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The Economist Media Convergence Forum

 The Economist Media Convergence Forum

The Moment of Truth: Consumers, Technology and Commerce
The Altman Building, New York City, October 20-21, 2009
 

NEW YORK, NY—October 26, 2009—The Economist Media Convergence Forum was a 2-day event that brought together thought leaders, technology experts, and marketing professionals to address the new realities facing marketers today.

New technologies have emerged that have changed the way consumers interact with brands, and advertisers now have more direct interaction with consumers. These relational changes have had a big impact on how brand messages are delivered. It’s a connected universe. For a brand to succeed in today's marketplace, marketers need to craft a compelling story that can live in all places, and across all media channels.

Understanding Consumer Behaviour: The Moment of Truth

“Brand loyalty is declining, and people are willing to buy something else,” said Tom Moseman, Senior Vice President, Sales and Marketing at Envirosell, a global research and consulting firm specializing in the study of human behavior in retail, service, home, and online environments.

Tom Standage, Business Affairs Editor at The Economist, moderated the discussion on Understanding Consumer Behaviour: The Moment of Truth. Candace Adams, President of Global Retail Strategy at SmartRevenue, and Noam Levavi, President and Founder of YCD Multimedia, joined Mr. Moseman on the panel, exploring the technological and psychological issues facing marketers who are trying to connect with consumers in today’s media environment.

Retailers have long wanted to unlock the secrets of the consumer’s mind in order to refine their message and target advertising with greater accuracy. New technologies that measure and track what a shopper is looking at within a retail environment are available and being used with greater frequency. Facial recognition that can categorize and differentiate between age and gender are being used with digital signage systems to control what content is being displayed at the point-of-sale. These systems have demonstrated a significant sales uplift when the right content is played at the right time.

“The content has to be made specifically for the in-store environment in order for it to be effective,” said Mr. Levavi of YCD Multimedia, a full service digital signage provider with expertise in retail, hospitality, and leisure brands. He spoke about how their software incorporates tools that enables marketers to optimize content on digital signage systems. YCD presented several case studies of their work with Burger King and Pizza Hut, demonstrating the effectiveness of digital signage at the point-of-sale.

Another interesting point raised during the panel discussion touched on the advantages of digital signage over traditional static signage. “Studies have shown that there’s no significant difference [in sales lift] between paper versus digital signage,” said Mr. Moseman. “It’s all about the location and product offer.”

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Why the Recession Has Been Good for the Digital Signage Industry

The effects of the economic headwinds on digital out-of-home media, and
why the recession has been good for the digital signage industry.

Strategy Institute's 4th Annual Digital Out-of-Home
Media Investor Conference

The effects of the economic headwinds on digital out-of-home media, and why the recession has been good for the digital signage industry.

Last year’s Digital Signage Investor Conference was notable for the events that preceded the conference. The economic crisis that led to the current recession had just started to unfold. Rumors were everywhere, and a cloud of uncertainty hung over the event.

Fast-forward to today. The effects of the recession on the digital out-of-home industry was the thread among presenters at Strategy Institute’s 4th Annual Digital Signage Investor Conference, a 2-day event held on October 6th to 7th at the Embassy Suites Hotel in lower Manhattan.

The Rules of Engagement Have Changed

“Bad economies make opportunities for seismic changes in consumer behavior,” said Beth Ann Kaminkow, President & COO of TracyLocke, a Dallas-based integrated marketing agency and a keynote speaker for the event.

Consumers are asking deeper questions about their own purchase decisions. Retailers report that shoppers are making fewer impulse buys—a big change for the retail industry compared with only a couple of years ago. Consumers are trading down and their decisions are now driven by price.

“Marketers need to understand that the rules of engagement have changed,” said Ms. Kaminkow. The consumer’s shopping rituals have changed, engagement now happens online and instore. “Marketers need to challenge old assumptions. Young consumer’s perceptions are different, the old methods don’t apply anymore,” said Ms. Kaminkow.

The recession has created a shift in power, destroying billions of dollars in brand equity and consumer loyalty. While some companies have declined, other companies have emerged as winners. Consumers are placing greater value on invention, innovation, authenticity, and integrity.

“This recession has accomplished what marketers spend lifetimes trying to do: disrupt ingrained purchase behaviors and encourage change,”— Kelton Research

A brand’s power to influence consumers through traditional media has become greatly diminished. The retail experience has changed due to the increased influence of the Web. Consumers have gone ROBO (Researching Online, Buying Offline). Advertisers who are looking to connect with consumers need to have a deeper understanding of the journey that shoppers make on their path-to-purchase. Today, more consumers are doing product research outside of the store venue then ever before; however, 50% of all purchase decisions are still made in-store.

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Advertisers Are Turning to Digital Signage Salon Networks to Reach Upscale, Affluent Consumers

The relationship between advertisers and consumers has flipped. Consumers are now in control—they decide when, where, and how they will view content. They're multitasking different media and skipping ads. Advertisers looking to reach affluent consumers have had an increasingly difficult task.
That's one of the many reasons digital out-of-home media is increasingly being sought out by advertisers looking to reach consumers. One of the prime digital out-of-home venues advertisers are now turning to is the salon marketplace. As a medium, place-based digital signage networks command attention—and can’t be switched off.

Hair and nail salons offer an ideal environment for advertising and product placement. Salon-based networks provide advertisers with reach, frequency, and attention. According to the Salon Industry Association, 50% of women go to a hair salon every 6 to 8 weeks, and 72.5% visit nail salons every 2 weeks. The average salon client spends between 30 and 60 minutes receiving salon services.

Demographics have revealed that 90% of salon clients are female with more than 40% reporting a household income of more than $100K. Forty-eight percent work as managers, and more than 50% are college educated. In addition, more than 70% claim to make purchases based on quality, rather than price. 

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