The Emergence of Digital Signage and the Narrowcasting Industry

The hallmark of the digital signage industry – its selling point, its raison d’être – is that it allows advertisers to reach an attractive and targeted audience in a captive space. When we talk of a “captive space”, we are talking about a location where there are no other distractions to capture the attention of an audience. The effectiveness of digital signs and narrowcasting networks – those arrays of monitors splaying a mix of advertising and short media pieces or infomercials – is premised on there being a convergence of a desirable target audience, or demographic, in a public or semi-public area where there are little or no other distractions to divert the audience’s attention. Perhaps the classic example of such a “captive space” is a building’s lobby (public space) or an office waiting room (semi-public space).

When we think of an office lobby or waiting room, the stereotypical picture is of an open space with some seating, perhaps a receptionist and some magazines and, maybe, a television set. As technologies developed that allowed marketers to provide focused marketing and media content via digital signage and narrowcasting networks, it was quickly realized that lobbies and waiting rooms were an ideal confluence of a targeted audience with copious idle time and little or no distraction. (It is perhaps no coincidence that visitors to a doctor’s office are called “patients”, as patience is the chief characteristic they are forced to cultivate in the doctor’s “waiting” room.) Where formerly visitors would be distracted with racks of magazine in such public or semi-public areas, it was recognized that focused media entertainment and advertising content could serve a double purpose – providing a much welcomed distraction for a restive audience, while providing advertisers with an identifiable targeted audience.

Having identified a lucrative marketing demographic or audience, the question then became how best to take advantage, or monetize, this rich marketing niche. The answer was really two-fold. First, it was recognized that a captive audience in a captive space was an ideal market for traditional advertising. Moreover, where public broadcasting through TV and radio market was, and is, aimed at a broad audience (only loosely defined by the age, sex and income and other demographics etc. of the broadcast audience), narrowcasting is aimed at a very particular audience (the particular demographic of people who are likely to be in a particular captive space). It was quickly realized that such a targeted audience was a boon to advertisers, and narrowcast providers quickly began to install their systems in public and semi-public areas, paying a portion of the revenue they generated from advertisers to the buildings owners or occupants. Narrowcast networks quickly became an excellent source of additional revenue for landlords, institutions and office managers.

Secondly, businesses with large waiting rooms and lobbies quickly realized that their target audience – their clients an customers – had essentially self-selected themselves. Narrowcasting networks and digital signage, generally, were seen as an ideal way to market to customers and clients, and to upsell them by advertising additional products and services than appeal to their particular demographic. Installing and running digital signs and narrowcast networks was seized upon as a means of generating additional revenue from an existing clientele.

As the digital advertising software that runs digital signs and narrowcasting networks has become increasingly refined, and as the hardware that runs such systems has become more affordable, digital signage began to proliferate. In most instances, digital signs and narrowcast networks will still generate revenue from one or both of these marketing models. In many instances, a combination of both models is used. One of the best examples of such hybrid marketing platforms is the proliferation of narrowcast monitors on gasoline pumps. Narrowcasting networks advertising both peripheral products available at service stations (e.g., car washes, oil changes, coffee and fast food items) and products and services of third-party paid advertisers have become staples in the petroleum industry.

It is now common fare for motorists filling their tanks to watch an array of short news, sports and entertainment clips interspersed with targeted advertisements as they pump gas. Advertisers reach a targeted niche demographic in a captive space, service station owners generate additional revenue streams from both direct and indirect marketing, and drivers get a reprieve, be it ever so briefly, from the cost of the fill up.