Billboards Identify Shoppers by Past Purchases… and by Sight

In the film Minority Report, a wanted criminal undergoes black market surgery to have his eyes changed, worried that the bots — and ads — in his society will be able to visually identify him.

The convict then walks into a shopping mall, where his new eyes are scanned with a telltale spark. Mistaking him for the eyeballs’ former owner, a nearby Gap billboard exclaims, “Hello, Mr. Yakamoto! Welcome back to the Gap! How’d those assorted tanktops work out for you?”

Such scenarios aren’t so farfetched. With help from marketing technologies like radio frequency identification (RFID), in-store ads can be served to customers based on items they’ve recently purchased. Physical appearance will increasingly also determine what ads they see, the Wall Street Journal reports (via MarketingVOX).

RFID tags are already included in many retail purchases to help retailers keep track of inventory. As of January 2006, Wal-Mart’s top 200 suppliers were required to add RFID tags to packing crates and pallets.

Dunkin’ Donuts began testing dynamic ad-serving technology in two Buffalo, NY stores. Ads at the cash register promote breakfast items to people ordering coffee in the morning. When they pick up their food, different ads prompt them to return for an afternoon coffee break or try an oven-toasted pizza.

In Germany, Procter & Gamble uses RFID tags to track products removed from shelves, changing nearby digital ads accordingly. A customer selecting a shampoo, for example, will see recommendations for the matching conditioner or other hair products.

But this is all old hat. The most exciting new technology for vigilant early-adopting marketers is that of facial recognition: Cameras embedded in digital screens that can record and identify customers as they roam stores or make purchases.

Facial-recognition technology, like that of TruMedia Technologies, captures a person’s image and analyzes features (size and shape of nose, eyes, cheekbones and jawline) against their databases.

The result is a near-instant classification of a customer into a particular demographic (age, sex, even ethnicity), creating the possibility of serving highly-targeted advertisements to individual shoppers, not groups.

Tech firms and marketers hope to avoid privacy issues by taking care not to capture or store personally identifiable information about consumers. In June, for example, TruMedia committed never to record or store video from the tracking systems in its billboards.

While the technology opens new doors for tomorrow, today it is by no means perfect. A lengthy time delay between when an ad is reading data, and when it serves the appropriate message, can neutralize the advantage of serving narrowly-targeted messages to shoppers. Sometimes a product promotion will appear on digital screens, even after all the featured merchandise has been sold.

Marketers also fear too many screens in stores will result in customers ignoring them. But a 2007 study indicated most adults think digital signage is unique, interesting, and/or entertaining. 26 percent found it “less annoying” than other media.

Provided privacy advocates don’t drag technology providers to court — which they’ve done in the past for arguably less controversial technology — analysts predict significant growth for the digital signage industry, currently worth $1.1 billion dollars. InfoTrends forecasts a compound annual growth rate of 18.5 percent for revenues, 8.9 percent for sites, and 11.9 percent for screens between 2006 and 2011.

By 2011, revenues are expected to hit $2.59 billion.