Screening RoomsBy Mel Duvall | Posted 2004-03-01 Email Print
Digital displays may soon become signs of the times. But is Advance Auto Parts' five-year-old system of delivering messages by satellite hitting a speedbump?
Stepping into the Advance Auto Parts store in Alpharetta, Ga., customers are greeted by the usual assortment of motor oil, body fillers, windshield wipers and chrome-plated car accessories. But as they roam the aisles, a voice coming in from ceiling-mounted speakers calls for them to take a gander at the Ford Mustang Cobra Rthe fastest production car ever made.
The set-up is one of the longest-running examples of an in-store media network, sometimes referred to as narrowcasting, or digital advertising networks. It serves as a benchmark against which a barrage of digital-signage experiments at a wide range of retailers will be compared over the next year.
Companies as varied as Borders, Kroger, Safeway, Best Buy, Zellers and Bank of America have begun pilots, strategically placing vividly bright plasma or liquid-crystal display (LCD) screens in their locations. In Europe, grocers Tesco and Metro Group are pushing ahead with plans to place as many as 50 screens in each of their stores, and in Canada, discount retailer Zellers, a division of Hudson's Bay Co., has launched a program to put 20 LCD screens in each of its stores, displaying 10 different "channels" of programming.
"Indications are 2004 will be a big year for the [digital- signage] industry, and probably a breakout year for the technology," says Norman McLeod, an analyst following the emerging sector with Cap Ventures of Norwell, Mass. He estimates the industry's value at about $500 million, including hardware, software, bandwidth, content production and ad revenues, and says it will grow roughly 30% to 35% in each of the next three years. "Advertisers are going to find the strength of being at the point of purchase with their message very compelling," he says.
While many retailers are just beginning to experiment with digital signagetrying to determine the right mix of inside and outside advertising, and even the best location for screensAdvance Auto has been refining its network for five years. The venture was born partly out of the need for a means to communicate to a rapidly expanding series of stores, and partly as an experiment in advertising to a captive audience.