The future of advertising will not be dominated by network TV, declared Sir Martin Sorrell, founder and chair of advertising and marketing conglomerate WPP, in his address to the Marketing Innovation Summit June 14 in Toronto.

Sorrell and other marketing agency leaders delivered their perspectives on the new realities of marketing as a business, including the digital space. They argued that there is a need for precise marketing and communication practices and performance measures that meet the new realties of today’s borderless and diverse consumer market. This is sweet music for digital signage providers and users.

Sorrell’s WPP companies buy one in every four ads worldwide, spending $40 billion annually. He said that TV’s relative power is declining, despite rising cost-per-thousand (CPM), prompting greater experimentation. Fast changing market demographics and consumer behaviors, Sorrell added, necessitate a major shift in how and where marketers communicate with consumers.

Statistics reinforce the need to use different communications approaches for reaching consumers. Wal-Mart In-store Television reaches 200 million consumers monthly in more than 5000 stores where shoppers spend $300 billion annually. Wal-Mart’s In-store network exemplifies innovation at work, said Yasmin Glanville, president of CTR, a strategy and marketing solution consultancy. She added that in-store signage allows consumers to touch and experience product and service choices in the context of where they explore and shop.

In 2004, spending on communication-related subscriptions — such as cell phones, home Internet, cable and satellite TV and radio, etc. — exceeded advertising media buys, according to Terri Tinella, senior vice president for communication and marketing effectiveness at Nestlé Canada. Each subscription takes attention from other media, and the number of channels and viewing options compounds the fragmentation.

Alan C. Middleton, executive director of the Schulich Executive Education Center, noted that intolerance for wasted ad spending is growing, so statistical measurement is imperative and will drive decisions. Trish Wheaton, president of Wunderman Canada, who was recognized as 2004 Marketer of the Year, said the marketing industry needs to move from cost per thousand (CPM) to return on investment (ROI) and investment effectiveness metrics. The shift from “mass” marketing to “measurable” marketing is part and parcel of the shift from network TV to digital signage and purchase location signage.

The future is direct marketing, relevant and accountable, Wheaton added. A key benefit of digital signage is the digital component. An assurance that ads are posted as and when planned, reducing the costs of ad production and display logistics, leveraging production costs, increasing speed-to-display and the cycle time of test-refinement are inherent benefits of digital display networks.

WPP and other marketing agencies are hunting down better marketing communications ROI. The tracks lead to dynamic digital signage, in-store TV and related communications vehicles based at or near the location of consumer spending.

DSU guest contributor Lyle Bunn is director, digital display and rich media, at BTV+ and serves as chair, Education Committee, Digital Signage Group, Point-of-Purchase Advertising International).