The Internet has transformed advertising from a one-way broadcast medium into a truly interactive, two-way experience. But one area that most people still associate with the advertising 1.0 era is the out-of-home industry. While digital signage has been around for decades, billboards, posters and in-aisle promotions have for the most part remained in the pre-Internet age.

But that’s starting to change. Smart brands and savvy advertisers are using screens to engage passersby in a creative, entertaining and memorable way. Technological advancements in touchscreens, gestural interface and facial recognition software are making rich, interactive out-of-home campaigns a reality.

Photo via USA Today

Change in store

The retail sector is one area experiencing a boom in digital signage. Companies like Best Buy and Walmart have networks of screens throughout their stores that help promote products, inform customers and allow advertisers to reach customers directly at the point of purchase. Content on the Best Buy On network includes everything from digital photography tutorials and interviews with movie directors to the ABCs of 3-D televisions.

At the recent National Retail Federation convention, Intel unveiled a seven-foot interactive holographic glass and LCD display that lets customers explore merchandise, find out about promotions, read customer reviews and share their discoveries via social media and mobile apps. Brands such as Adidas, Best Buy, Kraft Foods and Proctor & Gamble, in addition to researchers at the MIT Media Lab, worked with Intel to create these experiences.

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Customization: One size doesn’t fit all

Moving on to the streets, targeted digital billboards can help make out-of-home advertising feel less impersonal. In another first, Castrol, with execution by Ogilvy, Mindshare and ClearChannel, designed specially positioned cameras to recognize car models and registrations as they drove by. Further up the road, a digital billboard displayed a recommendation for which Castrol oil would best suit the car.

JCDecaux used weather gauges to create intelligent billboards that advertise thirst quenching beverages when the sun is shining and cold and flu medication on a wet day.

While it may seem like we’re getting into Minority Report territory here, the idea of transforming what many view as ad clutter into a one-to-one medium makes billboards both more relevant for consumers and more efficient for advertisers.

From advertainment to public service

InWindow’s urban tornado campaign is a great example of how digital signage can build buzz while entertaining people on their daily journey. To promote the Discovery Channel’s Storm Chasers program, they recreated the experience of a tornado in New York City, complete with fans to simulate wind. Pedestrians were able to have their photos taken and share them with their social networks.

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On a more serious note, this example of an ad for Amnesty International to raise awareness about domestic abuse, includes a camera sensor that can “see” when someone is looking at the ad. Face the ad and see a normal happy couple standing side by side. Turn away and the man attacks the woman. The tagline: “It happens when nobody is watching.”

3-D, anyone?

3-D is all the rage these days. 3-D advertising specialists 3D Exposure claim that 3-D public displays have “four times the stopping power of standard 2-D advertisements, up to 10 times the average dwell time [and an] increased brand recall rate.”

ClearChannel recently released what it claims to be the world’s first 3-D movie poster for Percy Jackson & The Lightning Thief. But so far technological limitations have prevented 3-D from making much headway in out-of-home advertising. Once glasses-free technology becomes more developed, expect 3-D ads to show up in a public space near you.

The shape of things to come

As younger consumers turn away from traditional media, innovative and interactive digital campaigns are becoming an invaluable way to reach the increasingly important millennial crowd.

With mobile adoption, post-recession marketing budgets and screen technology on the ascent, the out-of-home industry is poised to come out of its shell.

Sparksheet is the official media partner of Love Content, an international showcase of digital-out-of home storytelling. This is part of a series of original think pieces and in-depth Q&As built around the initiative.