This week, Retail Systems Research (RSR) Managing Partners Nikki Baird and Paula Rosenblum published a benchmark study entitled Enabling the Shopping Process: In-Store Marketing for the Empowered Customer. The 30-page report, conducted in partnership with RIS News, delivers some very interesting insights based on survey responses from 88 retail responders. One facet of the study that is of particular interest is how RSR interpreted many results from the perspective of “Winners”, those companies delivering sales growth above industry averages, and “Laggards”, or those who were below the average. Among the key findings of the study is not just that Winners use more in-store marketing tools, but that what sets them apart is the quality “… in objectives set for marketing tools, and the processes used to ensure successful integration into the shopper experience.” Put another way, a shotgun approach of in-store tools may not be as effective as a series of rifle shots squeezed off with a plan in mind. This is consistent with messages delivered by many experts in the digital signage field, who have encouraged the development of objectives and strategies ahead of the selection of technology.
Of course, our focus is on what we can glean from an in-store digital media perspective, and the study delivers useful nuggets to consider. Winners clearly feel compelled to provide more information to consumers in the store, and have invested to understand customer behavior. This is welcome news, and when combined with the identification of “Traditional media’s effectiveness is eroding” as the number two overall business challenge, it certainly sets the stage for increased usage of digital media on the store.
In reporting that respondents focused on the importance of driving sales and margins and providing a consistent marketing message across various channels, the authors note that this represents a “serious disconnect” with the way in-store digital media has been discussed to date. They point out that the apparent focus upon concepts such as “opportunity to view” and “dwell time” obscures the only metric that really matters to retailers: sales lift. I think they are on to something here. The measures that have been getting the attention have done so because they make brand managers and ad buyers more comfortable with making a digital signage network buy. The measurements are an attempt to calibrate a digital signage ad spend along the lines of the eroding traditional media’s established metrics, and from a retail perspective that is a disconnect. The wonderful opportunity of in-store media is the ability to measure effectiveness through product movement at POS. TV ads (other then direct response infomercials) have no choice other than to rely on impressions. In-store media has the unique ability to measure product sales at the point of message delivery.
Do advertisers really care how many people SAW the message, or how many people ultimately ACTED on it? The study showed that in-store media is by far the top vehicle for collaboration with brands, again underscoring the value of measuring differently. It is time to move the dial on this, and it is not going to happen until retailers take ownership of the digital media technologies inside their stores. When they do, and they marry message playout logs with POS movement data, huge insights will be gained. DS-IQ was on this early, and perhaps too early, but the idea is absolutely dead-on. Analytics based on retailer-owned network data and retailer-owned movement data should be far more valuable than only knowing how many people viewed each message. Uplift can easily be measured by comparing control stores (no digital messaging) to active stores. And this won’t happen until one entity owns all the data: the retailer.
There is good news in that there appear to be signs that Winners are starting to connect the dots. They see the opportunity to leverage localized messaging and promotions; they are nearly twice as likely to be using in-store digital media as Laggards; and they are far more concerned with the ability to manage third parties on in-store marketing efforts. All of these trends point toward organizational willingness to take on in-store media as a strategic technology, owned and driven from the inside. This would be a seismic shift.
The study is chock-full of interesting data and insightful analysis, which makes it valuable to anyone who follows, understands, or hopes to play in retail from a marketing and technology perspective. The long awaited shift that will land in-store digital media on the retail application portfolio map seems to be underway. That will have a dramatic impact on the adoption, measurement and value of the technology itself. Bring it on!
Thursday, July 30, 2009
Thursday, July 23, 2009
ROI Matters
We recently referenced some apparent casualties on the solution side of the digital signage space. Meanwhile, there has certainly been no shortage of action on the network side of the digital signage space lately. Amidst mergers, the occasional new network and expansion of existing networks, come rumors that both Ripple TV and CBS Outernet’s Grocery Network (formerly known as SignStorey) are potential casualties in the near future.
Whether the rumors are true or not, the notion that industry consolidation and rationalization would accelerate during a recession should not be counterintuitive. If the rumored situations of Ripple and SignStorey are reality, then they offer separate but somewhat parallel scenarios to discuss, and are part of an important financial trend in our industry.
If in fact Ripple TV is foundering in July after a $4M venture capital injection in late March, then they are burning cash at a rate worthy of a masterless samurai. Further, if their very well known and deep-pocketed financial partners are not stepping up to another round, then they have likely assessed the situation, and must see a further investment as good money after bad. Without passing judgment on Ripple’s strategy or execution, it would seem that someone has determined that the chance to achieve a positive ROI may have gone by the wayside. What else can one infer if two VCs appear willing to turn off the funding spigot?
As for SignStorey, the ROI monster had to rear its ugly head at some point. CBS’ willingness to pay over $70 million for SignStorey a couple of years back was without doubt a watershed event from any perspective. But given the size of their network at the time (1,400 locations), and their reported lack of profitability, it is hard to come up with a rational basis for valuation approaching half the price paid. No subsequent network deal that I am aware of has even approached that level of over-valuation, and it is doubtful any will for the foreseeable future. If one accepts that CBS paid a huge premium above fair market value for SignStorey, it is not a great leap to imagine the suits in New York calculating the IRR on that deal in best, worst and most likely case scenarios. It sounds like the numbers were not encouraging, which is unfortunate.
It is ironic that CBS’ grocery network is often co-located with PRN’s Checkout TV, with CBS on the perimeter, and PRN in the checkout lanes. The fact that PRN, acquired by Thomson 2005 for a princely sum, has been on the block for quite some time is not a secret. The executive brain drain is ongoing, and there doesn’t appear to be many takers for a company that was once the darling of the industry. The fact is that the people who got ROI on PRN were the sellers in 2005, and did they ever cash in! Thomson, on the other hand, has already done the math and made it clear that they just want to recover whatever they can on their purchase. Regardless of the cause for the decline, at the root of it all is the fact that Thomson (like CBS) overpaid, perhaps based on the unmet expectation that WalMartTV would be a cash cow for them, or that synergy with Technicolor would unleash even more value. Again, buyers and investors demanding ROI appear ready to cut their losses.
The brutally over-analyzed Danoo/IdeaCast/NCM deal spawned debates and comparisons to the PRN and SignStorey deals in terms of their significance to the industry. All three are significant, but the comparison ends there. Because the SignStorey and PRN deals were behind the ROI eight-ball before they started, the current chain of events was a high probability event. Where the difference lies is in how the Danoo deal was done. I commented on a post-mortem written by Dave Weinfeld on his blog:
“By comparison, NCM bought into IdeaCast by assuming debt and wiping out the equity holders, according to reports. They subsequently leveraged that position into a 20% stake in Danoo, becoming partners with Danoo's deep pocketed backers, Kleiner Perkins. The cost was manageable, risk shared with savvy investors, and an exit strategy appears obvious, at least to observers like us. The variable, of course, is the subsequent performance of the new company. So it is not a slam dunk, but RISK has been managed by both NCM and Kleiner. The terms and the shared risk and vision make this deal very different than the others.”
There are two clear trends, the veracity of the rumors notwithstanding, to be observed here. First, that every deal must eventually demonstrate a clear path to ROI to investors in order to have access to continued funding; and second, that the experienced institutions are looking harder at both valuation and risk management on every deal. Combined, they portend more realistic valuations in funding and M&A deals, and more creative partnering to mitigate risk. If more realistic valuations also come with a commitment to see the investment through, then perhaps that is not a bad tradeoff.
Whether the rumors are true or not, the notion that industry consolidation and rationalization would accelerate during a recession should not be counterintuitive. If the rumored situations of Ripple and SignStorey are reality, then they offer separate but somewhat parallel scenarios to discuss, and are part of an important financial trend in our industry.
If in fact Ripple TV is foundering in July after a $4M venture capital injection in late March, then they are burning cash at a rate worthy of a masterless samurai. Further, if their very well known and deep-pocketed financial partners are not stepping up to another round, then they have likely assessed the situation, and must see a further investment as good money after bad. Without passing judgment on Ripple’s strategy or execution, it would seem that someone has determined that the chance to achieve a positive ROI may have gone by the wayside. What else can one infer if two VCs appear willing to turn off the funding spigot?
As for SignStorey, the ROI monster had to rear its ugly head at some point. CBS’ willingness to pay over $70 million for SignStorey a couple of years back was without doubt a watershed event from any perspective. But given the size of their network at the time (1,400 locations), and their reported lack of profitability, it is hard to come up with a rational basis for valuation approaching half the price paid. No subsequent network deal that I am aware of has even approached that level of over-valuation, and it is doubtful any will for the foreseeable future. If one accepts that CBS paid a huge premium above fair market value for SignStorey, it is not a great leap to imagine the suits in New York calculating the IRR on that deal in best, worst and most likely case scenarios. It sounds like the numbers were not encouraging, which is unfortunate.
It is ironic that CBS’ grocery network is often co-located with PRN’s Checkout TV, with CBS on the perimeter, and PRN in the checkout lanes. The fact that PRN, acquired by Thomson 2005 for a princely sum, has been on the block for quite some time is not a secret. The executive brain drain is ongoing, and there doesn’t appear to be many takers for a company that was once the darling of the industry. The fact is that the people who got ROI on PRN were the sellers in 2005, and did they ever cash in! Thomson, on the other hand, has already done the math and made it clear that they just want to recover whatever they can on their purchase. Regardless of the cause for the decline, at the root of it all is the fact that Thomson (like CBS) overpaid, perhaps based on the unmet expectation that WalMartTV would be a cash cow for them, or that synergy with Technicolor would unleash even more value. Again, buyers and investors demanding ROI appear ready to cut their losses.
The brutally over-analyzed Danoo/IdeaCast/NCM deal spawned debates and comparisons to the PRN and SignStorey deals in terms of their significance to the industry. All three are significant, but the comparison ends there. Because the SignStorey and PRN deals were behind the ROI eight-ball before they started, the current chain of events was a high probability event. Where the difference lies is in how the Danoo deal was done. I commented on a post-mortem written by Dave Weinfeld on his blog:
“By comparison, NCM bought into IdeaCast by assuming debt and wiping out the equity holders, according to reports. They subsequently leveraged that position into a 20% stake in Danoo, becoming partners with Danoo's deep pocketed backers, Kleiner Perkins. The cost was manageable, risk shared with savvy investors, and an exit strategy appears obvious, at least to observers like us. The variable, of course, is the subsequent performance of the new company. So it is not a slam dunk, but RISK has been managed by both NCM and Kleiner. The terms and the shared risk and vision make this deal very different than the others.”
There are two clear trends, the veracity of the rumors notwithstanding, to be observed here. First, that every deal must eventually demonstrate a clear path to ROI to investors in order to have access to continued funding; and second, that the experienced institutions are looking harder at both valuation and risk management on every deal. Combined, they portend more realistic valuations in funding and M&A deals, and more creative partnering to mitigate risk. If more realistic valuations also come with a commitment to see the investment through, then perhaps that is not a bad tradeoff.
Saturday, July 18, 2009
Scattering Our Way?
Our industry has been showing some serious signs of maturity lately. Breathless press releases touting 20 location deals have been supplanted by news of consolidations on the network side, thinning of the ranks on the vendor side, and even initial attacks from privacy advocates that signal acceptance of the technology just as much as fear of its reach. Business activity during a deep global recession has been surprisingly brisk. If there is one missing piece from the puzzle that would transform the industry in a permanent and significant way, it would be the meaningful acceptance of digital signage by media planners and buyers.
To be sure, there have been signs of movement and nice tests from very big brands, perhaps most notably Schering-Plough. And make no mistake, some networks are consistently selling advertising, although there is no doubt each would benefit from higher CPMs that increased demand might lead to for them. But one does not get the sense (yet) that digital signage as a media is a part of the plan for most media buyers and brands. Anyone who navigates through the web will intuitively know that the major automobile companies have internet advertising as a budgeted part of their media plan. There are certain sites that are more or less permanent parts of their Internet buy, probably signaling measurable ROI. And it is clear that buyers will test new and ostensibly attractive sites in hope of finding a winner. In any case, there is little doubt that Chevrolet, for example, has a certain number of millions earmarked for web-based advertising. That same clear evidence of an earmarked budget for digital signage has just not become obvious. It is fair to say that certain networks have developed relationships with some brands that are mutually beneficial, but there is a long way to go. When we get there, the better networks will realize higher rates, and the developing networks will get more chances to prove their value.
There are many signs that it is not just wishful thinking to imagine digital signage having a visible slice of the pie chart at the quarterly budget meetings. Inside our industry, more and more ad-selling businesses are popping up to compete with the leading DS aggregators, Adcentricity and SeeSaw. While their models and value propositions may differ, the emergence of offerings like rVue and Entourage certainly indicate that investors and entrepreneurs see opportunity, and there will be others. Alliances of networks in related businesses have also cropped up, in an effort to cross sell advertising and to gain expanded reach. These will work, where the quality of the networks working together is uniformly high. We have already seen alliances of the nearly dead that will not fool anyone.
Externally, there also appear to be signs that there is more than hope. In an excellent, must-read blog post, MediaPost editor-at-large Diane Mermigas examines the apparent movement from traditional TV upfront buying to a strategy of “scatter” buying. Indeed TV ad buying seems to be moving to a just-in-time mentality, even if spot costs in the scatter market are higher than upfront costs. The logic would appear to be that buying the right spots as needed (with the luxury of determining need dynamically) is worth a premium. The fragmentation of TV audiences, universally referenced in digital signage pitches, is finally resonating as well. Mermigas observes:
“The ever-dwindling ratings and audience shares continue to be a drag on advertiser enthusiasm. More advertisers are feeling comfortable with more targeted, quantifiable ad placement online and a collective multimedia strategy that includes TV.”
Hmmmm. That sure is music to my ears, coming from someone who lives in traditional media. Ms. Mermigas quotes OMD’s CEO Alan Cohen from an interview in AdAge this week, "This situation has made us look at some alternatives that will give clients the ability to reach broad audiences in a different way." Somebody buy that man a drink! This is a tidal movement. While digital signage may be hidden behind words like “alternatives” and “multimedia”, we appear to be on the radar where it matters.
TV advertising has absorbed billions of dollars annually for decades. That industry is clearly undergoing fundamental changes, driven by advertisers’ desire and ability to target ever more efficiently. You can bet the TV networks will respond with better deals upfront, and probably punitive rates for high demand scatter spots. But the die seems to be cast, and advertisers and their media buyers are looking our way. Mermigas ends her post by saying, “…advertisers, agencies and media companies are embracing alternatives that will hold long after the recovery is underway.”
As digital signage networks position themselves to receive that embrace with quality offerings, standard metrics and tangible results, the last piece of the maturity puzzle will fall into place. When it does, things just won’t be the same, in a very good way.
To be sure, there have been signs of movement and nice tests from very big brands, perhaps most notably Schering-Plough. And make no mistake, some networks are consistently selling advertising, although there is no doubt each would benefit from higher CPMs that increased demand might lead to for them. But one does not get the sense (yet) that digital signage as a media is a part of the plan for most media buyers and brands. Anyone who navigates through the web will intuitively know that the major automobile companies have internet advertising as a budgeted part of their media plan. There are certain sites that are more or less permanent parts of their Internet buy, probably signaling measurable ROI. And it is clear that buyers will test new and ostensibly attractive sites in hope of finding a winner. In any case, there is little doubt that Chevrolet, for example, has a certain number of millions earmarked for web-based advertising. That same clear evidence of an earmarked budget for digital signage has just not become obvious. It is fair to say that certain networks have developed relationships with some brands that are mutually beneficial, but there is a long way to go. When we get there, the better networks will realize higher rates, and the developing networks will get more chances to prove their value.
There are many signs that it is not just wishful thinking to imagine digital signage having a visible slice of the pie chart at the quarterly budget meetings. Inside our industry, more and more ad-selling businesses are popping up to compete with the leading DS aggregators, Adcentricity and SeeSaw. While their models and value propositions may differ, the emergence of offerings like rVue and Entourage certainly indicate that investors and entrepreneurs see opportunity, and there will be others. Alliances of networks in related businesses have also cropped up, in an effort to cross sell advertising and to gain expanded reach. These will work, where the quality of the networks working together is uniformly high. We have already seen alliances of the nearly dead that will not fool anyone.
Externally, there also appear to be signs that there is more than hope. In an excellent, must-read blog post, MediaPost editor-at-large Diane Mermigas examines the apparent movement from traditional TV upfront buying to a strategy of “scatter” buying. Indeed TV ad buying seems to be moving to a just-in-time mentality, even if spot costs in the scatter market are higher than upfront costs. The logic would appear to be that buying the right spots as needed (with the luxury of determining need dynamically) is worth a premium. The fragmentation of TV audiences, universally referenced in digital signage pitches, is finally resonating as well. Mermigas observes:
“The ever-dwindling ratings and audience shares continue to be a drag on advertiser enthusiasm. More advertisers are feeling comfortable with more targeted, quantifiable ad placement online and a collective multimedia strategy that includes TV.”
Hmmmm. That sure is music to my ears, coming from someone who lives in traditional media. Ms. Mermigas quotes OMD’s CEO Alan Cohen from an interview in AdAge this week, "This situation has made us look at some alternatives that will give clients the ability to reach broad audiences in a different way." Somebody buy that man a drink! This is a tidal movement. While digital signage may be hidden behind words like “alternatives” and “multimedia”, we appear to be on the radar where it matters.
TV advertising has absorbed billions of dollars annually for decades. That industry is clearly undergoing fundamental changes, driven by advertisers’ desire and ability to target ever more efficiently. You can bet the TV networks will respond with better deals upfront, and probably punitive rates for high demand scatter spots. But the die seems to be cast, and advertisers and their media buyers are looking our way. Mermigas ends her post by saying, “…advertisers, agencies and media companies are embracing alternatives that will hold long after the recovery is underway.”
As digital signage networks position themselves to receive that embrace with quality offerings, standard metrics and tangible results, the last piece of the maturity puzzle will fall into place. When it does, things just won’t be the same, in a very good way.
Tuesday, July 14, 2009
Chalk Talk
It probably won’t make me many friends in Seattle, but as a card carrying Starbucks addict, I am going to go ahead and call out the Kings of Caffeine. In the spirit of full disclosure, I am also a card carrying digital signage evangelist and solution provider, but I think that is clear from the blog site. So here we go: it is time for Starbucks to drop their stance that digital displays would be out of place in their ubiquitous and delightfully aromatic locations. The chalkboards are cute, and it does amaze me that every location seems to have someone with the ability to draw a caramel macchiato that looks exactly like the one across town. But let’s be honest. The average Starbucks has become a maze of hand drawn signs, computer printed announcements, and corporate-mandated posters and banners. From a marketing perspective, it is an absolute minefield of missed opportunities. Here is a picture showing a glimpse of the messaging mess at the cream and sugar counter at my local store.
Not in the frame were the huge basket urging customers to contribute food to a local soup kitchen, a promotion on coffee beans, several pieces pushing smoothies, special deals on discontinued espresso makers and much, much more. More than I can process before that Grande Bold hits my brain.
Let’s take a look at the marketing messages that are wafting through the air at a typical Starbucks:
1. Buy the new breakfast foods with a special combo deal
2. Try a Vivanno smoothie. (Not sure if this one has caught on yet)
3. Buy beans
4. Buy a mug or coffee maker
5. Donate to our troops or homeless people
6. Starbucks is green
7. Starbucks believes in fair trade and ethical treatment of growers
8. Starbucks has eliminated artificial ingredients in the prepared foods
9. Buy the music you are listening to
10. Grab the free iTunes download of the week
11. Get a Starbucks gold card
12. Get a Starbucks credit card
13. Think about a lunch sandwich
14. Come back after 2 PM for an afternoon pick-me-up
15. Enjoy the WiFi
16. We are part of the community
17. We sell really good coffee
There is a lot to impart to the folks as they wait to order, receive and doctor up their drinks. Starbucks relies upon a mixture of printed collateral, handmade signs, chalkboard announcements and expensive posters to get some of these messages across. They apparently hope to impart some messages subliminally. Regardless of what they may believe, while that approach may reinforce a casual, non-threatening feel, it does not take advantage of the multiple marketing opportunities presented by every customer visit. And it gets messy.
With just a single digital screen in the average location, Starbucks could clean up most of the clutter and deliver a consistent, updated and location-specific set of marketing messages that address every item on the list above, and 17 more that I probably missed. They would not have to (or ever want to) make it an ad-based network, as they are all about branding and experience. That is a huge positive. I do not claim to be a content expert, but it would be easy for Starbucks to come up with an appropriate and superior content strategy that differentiates it from Danoo, Ripple and other digital signage operators that have played in the coffeehouse field. They could easily reset the bar.
Think about how they could market the music more effectively. Think about the possibility of using a zone or a full screen segment in the loop to engage customers who have a Starbucks app on their cell phone. Imagine getting someone like me to consider a Vivanno or some Perfect Oatmeal. Picture a description of today’s brews scrolling along the bottom. Think about the potential to reinforce the Starbucks brand and experience with great video content (no sound required). I once actually saw a digital display in a New York location, but I could not tell if that was a test or a random event. Maybe Starbucks is testing something now, or has tested digital signage in the past. If those tests failed, they should take another look and engage smarter consultants and partners. I haven’t seen a more obvious case for using digital signage to advance a business strategy.
The time is now. The need and opportunity to drive sales increases is readily apparent. The technology works. The bandwidth is there. The ROI is easily measurable with a simple and inexpensive test. Customers might actually appreciate it. And call me crazy, but I’d wager that a well-produced, 10-second video piece showcasing that caramel macchiato will sell better than the chalkboard picture. Dive on in, Starbucks, the water’s fine!
Not in the frame were the huge basket urging customers to contribute food to a local soup kitchen, a promotion on coffee beans, several pieces pushing smoothies, special deals on discontinued espresso makers and much, much more. More than I can process before that Grande Bold hits my brain.
Let’s take a look at the marketing messages that are wafting through the air at a typical Starbucks:
1. Buy the new breakfast foods with a special combo deal
2. Try a Vivanno smoothie. (Not sure if this one has caught on yet)
3. Buy beans
4. Buy a mug or coffee maker
5. Donate to our troops or homeless people
6. Starbucks is green
7. Starbucks believes in fair trade and ethical treatment of growers
8. Starbucks has eliminated artificial ingredients in the prepared foods
9. Buy the music you are listening to
10. Grab the free iTunes download of the week
11. Get a Starbucks gold card
12. Get a Starbucks credit card
13. Think about a lunch sandwich
14. Come back after 2 PM for an afternoon pick-me-up
15. Enjoy the WiFi
16. We are part of the community
17. We sell really good coffee
There is a lot to impart to the folks as they wait to order, receive and doctor up their drinks. Starbucks relies upon a mixture of printed collateral, handmade signs, chalkboard announcements and expensive posters to get some of these messages across. They apparently hope to impart some messages subliminally. Regardless of what they may believe, while that approach may reinforce a casual, non-threatening feel, it does not take advantage of the multiple marketing opportunities presented by every customer visit. And it gets messy.
With just a single digital screen in the average location, Starbucks could clean up most of the clutter and deliver a consistent, updated and location-specific set of marketing messages that address every item on the list above, and 17 more that I probably missed. They would not have to (or ever want to) make it an ad-based network, as they are all about branding and experience. That is a huge positive. I do not claim to be a content expert, but it would be easy for Starbucks to come up with an appropriate and superior content strategy that differentiates it from Danoo, Ripple and other digital signage operators that have played in the coffeehouse field. They could easily reset the bar.
Think about how they could market the music more effectively. Think about the possibility of using a zone or a full screen segment in the loop to engage customers who have a Starbucks app on their cell phone. Imagine getting someone like me to consider a Vivanno or some Perfect Oatmeal. Picture a description of today’s brews scrolling along the bottom. Think about the potential to reinforce the Starbucks brand and experience with great video content (no sound required). I once actually saw a digital display in a New York location, but I could not tell if that was a test or a random event. Maybe Starbucks is testing something now, or has tested digital signage in the past. If those tests failed, they should take another look and engage smarter consultants and partners. I haven’t seen a more obvious case for using digital signage to advance a business strategy.
The time is now. The need and opportunity to drive sales increases is readily apparent. The technology works. The bandwidth is there. The ROI is easily measurable with a simple and inexpensive test. Customers might actually appreciate it. And call me crazy, but I’d wager that a well-produced, 10-second video piece showcasing that caramel macchiato will sell better than the chalkboard picture. Dive on in, Starbucks, the water’s fine!
Wednesday, July 01, 2009
Sensing a Trend
It is always worth doing some investigation when you see an example of two West Coast venture giants fighting over the right to fund an early stage tech company... in SoHo. For Silicon Valley types to get hyped up about a technology idea that exists more than a hour’s drive from the Pacific Ocean is unusual. My theory on this is less about techno-xenophobia and more about a distaste for flying to Board meetings. In any event, the news of Sense Networks receiving $6 million in funding from Intel, who beat out Sequoia for the honor, deserves attention.
Sense Networks was founded in 2003 and incorporated in 2006. The founders are a group of “top computer scientists” from M.I.T. and Columbia. I get the feeling that the water cooler, foozball and lunch table chatter at their place is on a level out of range of my intellectual radar. Given their origins, I wonder how much Red Sox-Yankees smack talk works its way into debates over Minimum Volume Embedding and Machine Learning. The company has used those two principles to make some sense out of ubiquitous location data that emanates from “…cars, buses, taxis, mobile phones, cameras, and personal navigation devices.” The company takes opt-in and anonymized (they even have a Chief Privacy Advocate) location data from the various devices, and through a series of algorithms, historical normalization and external data analysis, comes up with what appears to be useful information. They are able to categorize behavior and movement data into “tribes” of similar people who exhibit similar “spatiotemporal” activities. I am hoping one doesn't go blind from that. A visual representation of tribal movement on a San Francisco night is in the middle of this page.
Sense Networks has introduced its first application, called Citysense, which lets opt-in smartphone users determine the age-old night time question, "Where is everybody going right now?" In this case “everybody” are those people in the city where you are at the moment who have exhibited similar spatiotemporal behavior to you, wherever you may live. The application pops up a list suggesting where your tribe is hanging out (or tribes, if you tend to mix it up). Pretty neat.
So why would a digital signage geek care about this? Let’s think about applications that may be useful. Wouldn’t potential advertisers be interested in the movement behavior of network viewers before and after their exposure to a marketing message? Or perhaps learn a bit about the multi-tribal characteristics of viewers based on time of day? Would it be effective to understand what percentage of doctor office visitors went to a pharmacy after their appointment… and which one? Could real time data on the nature of viewers in proximity of the screen be used to drive “smart” content and advertising playout? There is something there.
Whether or not Sense Networks breaks through and finds the way to monetize their slick algorithms and management of data is not important in the big picture, although I wish them much success. What is important is that investments are being made to help make sense of the marriage of mobile devices, location data and personal preferences. This insight will find its way to digital signage network operations. Prepare yourself for context- and audience- relevant content. It makes Sense.
Sense Networks was founded in 2003 and incorporated in 2006. The founders are a group of “top computer scientists” from M.I.T. and Columbia. I get the feeling that the water cooler, foozball and lunch table chatter at their place is on a level out of range of my intellectual radar. Given their origins, I wonder how much Red Sox-Yankees smack talk works its way into debates over Minimum Volume Embedding and Machine Learning. The company has used those two principles to make some sense out of ubiquitous location data that emanates from “…cars, buses, taxis, mobile phones, cameras, and personal navigation devices.” The company takes opt-in and anonymized (they even have a Chief Privacy Advocate) location data from the various devices, and through a series of algorithms, historical normalization and external data analysis, comes up with what appears to be useful information. They are able to categorize behavior and movement data into “tribes” of similar people who exhibit similar “spatiotemporal” activities. I am hoping one doesn't go blind from that. A visual representation of tribal movement on a San Francisco night is in the middle of this page.
Sense Networks has introduced its first application, called Citysense, which lets opt-in smartphone users determine the age-old night time question, "Where is everybody going right now?" In this case “everybody” are those people in the city where you are at the moment who have exhibited similar spatiotemporal behavior to you, wherever you may live. The application pops up a list suggesting where your tribe is hanging out (or tribes, if you tend to mix it up). Pretty neat.
So why would a digital signage geek care about this? Let’s think about applications that may be useful. Wouldn’t potential advertisers be interested in the movement behavior of network viewers before and after their exposure to a marketing message? Or perhaps learn a bit about the multi-tribal characteristics of viewers based on time of day? Would it be effective to understand what percentage of doctor office visitors went to a pharmacy after their appointment… and which one? Could real time data on the nature of viewers in proximity of the screen be used to drive “smart” content and advertising playout? There is something there.
Whether or not Sense Networks breaks through and finds the way to monetize their slick algorithms and management of data is not important in the big picture, although I wish them much success. What is important is that investments are being made to help make sense of the marriage of mobile devices, location data and personal preferences. This insight will find its way to digital signage network operations. Prepare yourself for context- and audience- relevant content. It makes Sense.
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