A breakfast chat at DSE about measurement as it relates to DOOH advertising has lingered in my mind. As mentioned in a post-DSE blog entry, Nikki Baird of RSR observed that advertisers and agencies seem to clamor for their comfort zone of traditional CPM (cost per thousand impressions) when evaluating a DOOH buy. Despite the increasing number of devices and schemes being brought to market to provide some proxy for measurement (of traffic, eyeballs, and with some occasional gaffes, gender) in a digital signage environment, it seems to me that the angst of the agencies is NOT about measurement itself: it is about value.

It is fair to say that advertising dollars do not and will not grow in aggregate in perpetuity. Recent evidence from big agencies seems to indicate that the big ad bucket will actually hold less water in 2009. So what really matters is how those precious dollars are allocated. To be sure, over the past two or three years, we have seen a marked shift toward alternative media, which includes the Internet, mobile and DOOH vehicles. Advertisers moving into these alternative channels do so with recognition that there are good reasons to be there.

Given their static or possibly shrinking budgets, media buyers must take a marketing Hippocratic oath when making their brand building investments, in effect “to do no harm” by shifting their allocations and making new buys. That is not always something that can be done with assurance when shifting from the established science of traditional media buys to the new world of digital media buys. Internet click-throughs and mobile opt-ins and SMS campaigns provide a way to measure interest and response, but advertisers have continued to struggle with the cost effectiveness and value of brand building via those types of campaigns. A typical DOOH campaign does not offer that built-in response meter analogous to click-throughs or text responses, putting a digital signage network buy behind the eight ball even when compared to the other primary digital media options. However, it may be that digital signage can emerge from the haze and claim an increasing share of brand dollars by demonstrating the best value to the advertisers.

The ongoing focus on cost, as measured by CPM or some proxy of CPM generated to placate nervous media buyers, is a red herring. It defies logic to think that 1,000 impressions on television, usually viewed in a home environment, have equal (or greater!) value than 1,000 impressions in an out-of-home environment that provides context for engagement. Perhaps an example would be illustrative. An imaginary CPG company has a new product, an analgesic pain reliever called “Bliss”. The product is great for headaches and muscle pain, but is primarily targeted toward arthritis sufferers and the 45+ demographic. The agency makes traditional buys for Bliss in magazines, newspaper FSIs, and television. Alternative media buys are focused on targeted web sites and a DOOH campaign in doctor offices, grocery stores and pharmacies. The media buyer struggles with the DOOH buy, because she feels the CPM as measured by a formula involving traffic, dwell time and loop length seems “high” to her. She makes the buy desite her hesitance, essentially taking what seems like a leap of faith. But is it a leap? Does a Bliss commercial during Grey’s Anatomy engage the target audience? How many are watching on a DVR, skipping ads? How many use the commercial breaks to do email, get food, or use the bathroom? What can engaged viewers DO if they are favorably impressed? On the other hand, if a Bliss advertisement (perhaps in 15-second short forms, repeated multiple times in an hour) is presented to a potential customer in a medical environment, there is context for engagement, and a halo effect from the environment itself. We know that a large majority of patients visit a pharmacy before going home from their medical appointment, presenting a scenario for multiple engaged impressions. When presented on screen in a pharmacy or grocery venue, the product is nearby and the opportunity to act upon an impression exists where it does not in the den or bedroom. The proper DOOH buy provides targeted viewers, context, credibility and opportunity. These add up to value.

Still, we must get past the leap of faith and provide a measure of that value in order to establish DOOH as a viable candidate for an increasing slice of the brand building spend. I am not sure that will come by measuring footfalls, dwell time or gender with more accuracy, although these measures will play a role in defining the reach of a network. It makes sense that measuring results will validate the value message. To do this, DOOH network owners might have to do a number of things to build their case, which could include the following and more:

• Provide collateral, such as traditional paper coupons, in the area of the digital display. These can easily be coded and measured when they are used.

• Incorporate electronic collateral and calls to action, such as SMS campaigns and web site couponing, into the ads themselves. This would also provide a measure of opt-in activities and potentially conversion.

• Offer samples where appropriate, perhaps including opportunities to receive discounts at retail (again a measurable event)

• Test product movement in stores and/or markets with ads running versus statistically similar stores and markets without the ads running. Calculate lift.

• Measure recall of brand messaging through opt-in email or web surveys after visits to medical or other non-retail venues.

DOOH provides an incredible medium for targeting and messaging consumers in a context conducive to real engagement. How networks, brands and agencies work together to create and place those messages, and then measure results rather than delivery, will dictate how the value of DOOH is perceived. Establishing value moves the conversation away from the traditional dichotomy of cost and gross impressions to one of contextual impressions and results. We need to move as an industry towards a results-centric focus, and in so doing differentiate DOOH from traditional media on value.