Enterprises Take Video to the Consumer Masses with Out-of-Home Systems

Forward-thinking enterprises are embracing digital, out-of-home video systems to reach customers when they are out and around (and inside) a variety of locations to drive product sales and derive advertise revenue.

Digital video has already been deployed by retail giant Wal-Mart, which uses a flexible network linking displays in stores to direct shoppers to special and price promotions. 7-Eleven provides shopping info, video programming and advertising to deliver ROI.

Retail has arguably been the most aggressive vertical industry in deployment of out-of-home systems, but others are seeing the light (from the screens), which has sent interest in the systems soaring in the transportation and hospitality markets as well. Harris Corp. (News - Alert) boasts an entire division dedicated to this expanding video industry market segment.

At the Video World Conference & Expo in October, Denise MacDonell delivered an engaging, business-of-video presentation of the 7-Eleven national rollout. She’s the general manager of the Digital Out-of-Home Business unit for Harris where she’s in charge global product strategy and development as well as client service.

Got Your Attention?

Screens strategically located inside the convenient store display selected items in vivid and magnetic color to capture the eyes of shoppers, especially those stopping at specific points. In addition, the system strives to hold shopper attention with a news ticker, local weather and entertainment content. Ad spots were sold to add revenue to that landed through increased product sales.

Check out a typical 7-Eleven in-store screen: http://www.harrisbroadcastexperience.com/. Seeing is believing.

Harris claims that upon completion of the nationwide 7-Eleven deployment, the system will be the fourth-largest broadcast TV network in the U.S. It will also cover 6,200 locations and be able to reach more than 200 million people per month.

Harris manages the turnkey network, having provided its components, as part of a 10-year, $75 million contract with 7-Eleven. MacDonnell’s firm also handles content production and advertising sales under the agreement. She presented as part of the Enterprise Track session entitled:

Apps –olutely! Creating Business Programs for Wired and Wireless Networks

Beyond Convenience

Other industries have taken notice of out-of-home systems and the thinking behind them. Not far from the home of yours truly, Mobil Corp. has placed small TV monitors atop each gas pump to capture the attention of those filling their tanks who don’t have the option to leave a small area. These same consumers are easily engaged and may now have a reason to go inside the gas station-turned-convenience store.

The video and audio from the pump-top monitor quickly grabbed my attention for some time with its interesting programming in a location devoid of competition. I didn’t hit the station/mart but that was primarily because I was in a big rush - and paid at the pump.

Back to the Future (and Present)

While the Mobil system seeks to bring customers into the store, the 7-Eleven implementation targets consumers already in the store, with focus on those who have paused to buy – and are waiting on -- a coffee or hot dog, for example.

These pauses, while at a gas pump or at the coffee machine, are perfect opportunities to capture the attention of paused shoppers with information and entertainment. Once captured, it’s human nature to get a closer look and check out a monitor in a non-traditional location, especially when it’s for the first time.

That’s the beauty of the 7-Eleven system. It goes beyond driving revenue through additional sales to include paid advertising that’s already bought and paid for. This helps cost justify the systems as well as promising to turn revenue streams into rivers.

Beyond TV

The 7-Eleven undertaking is more than a milestone in video use, perhaps creating a modern-day MTV (merchandising TV). Industry watchers believe these networks are forcing fundamental changes in the always-evolving advertising industry.

“With its rich and consumer-relevant content, huge scale, and precise measurements, 7-Eleven TV offers precisely the qualities needed for a highly effective, high-reach and high-impact digital advertising network,” said Thomas L. Harrison, chairman and chief executive officer of Diversified Agency Services, Omnicom (News - Alert) Group Inc. in a Harris-issued press release on the 7-Eleven project. “It’s not just a vision into the future: it’s the vanguard of how new, high-ROI advertising channels will be shaped going forward.”

Going Global

Even with its breadth and depth, the 7-Eleven network, with its paid advertising, is part of a global phenomenon already in progress.

Global digital out-of-home media (DOOH) revenue, generated by digital place-based networks (DPNs) and billboards and signage operators (DBBs), grew 15.3 percent to $6.97 billion in 2011, and are forecast to accelerate 19.2 percent, to $8.3 billion in 2012, according to data from PQ Media.

The continuing economic recovery and record political ad spending are key drivers of the strong 2012 forecast, said PQ Media.

Market Intelligence & Forecast

The Americas accounted for 35 percent of total DOOH revenues in 2011, according to the market research and analysis firm.

PQ Media's Global Digital Out-of-Home Media Forecast series, tracked, analyzed and forecast revenue, growth, and trends in the leading 28 global digital out-of-home (DOOH) markets in four major regions: The Americas, APAC, Europe and the Middle East and North Africa.

Overall, PG Media says, the global DOOH industry expanded at a compound annual growth rate (CAGR) of 13.7 percent during the 2006-2011 period. The U.S. remains the largest global market; however, China, now second to the U.S., is growing at a faster rate.

The Beginning

While delivering video to users in front of their TVs and at their computers is mainstream and wireless in the works, reaching you on the move (already spending at the 7-Eleven, Wal-Mart and gas station) with full control of the programming gives enterprises a more direct, bottom line-focused approach to cashing in on the value of video.