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In the News

March 11, 2005

San Jose Business Journal MediaTile Turns to Wireless as Way to Keep Ads Updated

by Janet Rae-Dupree
jraedupree@bizjournals.com

They can try catching consumers’ attention with billboards, glossy magazine fold-outs, television advertising and radio spots. But advertisers know that the final decision for brick-and-mortar retail sales occurs at the store shelf.

Sign Lights Way: MediaTile CEO Keith Kelsen demonstrates one of their point-of-purchase digital advertising signs that can be updated using a cellular network. (Dennis G. Hendricks photo)

And Keith Kelsen believes his new company has found the most direct path for advertising at that final point of sale. Using wireless cellular technology, The MediaTile Co., a digital signage start-up based in Scotts Valley, can transmit up-to-the-minute information to plasma screens installed anywhere in the world.

Brands spend $17 billion a year trying to get our attention at the shelf, Mr. Kelsen notes. Typically, it takes three months for point-of-purchase materials to get on the shelf, if it gets there at all. It’s a big pain point between the retailer and the brands.

Other companies have tried to peddle digital signs for retail shelves, but those earlier attempts have required wiring each store to deliver broadband Inter- net data at each shelf location. Few stores have the IT expertise required to accomplish such a task.

But a MediaTile flat-panel advertising screen requires only an electrical outlet. A store clerk need only hang it up, plug it in and walk away, Mr. Kelsen says. The rest is done over the Verizon cellular network, which transmits new content to the sign any time the store or retail brand manager orders up the change on a Web site. Soon, MediaTile plans to offer interactive services that would let consumers connect via voice or the Web with manufacturers right there at the shelf to ask questions, compare products or learn more about an item they’re considering buying.

Eventually, Mr. Kelsen envisions advertising screens ranging from six-inch shelf windows to 60-inch wall boards. MediaTile calls its current all-in-one package The MediaCast System. Users pay a monthly fee for content delivery and can either buy a 17-inch screen out- right for $1,600 or lease equipment as it’s needed. Buffalo Technology USA, the Austin, TX-based maker of both wired and wireless network equipment, began deploying MediaTile signs at 27 Fry’s Electronics stores shortly before last year’s holiday shopping season.

We chose The MediaCast System because it provides us with a tremendous competitive advantage, and time-to-market advantage, says Stephen Dix, Buffalo’s vice president of sales and a MediaTile advisory board member. Until now, we had absolutely no way to deploy dynamic digital signs where we can test and change content at will.

The company has been transmitting videos and will experiment with interactive comparison charts. This is the type of technology that you wonder where it’s been all your life, Mr. Dix says.

Later this month, a Midwestern grocery store chain will deploy 500 units at checkout stands to broadcast local advertising. Companies throughout Australia, Canada, Ireland and Europe are experimenting with the system, too, Mr. Kelsen says. While he won’t discuss numbers, he does acknowledge that unit deployments are running roughly five times over what he initially anticipated.

Chris Shipley, producer of the DEMO- Mobile show where MediaTile made its debut in September, says the company is among the first to take advantage of the broadband data networks deployed by cellular networks like Verizon. It’s a fresh and unique approach, she said as she introduced the company.

While still a niche space, digital signage shows signs of becoming the next killer application for the professional audio-visual industry. Sanju Khatr, a senior analyst with El Segundo-based marketing consultant iSuppli Corp., estimated in 2003 that the dynamic digital signage market generated $557 million in revenue and would grow to generate $1.2 billion by 2007. Other descriptions for the emerging industry include dynamic visual messaging and the outernet.

Mr. Kelsen, who serves as president and CEO, founded the company in No- vember 2002 after having a frustrating time while out CD shopping. I picked up a CD off the shelf and thought I should be able to know more about it right there - hear it, see it, get more information about it, he says.

He drew on his experienceas co- founder of Enterprise Broadcasting Corp., a retail digital shopping entertainment company, and as president of Liquid Light Television, a TV pro- duction studio, and KCAT-TV, a Hearst broadcasting station based in Los Gatos.

MediaTile has only 10 employees, but has partnered with a field services company whose 800 technicians go any where in the United States at any time.

Right now it’s about building market share and building market share, Mr. Kelsen says. We’re the fastest, cheapest system that you can deploy right now, and that’s a huge advantage.

Click here for the original article, (in PDF), courtesy of the Silicon Valley San Jose Journal.