Now, we can be there for the people who are there. The Evolution of Digital Signage

The evolution of digital technology is bringing transformative change to OOH (out-of-home advertising and transit advertising). In this series, members of Dentsu Inc.'s Out-of-Home Media Division (OOH Division) will explore the evolution and potential of outdoor and transit advertising, focusing primarily on digital signage.
The first installment is "The Current State of Digital Signage" by Kei Hamada of the OOH Division.

 

My job is "putting TVs on buses."

The other day, when my son asked me, "What's your job, Mom?", I answered like this.

"I put TVs on buses!"

That's right, I'll admit it—I installed digital signage on buses. And then I installed digital signage at stations too.

*About the Bus Signage Business

Of course, I didn't physically install them myself. I manage the digital signage business with tremendous support from signage manufacturers and SIers (system integration companies).

By the way, since "digital signage" is too difficult for my son at daycare, I just call it "TV."

As a side note, when installing signage on moving vehicles like buses, we calculate power consumption beforehand to ensure it doesn't interfere with operations. I never imagined that a humanities major like me would recall Ohm's Law (V=A×Ω) at this age (laugh). When my son starts elementary school and asks, "Why do I have to study?", I plan to tell him this story.

The great thing about OOH is that it "just catches your eye."

But what really makes OOH great? It's the "forced visibility."

For example, when I asked a new employee who joined last year, "Why did you decide to join an advertising agency?" She explained that she had entered university to play tennis, but an injury prevented her from competing for a long time.

"I was so depressed I thought about dropping out of university. But then I saw a sign across the way from my dorm that said, 'I won't lose!' Seeing that made me think, 'If I quit now, that really would be losing. I can't quit here.' That's what gave me the strength to keep going. That sign sparked my interest in advertising work."

This is precisely the effect of "forced visibility."

Traditional media like print, TV, radio, and internet only reach people who actively choose to "see" or "hear" them. But OOH achieves something else: "You didn't even intend to see it, but it caught your eye and really stuck with you." In other words, it makes "If I ran into it here, I'd fall for it at first sight!" a reality.

OOH has another key characteristic.

Previously, an airport representative mentioned, "Advertisements seen before check-in and those seen after check-in—it seems the ads seen after check-in, when people are feeling more relaxed, tend to stick in their memory better."

In other words, compared to other media, OOH is heavily influenced by the viewer's current "location," the surrounding "situation," and their "mood" at that moment.

Imagine this: an ad seen near your workplace on a Monday morning when you're feeling unmotivated versus an ad seen near your home on a Friday evening before the weekend. Even if it's the exact same ad, the impression it leaves will be completely different.

Japan's digital signage market has significant room for growth.

Among OOH's various characteristics, digital signage is particularly promising. Let's examine how much it has actually grown and how much further it is expected to grow.

Japan ranks as the world's third-largest OOH market, following China and the United States. Within this, the digital signage market size is projected to expand from ¥49 billion in 2016 to ¥150 billion by 2020.

Furthermore, Japan's digital signage market is projected to grow at an average annual rate of 30.9% from 2015 to 2020. Considering the AI market, currently the most watched sector, is projected to grow at 46.2% over the same period, digital signage is performing quite well in comparison.

However, looking at the "share of digital signage within the OOH market," it currently accounts for only 9.4% of the total. While this share is projected to grow to 20.8% by 2019, the global average forecast for the same period is 39.7%, indicating digital signage still holds a very low proportion.

Looking at these figures, it seems digital signage still has room to increase its presence within the expanding OOH market. The Japanese digital signage market can certainly be considered an area with significant potential for growth.

(The figures above were calculated by the author based on references including "Fuji Chimera Research Institute Survey 2015, 2016," "Japan Advertising Expenditure 2016," and "Analysis and Forecast of Global Entertainment and Media 2015-2019")

The business model for digital signage was analog.

Many might think, "It's digital from the start, so digital signage can't evolve anymore, right?" But that's not the case.

In reality, digital signage has operated on a "TV + DVD player" model. To put it bluntly, only the display was digital; the business model itself remained old-school analog.

When I first got involved in the signage business, my initial question was: "Why did digital signage start with a TV and DVD player model instead of an internet-based model?"

My personal answer is: "When digital signage began to spread, communication environments weren't as good as they are today." And stemming from that: "Given the role of digital signage, it needed to play and synchronize stably, regardless of the communication environment." If you press the play button for a video on the web all at once, the playback gets out of sync depending on the connection speed. But don't you think the signage at stations is perfectly synchronized? If the network environment differs, delays occur in playback and synchronization.

Furthermore, OOH pricing isn't based on an "action-based billing" model like impressions or clicks. It's a reservation-based model where you pay a fixed amount for guaranteed continuous display during a set period. This means best-effort performance, where you might end up with less display than expected, simply isn't acceptable. This is why the digital signage business model had to be analog.

Of course, it wasn't that they were completely disconnected from the internet before. It was common practice to only use the connection once a week when downloading new content.

However, with communication environments now dramatically improved and stable connectivity achieved, digital signage is increasingly connecting to the internet. This shift means it's becoming possible to "connect to external data in real time," rather than the traditional approach of "submitting fixed video content in advance for playback."

So, what happens? The strengths of OOH we discussed earlier—that "if you see it here, right now, you might fall in love at first sight"—are now powerfully reinforced by real-time capabilities and external data.

■Huh? Just as it starts raining, "How about an umbrella?"
■"A refreshing new product just launched!" when you feel, "It's hot today..."

By linking with external data in real time, digital signage can now
"right time, right place, right feeling."

When you call your boyfriend and he says, "I was just about to call you," doesn't it suddenly feel like the distance between you has closed, making you happy? I'm sure I'm not the only one who's felt that way.
It's only natural—humans are weak when someone resonates with our "current feelings."

Because it enables dynamic creative deployment, this approach is called Dynamic Digital OOH, or "Dynamic DOOH" for short.

Currently, Dynamic DOOH is more advanced in the UK and US than in Japan. Global client briefs often include a separate "DOOH budget" within OOH, clearly distinguishing digital from non-digital OOH campaigns.

Research comparing the effectiveness of Dynamic DOOH versus traditional DOOH also exists (Figure 1).

Spontaneous recall rate: The percentage of respondents who recalled an ad when asked to name ads they remembered after viewing multiple ads.
Message recall rate: The percentage of respondents who recalled the ad copy when asked to recall the ad copy after viewing multiple ads
Intention to Share Rate: Percentage of respondents who stated they would like to share (post or share) the ad on social media

 

And when this digital signage connects with real-time data, beacons, or social media posts, the possibilities become even more exciting!

In future posts, we'll explore the dynamic world of DOOH—full of possibilities—using real-world examples.