TOKYO: A range of innovative in-store and outdoor digital formats are gaining ground in Japan, providing opportunities for precise targeting by age and gender.

NEC has built display screens that employ face-recognition technology to determine the sex, age and overall engagement of consumers.

According to the company, its software correctly identifies males and females on 90% of occasions and falls within a ten-year window regarding their age 70% of the time.

"From a sponsor's perspective, you don't want to pay for something without knowing that people are going to see it," Tomoyuki Osaka, group manager of NEC's digital signage arm, told the Wall Street Journal.

V-Sync, a start-up in Tokyo, has developed a similar platform, delivering 90% ratings for classifying men and women, and 60% scores when placing passersby into one of five age-groups.

"We are able to provide detailed information on the numbers and characteristics of people who stopped to look at the digital signs," Takaya Ibe, president of V-Sync, said.

"Advertisers have recognised this new media as being highly cost-effective."

Having shipped 100 units to retailers and other firms in August, V-Sync expects demand to grow rapidly in the rest of 2010.

The East Japan Railway Company has erected digital ad screens at 12 stations, such as Shinagawa in Tokyo, and reported strong results so far.

"Even in a slumping advertising market, sales have been good," Takashi Yamamoto, a manager at East Japan Railway's marketing and communications wing, said.

Its further innovations have included adding a vending machine based on an equivalent programme, that recommends drinks to customers depending on their profile.

"With this machine, we can actually see who is buying what, instead of relying on educated guesses," said Toshinari Sasagawa, general manager of sales at JR East Water Business, another unit of Japan Railways.

Meanwhile, Lawson, the retail chain, has also formed a partnership with Asatsu-DK, the advertising group, and telecoms firm NTT Docomo to develop its devices in this area.

In the first year of this tie-up, Lawson will install these signs in 300 stores in the Tokyo region, and aims to reach 2,640 outlets nationwide in four years.

The advantages of this system are said to include opportunities for serving relevant ads at the point of purchase.

Moreover, the fact it uses interactive tools, such as sending coupons to mobile phones when customers select this option, offers considerable potential.

DisplaySearch, the research firm, believes Japan was responsible for 8% of global public display shipments in 2009, but predicts the domestic market will double in 2010.

"The idea of using digital signage for marketing research is something quite unique to Japan," said Hidetoshi Himuro, an analyst at DisplaySearch.

The Yano Research Institute forecast that the digital sign market will be worth 128bn yen in Japan in 2015, compared with 55.7bn yen in 2009.

Data sourced from Wall Street Journal/Asahi; additional content by Warc staff