it makes perfect sense that POPAI has the institutional knowledge and experience that can help elevate Digital Signage as a key medium IN RETAIL that complements all the other ways that retailers communicate with shoppers.

So, to summarize this long commentary, I think we need to understand the complexity of building trade associations, publications, events and all the other “infrastructure” elements that we need in the USA and worldwide in order to build our industry (Digital Signage, Digital OOH, or whatever we want to call it). This work requires heavy lifting, and there are many people around the world – including Networld Alliance – who have played a very positive role in these efforts now and in the past.

Patience, please. In the immortal words of Rodney King, “Why can’t we all just get along?”

In our industry who will take the lead in moving in-store digital media up to the next level AND just as importantly, will these Generation 2.0 networks in the USA be financed and created by…

1. Retailers such as Wal-Mart, Target, Best Buy and Kroger
2. Media Companies that are active in retail media such as PRN Corporation, CBS Outernet or the In-Store Broadcasting Network
3. Leading CPG brands such as Procter & Gamble, Unilever and Kraft

That last group of folks of course could potentially create their own digital store endcaps, networked kiosks, or perhaps even product-category networks located in specific aisles of big box, electronics, pharmacy or grocery stores!

A recently announced collaboration between Wal-Mart and the In-Store Marketing Institute (ISMI) provides us with some important new insights on these issues.

Wal-Mart and the ISMI have teamed up to plan a three-hour, closed-door symposium later this year on the Wal-Mart’s Gen 2.0 “Wal-Mart Smart Network”

The precise timetable for the rollout of the Gen 2.0 Wal-Mart Smart Network has not yet been announced by Wal-Mart, however, it’s safe to assume that Wal-Mart’s readiness to invite CPG brands and their agencies to a 3-hour closed session in November during the ISMI’s In-Store Marketing Expo is a good indication that the nationwide U.S. rollout of the Gen 2.0 network will be well underway by that time.

“Wal-Mart Smart Network Symposium: Best Practices and Key Learning from Wal-Mart’s New Strategic Marketing Platform” – 14 November 2008

http://instoreexpo.com/attendees/symposiums.php

You can apply for the right to pay USD 275 to attend the Wal-Mart symposium by telephoning the ISMI at (888) 767-7469 in the USA or +847 675 7400 for callers from outside the USA.

What would a Gen 2.0 network look like?

So, what would be required to “take retail media to the next level” in Gen 2.0?

For starters, a Gen 2.0 digital media network at retail would need to:

1. Bring screens down to eye level
2. Build screens into endcaps, fixtures and shelving
3. Abandon the 2001-2002 “hang and bang” model where flat screens are hung nilly-willy around the store, mostly in locations that are difficult for shoppers to see
4. Control audio so that the soundtrack of these networks is welcomed by shoppers and store employees alike
5. Pack merchandise around the screens and speakers, so that the sound-and-motion media serves a useful purpose for both marketing and merchandising just as conventional Point-of-Purchase displays do

Earlier this year, Mike Hiatt, director of internal media networks at Wal-Mart, confirmed that this new type of in-store media network had been rolled out to 40 Wal-Mart stores in the USA.

During Hiatt’s February 2008 keynote presentation at the Digital Signage Expo in Las Vegas, he reported that the new “Wal-Mart Smart Network” which will be financed and owned by Wal-Mart and underwritten by selling advertising to CPG brands, is being developed to replace the existing Gen 1.0 “Wal-Mart TV” network in at least some of Wal-Mart’s U.S. Stores.

The Gen 1.0 Wal-Mart TV network, which is owned by the media company PRN Corporation, was installed in Wal-Mart stores by PRN starting about ten years ago.

In an article published in the 17 March 2008 edition of Supermarket News, Bobbie Katz reported on Mike Hiatt’s presentation at the Digital Signage Expo and wrote…

“As Wal-Mart sees it, the five A’s of in-store digital content are appropriate, affordable, adaptable (to different environments, stores and demographics) attractive and assembled quickly,” Hiatt said.

Wal-Mart is especially trying to make the content on the digital network adaptable and thus more relevant to shoppers at a particular location. “In-store advertising has to have the right message at the right time in the right place and with the right product,” he [Hiatt] said. “So we want to start programming to different markets, such as the Hispanic and Jewish markets. The technology must be developed to give content to engage the shopper.”

Last fall [the fall / autumn of 2007] Wal-Mart conducted a pilot study of the network’s effectiveness in growing category sales and improving the shopping experience, Hiatt said. Incorporating 40 test stores, 2400 customer intercepts and 45 products over a 12-week period, Wal-Mart discovered that “the closer the messaging to the product, the better the sales lift,” he said. He [Hiatt] also cited results showing that endcap display TVs represent an effective approach to supplier promotion and offered a real possibility of sustained category lift.

The Wal-Mart network is “always a collaborative process between us and our supplier partners,” Hiatt said. “But ultimately it’s all about the shopper’s experience and helping them.”

Speakers from PRN and DS-IQ will address Wal-Mart’s November forum

It’s not completely clear yet what role PRN will play in this new network and whether the Gen 1.0 model of Wal-Mart TV will continue to operate in some of Wal-Mart’s U.S. stores, but it should be noted that two of PRN’s senior executives will be speaking at Wal-Mart’s 14th November symposium in Las Vegas.

Those two PRN executives – President Richard Fisher and Senior Vice President of Marketing, Michael Quinn– will join two Wal-Mart executives (one of whom is Mike Hiatt) on the symposium’s panel.

Also scheduled to appear on the panel will be David DeBusk, the vice president of sales at DS-IQ, one of Wal-Mart’s software/research partners on the Gen 2.0 network.

In his February 2008 presentation, Wal-Mart’s Mike Hiatt gave repeated plugs to DS-IQ, explaining how DS-IQ’s IT system proved conclusively to Wal-Mart executives that when quality content is screened on the network, sales of the products that are advertised on the network increase in real time.

Wal-Mart invests in in-store media while other retailers cut capital spending

Today, during a period of slow retail sales in the USA, it is very significant that Wal-Mart is stepping up to the challenge of creating a Gen 2.0 in-store digital media network.

At a time when most U.S. retailers have scaled back their capital spending, Wal-Mart is investing heavily in in-store digital media for the first time in the company’s history!

The big question is whether Wal-Mart’s investment in the Wal-Mart Smart Network cause other U.S. retailers to copy Wal-Mart and finance their own Gen 2.0 networks?

Four months before Wal-Mart’s scheduled Las Vegas symposium, it is perhaps still too early to tell BUT EVEN NOW – in the middle of a very gloomy time for U.S. retail, we do know that when Wal-Mart talks, other U.S. retailers never fail to listen!