Last week, MediaPost hosted its annual DOOH Forum and Awards Dinner.  The full day of presentations at the forum was generously streamed live from New York, enabling many remote viewers, including me, to enjoy the program.  The program was a series of panels with facilitators from the industry engaging with panels of 3 to four experts.  Topics included content formats, measurement, privacy, and planning.  Sessions were lively and for the most part remained on topic, and was worth the time invested to get the viewpoint of so many media planners, agency wonks and subject matter experts.  As I listened and jotted down notes during the day, it became clear that the thread connecting most of the sessions was that of standards, challenges and the need for usable case studies.  As such, it struck me as odd that one of the more lively and heavily tweeted sessions was at the end of the day on the topic of "what's next?".  The whole crystal ball thing seems to engage people, as it always does.  But it made me wonder whether our industry is ready for that future, or if we are rushing to build castles in the air, so focused on what we can do or might do with technology that we ignore the important foundation that they must leverage.  Coincidentally, a study that was released last week made me wonder whether we are ignoring the existing processes and partnerships between manufacturers and retailers, and acting as if digital signage entities invented in-store marketing.

 In a comment on last week’s post, an anonymous reader named Chuck (Can you be anonymous and sign your name?) provided some interesting fodder for discussion. Chuck made two interesting points. The first was this:

“Instead of focusing on name changes DPAA nee OVAB should focus on credentialization. And not just a methodology, but a gold seal.”

This is a good point, although maybe not on DPAA’s radar. Last October, I took a shot at suggesting that such a trend was forthcoming in this post. So far, it hasn’t occurred, but Chuck’s comment would seem to indicate that others have thought about what is needed and what would be helpful to all entities in this business. It may make the most sense for an entity such as Nielsen or Arbitron to take on the task of certifying networks, report formats and software platforms, since the people most interested in such a certification will be the advertisers. They would almost certainly charge for the effort, and publish standards and a certification process to lend additional credibility to the program. For their part, DPAA is primarily concerned with driving advertising revenue to their members. Their establishment of standards is an effort to certify their members as worthy of advertiser trust and investment. Providing a certification service to non-members might be problematic for those who pay the very hefty dues levied by DPAA. So Chuck, it likely won’t be DPAA, but you are certainly on to something there.

The second comment was a bit more provocative. Chuck questions the status and future relevance of the digital signage industry itself in light of projected technology advances (emphasis added by me):

“I think we all know where it will go in the next 2-5 years with internet-ready flat screen TVs in American houses and geo-targetable smart phones in our hands. The question is whether OVAB (doh! DPAA) and this space we mistakenly call an industry want a more integrated role or to be jumped as an afterthought.”

I am ambivalent on this one. It is hard to argue that the natural progression of consumer televisions will not include integration of internet capabilities. This, combined with advances made by the cable industry will make many televisions addressable and potentially interactive. I read that smartphone penetration in the U.S. is going to take a giant leap forward in the next 15 months. It is also hard to argue against the thought that people are going to be targetable at home and on the go. I think the nuance here is that targetability in and of itself is terrific, but it is not the end game. Closing the deal is the end game.

One way to look at the different channels of traditional and digital media is through a lens that filters them on two axes: contextual relevance and ability to finish. Contextual relevance would be a measure of the relevance of any message received via that channel, given the context in which it is received. Ability to finish would be a measure of how easy or possible it is to act upon the message immediately. A take on how print, broadcast, online, DOOH and mobile media might map out on these axes is shown here (click to enlarge):

 

 

Messages delivered via print media generally have low contextual relevance. While the reader has opted-in and decided to receive the message, the context of the impression will only be relevant either randomly (Advil ad read while riding the subway) or in very specific circumstances (beer ad in the program at a ball game). In most cases, the message and the context will be disconnected. The ability to act on a printed ad generally requires specific actions: a phone call, a trip to a mall, a walk to a beer stand.

At the other end of the spectrum, online messaging is often optimized to to be contextually relevant. Enough is known about the nature of the site or page in question for advertisers to be reasonably smart about placement. And in an online scenario, the ability to finish is very high, even if the gratification is often delayed.

Digital signage by its nature has very high contextual relevance. Because messages are targeted to the environment they appear in, this is one of the real advantages of narrowcasting. Think about the laundry detergent ad in the grocery store, the beer ad in the convenience store, or the pharmaceutical ad in the medical office. Each is relevant in the context of the location of the display itself. The ability to finish for digital signage will vary, however. In retail environments, it is fairly high. In public areas, it is somewhat less. Chuck’s assertion regarding the need to integrate may not be far off base, at least as it relates to smartphones. It does seem clear that integration of mobile handsets and apps will be important to increase digital signage’s relevance and ability to finish. It will also extend the experience beyond the point of impression. His point that broadcast television will slide to the right in the chart above as TVs become internet-enabled is well taken. It is important to remember the mantra that digital signage exists along a continuum of media channels, and is not an end unto itself. I’ll disagree with Chuck and say that we are correct to call ourselves an industry, even as we struggle to find identity and leadership. But we’d be foolish to think of ourselves as an island. Thanks for the input, Chuck. Keep it coming.

Sometimes, we all get lost in the weeds, so engrossed with what we are doing, hearing and reading that we lose our sense of the big picture.  This is especially true during the trade show season that we are in the midst of right now, with the tweets, blogs, press releases and contrived buzz reaching new levels of oppressiveness.  Taking a step back from all the tumult, the digital signage landscape is filled with contradictions.    To a certain extent, that seems to be a symptom of a fragmented industry struggling to find its own identity, even as it grows at a high rate.  At the same time, it is also the result of  a great number of dissonant messages from all over the landscape, attempting to define what is important.  As an industry insider, I sometimes get distracted and confused.  I can only imagine what newcomers have to deal with.  Here are two examples of conflicting messages, and an atteempt to reconcile them.

Consider the simple concept of capital.  Few will argue the fact that deploying a digital signage network is a capital-intensive proposition.  Capital, whether it be from angels, venture firms or private equity shops, has been very difficult for network owners to access for nearly 18 months now.  I can think of several high quality projects that are “stuck” in the capital formation process.  I am sure there are many more that I am unaware of.  The trickle down effect of slow capital formation impacts all of the companies that would provide products and services to those networks, throttling their growth in the process.  Conversely, we have witnessed increased investments made by several very large technology companies in the space during the past year.  The exploits of Intel and Microsoft have been well-chronicled.  NCR bought into the space.  Oracle appears to be dabbling.  NEC fancies themselves as software developers now (or should I say “for now”?) Cisco has been in the space for years, and is redoubling efforts to be noticed.  What do the technology bigs see that investors do not see?  Interestingly, I think they see the same thing, but from different perspectives: high growth, huge upside and a fragmented marketplace.  The tech companies have the luxury of placing bets on themselves.  But the angels and venture capitalists have to place their bets on others, and they are apparently finding it easier to fill out their NCAA brackets than to project the winners in each sector.  I am told that there is quite a bit of capital on the sidelines, but all we have seen lately is some bottom feeding.  Perhaps the actions of the big technology companies are a leading indicator of bigger bets being placed by traditional funding sources.

Then there is the area of content, coronated long ago and probably too many times as king.  The basic tenets of digital signage content - to inform, to engage and to be relevant - are reasonably well understood and accepted.  The level of execution of those concepts varies widely from network to network, and it seems pretty clear that even after years of evolution, few have mastered the one-to-many art form of a digital signage content strategy.  Yet just as conference agendas and consultants finally begin to focus on digital signage content, we are witnessing a rush into mobile interactivity as a linchpin of content strategy.  This constitutes a leap of the content chasm directly to one-to-one messaging.  No one should doubt the power of the smartphones sitting in so many palms, pockets and purses.  It is obvious that in most environments, extending the customer/viewer interaction to a mobile device and perhaps even to a home computer is sound thinking.  Still, the rush to mobile in many cases comes off as a “me too” strategy, taken on by many networks who have yet to formulate a basic content strategy.  Questions abound.  Is content still king?  If so, what is on the digital signage screen when your viewers have their heads down, waiting for a web page to load or an SMS message to appear?  Are you ceding the task of engagement to a 3-inch screen?  Is user-generated content relevant outside of bars and concerts? How do we compete for mindshare?

Traditional funding sources have become a bit gun-shy on digital signage, while established technology leaders are making big investments in the space.  Network operators and industry wonks are finally paying more attention to developing a thoughtful content strategy, while those same people are chasing mobile strategies with a shotgun approach.  How do we reconcile these conflicting indicators from the two cornerstones of a healthy digital out-of-home media industry, capital and content? Here’s my take:  First, money talks and money attracts more money.  The dam is going to break soon, else the money on the sidelines may miss a big opportunity.  Second, content is still king, and digital content exists on a continuum.   Digital signage will embrace the mobile channel, not become consumed by it.  It will just take time for this to look seamless. 

As I waited for the ice to melt off the windshield of the car in my Southwest Florida driveway, I pondered three important questions. When did the Bostonian in me come to think that 32 degrees is cold? How much extra roll will a golf ball get on frozen bermuda grass? Do I regret missing the NRF (National Retail Federation) Big Show for the first time since 1988? The answers came to me slowly as the defroster warmed up and the washer fluid ran out. My perception of relative coldness probably went off kilter when I parted with most of my skiwear in the mid-90's. The extra roll on a frozen fairway is only an operative concept if the ball is in the fairway. And while I am uneasy not being at the Javits Center this week, I feel comfortable with the idea of staying in the (relatively) warmer climes of Florida to tend to important tasks. Last year's lackluster attendance and generally scattered understanding of digital signage on the show floor made the decision easier. But it may not be so easy next year.

 

If one were to gauge the value of the conference by monitoring Twitter or industry blogs and news feeds, then it would appear that monumental things are going on over on 11th Avenue this week. Several big technology companies have moved their roadshow from last week's CES show in Vegas to New York this week. While the sales and marketing teams have probably switched out as the focus came east, the PR machines have remained in high gear, putting a retail spin on things. The clear goal is to get reviewed, You Tubed, blogged, tweeted or otherwise noticed. To be singled out for notoriety at the monstrous CES is often a gateway to capital, orders and general buzz. NRF, on the other hand, is much more of a community gathering, with a defined application and services space. Job mobility is very high between and among retail-focused service providers, technology vendors and retailers themselves. As a result, it seems as though everyone at the Big Show can connect through less than the seven degrees it takes to get to Kevin Bacon. So effectively creating buzz in this large but tight community is a very powerful strategy.

 

What we are seeing this week is a wave of digital signage announcements, driven predominately by the largest vendors in the retail technology space. Several digital signage companies have made announcements at NRF, but they just don't have the juice to create real buzz. While the exhibit hall presence of pure digital signage vendors appears to be relatively flat from last year, it looks like the big technology providers have recognized that digital signage is going to be a part of the retail application portfolio going forward. This alone is good, because as we are witnessing, the marketing machines of the huge IT vendors can not be matched by those of the nascent digital signage industry. The overriding effort of the bigs appears to be the establishment of retail digital signage credentials, building talking points that will sell more product, and positioning to become the go-to visionary advisors in the space.

 

Without doubt the most attention in the news and the Twittersphere has been Intel's digital signage concept, unveiled at CES last week, and recycled at NRF with retail spin. Ably covered by Dave Haynes on Sixteen-Nine, complete with pictures and video, the concept combines gigantic side-by side floor-standing displays. One is more or less traditional digital signage, albeit with the ability to select which ad you want to see (someone needs to think that feature through!). The other is a holographic display that combines every hot techno-buzz feature possible to support wayfinding and suggestive selling: augmented reality, interactivity, mobile integration, camera-enabled video analytics, and more. All, of course, made possible by the Intel Core i7 processor. Intel makes it clear that the exhibit is a concept, a vision of what can be. They want to take both a thought leadership and a technology leadership position as retailers prepare to place their bets. It is the right path to take for Intel, given the nature of their product: unseen but critical. They know very well, as most readers of this blog do, that the reality of today's mainstream marketplace does not include 7-foot holographic displays or even Core i7 chipsets. Cost factors drive the vast majority of the market toward lower cost processors such as Intel's Atom and Core 2 Duo (full disclosure: our media players are based on those chipsets today) and smaller, more manageable and affordable displays. But making a clear statement as to where this could lead is an important step in making retailers understand what can be. The retailers will be pragmatic as always, and walk before they run, but Intel has done a nice job of making the possibilities known. That elevates the conversation. So, thank you, Intel.

 

In a related move, Intel and Microsoft jointly announced "optimized digital signage solutions based on the Intel Core i7 processor and Windows 7-based Microsoft Windows Embedded Standard 2011" in an effort to "better standardize a fragmented market". The idea of standards is laudable, and the Wintel combine (more disclosure: we use MS Windows Embedded Standard, a/k/a XP Embedded, on the vast majority of our media players) is no stranger to establishing and marketing them. No doubt, this announcement will be followed by a series of software vendors rushing to become certified on the new "standard" platform in order to become beneficiaries of both the power of the Wintel technology capabilities and their marketing muscle. Again, proven tactics and good strategy. However, the new Wintel "standard" will be established at the high end of the marketplace until the cost curve on the Core i7 makes its way south. Currently, Intel's web site shows a reference price for the Core i7-720QM processor 74% higher than the Core 2 Duo P8700. The prices will come down, as they always do. Until then, buyer requirements in the mass market are going to focus the big volume on lower cost processors. Intel still wins by providing cost effective technology today while also making the capabilities of the next generation abundantly clear. Microsoft wins by positioning the next generation of embedded OS even while it is quite happy to be selling thousands of the current generation. Perhaps equally important, their agenda is to provide a clear value proposition versus Linux, which is unburdened by MS license fees. The concept displays may have helped them in that regard.

 

The NRF Big Show is an important venue for retail technology. With the time, money and effort being spent by the biggest technology players to promote and support the notion of digital signage, it will likely (finally) become an important venue for digital signage going forward. Looks like I'll have to do the golf ball research on the frozen fairways of 11th Avenue next year.

 In what has become a very busy end-of-year rush, a lot of passing thoughts have bubbled up and are taking up too much RAM in the underpowered device beneath my skull. So it is time to unload a few of them in order to free up processing power.

 

Foxes in the hen house, or fish out of water?

 

It does not take an advanced degree to figure out that when all is said and done, the money that will drive hyper-growth in DOOH will flow from advertisers. As such, I suppose we should not be surprised to see non-traditional, non-media companies enter the fray to chase the big bucks. First came NEC with their VUKUNET offering, announcing their intent to bring order and lots of money to anyone who trusts a terrific hardware manufacturer to write software and sell ads. Now, rumors surface via DailyDOOH that Cisco is about to launch an OOH ad exchange. Despite the fact that there are several established, specialized and entrenched entities booking ads and aggregating DOOH screens, as well as several new and focused entrants, these two industry giants seem to think they can move markets outside their normal scope of operations. Maybe they will, but I wouldn’t make book on it. However, if a company like Google or Microsoft decides that they are coming into the space, they would be doing so from a position of experience and power. If that happens, the hardware guys will get schooled by people who understand both software and ad sales. The best of the established aggregators and agencies will continue to prosper based upon relationships with brands and networks and their specialized knowledge. Hardware people will return to hardware sales.

 

Can we agree on how to measure success?

 

There has been a lot of discourse on the topic of press releases, their content, claims and general usefulness. Most players in the industry are eager to get their names into the public consciousness in any way possible. Apparently, using key buzz words, fantastic claims and large numbers has become the accepted method to get attention.

 

So when vendors talk about how many screens they control, or how many connected network devices they serve, they are trying to publish the largest and least meaningful number possible. If you sell software, the yardstick is licenses, end points (media players, not screens) or locations. Each of those can somehow be related to actual scale, revenue and success. When we start counting screens and unidentified connected devices, it only serves to cast doubt on the claim itself. I doubt that anyone is trying to be dishonest, but using sleight-of-hand to make something look much larger than it is (even if it is actually large in the first place) doesn’t fool too many people.

 

2010: The year when digital signage and mobile get serious

 

I am not sure any topic is more buzz-worthy than how mobile technologies finally get married with digital signage technology. There are so many flavors of mobile applications, so many potential use cases, and so many providers on both sides of the equation, that it can make your brain freeze. I don’t think the answers are obvious, but it seems clear that the network owners, the brands and the consumers are all eager to make use of those smart devices in every pocket and purse. As a result, 2010 will see many cases of proof-of-concept testing of mobile-digital signage application integration. I am not a supporter of the idea that mobile screens will displace large format DOOH screens. But networks and solution providers are going to have to figure out how to embrace mobile devices and applications in order to raise the bar and their appeal to their many constituencies.

 

Naughty and Nice

 

I had planned to do a humorous post in the theme of Santa’s annual list, offering appropriate toys to the nice people in our industry, and lumps of coal to the naughty. I even solicited (and received) input from others via Twitter. I got a whole lot more input on the naughty side, some quite humorous. My experience is that the nice folks are in the vast majority and make this a fun industry to work in. You nice people out there… you know who you are and don’t need to be reminded. On balance, it feels more appropriate to just wish everyone the happiest, safest and warmest holiday season possible.

 

A special thank you to the RDM team, our partners, friends and of course our exceptionally brilliant customers for an exceptional year. I can’t wait for tomorrow.

 

Peace.

In this space and in other articles and blog posts, the increasing signs of industry acceptance and maturity have recently been trumpeted and applauded. Most of the discussions have centered on flow of capital, corporate interest, technology advances, and consolidation of network and technology players. For an industry whose future is so highly dependent upon its acceptance as a legitimate competitor for advertising dollars, relatively little time has been spent looking at the mechanics of that side of the business. The same level of noise that exists on the network and technology sides exists in the advertising side of DOOH. Changes are inevitable if we are hope to win the hearts, minds and wallets of agencies and brands.

On a trip to New York City last week, I had the opportunity to meet with two people who work for digital agencies, both of whom have had significant exposure to the digital out-of-home space. A good conversation starter was Lyle Bunn’s timely piece, which conservatively estimated the number of unique ads playing on DOOH displays at 1,080,000. My opening position was that a million unique ads would seem to indicate that we have some serious traction and mind share. Both agency types responded the same way: the number may in fact be conservative, but it is hardly reason to pop champagne corks just yet. The issue, they said, is that from their perspective, the vast majority of the unique ads playing on DOOH displays today are actually local ads rather than national ads. The big national dollars that can flow to an entire network with the stroke of one pen are just beginning to look at DOOH in a serious way. We are talking about the brands that we all see on TV, on the web and in print, and these are the brands represented by the agencies, and they are still treading carefully. Media buyers are not risk takers by nature.

When pressed as to why the big brand dollars are flowing slower than anyone hoped, three themes became apparent: network profiles, channel conflict and execution. The addressability and targeting capabilities of digital signage networks is a two-edged sword. The fact that advertisers can buy, as Mr. Bunn puts it, “based on demographic profile, Designated Market Area (DMA), geography and even the activity in which they are involved (shopping, transit, café, workout, attending a game, etc.),” means that savvy media buyers are able to cherry pick venues even down to the zip code levels… and they do. Networks with locations of varying quality and value are finding that they can’t sell the whole network. In fact, they are finding that the incremental locations they deployed just because they could are actually becoming overhead rather than revenue generators. Networks need to consider what they are selling when planning their deployments. More is not always easier to sell. Quality DMA coverage, identifiable (and desireable) demographics and sustainable traffic need to be part of any decision to deploy to a specific location. Operators need to have a strategy as it relates to location selection, and some may have to rationalize what they already have to get maximum ROI. It is better to “own” a region, DMA, neighborhood or demographic than it is to shotgun several. Without doubt, the network aggregators have served a great purpose here. They are able to present multiple networks (or segments of multiple networks) efficiently to the buyers, which reduces the potential pain of making dozens of individual buys. But they have their own pain, as we will see.

The second theme is that of channel conflict. In their urgency to generate ad revenue, many networks have enlisted both direct sales teams and multiple aggregators and rep agencies. The major aggregators, Adcentricity, SeeSaw Networks and rVue, are joined now by PRN, which is clearly repositioning as an agency of record (AOR) for DOOH, leveraging what is left of their now-ravaged model. Other rep agencies, such as Immersion OOH are making progress, and we are seeing some attempts at venue-specific alliances, some with value and others that are actually loose affiliations of the damaged, dying and desperate. The result of all this is that some networks have four or more people representing them, often to the same prospects. The value proposition, sales approach and often the prices are different. Buyers become confused, and confusion drives them back to the comfort of existing traditional channels. Somehow, this channel conflict needs to be resolved. All of the reputable aggregators will be very quick to tell network owners that they are not designed to be the “go to” sellers of ad inventory. In fact, their job becomes easier if the networks create some scarcity (and price firmness) by selling a good percentage of their inventory directly. Networks who try to go direct after an account is opened by an aggregator ignore the fact that the original sale was in the context of a multi-network buy. But there are cases when a buy is network specific, and the appropriate action is to go direct. So the answer is not to dump the direct sales force or the aggregators, but to communicate, work together and even team sell when appropriate. It will make everyone look better to the buyers.

Even with better communication, the time is drawing near when networks will have to choose one aggregator or rep agency and grant them exclusivity in order to reduce the potential for channel conflict and media buyer confusion. Very much like the networks and the solution providers, this would be a driver for the consolidation in the aggregation business, or at least the clear definition of winners and losers. The ad buyers want this. Ignore them at your own peril.

The third theme is execution, which falls back upon the networks themselves. Graeme Spicer recently posted a series of observations on the Adcentricity blog, and echoed the sentiments I heard in New York. He noted that “(Agencies) have high expectations of the DOOH industry to deliver campaigns as contracted, and they are becoming increasingly vigilant in ensuring that they are getting value. This means physical venue audits by the agencies are now becoming commonplace, and the results aren't always casting DOOH in a favorable light." What this means is that agencies are unlikely to simply accept location counts and playout affidavits at face value. They want some assurance that the displays are properly placed, functional and turned on. We will see agencies auditing network locations before and after campaigns in order to create assurance of value beyond affidavit numbers. Media buyers see this as a requirement for their own credibility and job security, and you can't blame them. Networks will need to be able to demonstrate high levels of compliance, not just playout records. Compliance means that displays are on when they are supposed to be on, content plays when it is supposed to play, sound is on and audible where appropriate, and errors are corrected before they have material impact on a campaign. This goes well beyond reporting playout data in a vacuum.

One of the challenges the agencies see, and clearly a pain point for the aggregators as well, is the huge disparity in the technical and operational capabilities of the various networks. Large numbers of networks run on home-grown applications of varying sophistication. Others run on any number of commercial applications, again with varying ability to support ad-driven networks, especially to the satisfaction of ad buyers. At the same time, the ability of network organizations to execute campaigns and manage their assets varies widely. Just as agencies are auditing venues to see what they are actually getting for their ad dollars, so too will they (and the aggregators) go through a process of vetting networks and software providers for accuracy, completeness and compliance. Dollars will flow to where there is confidence.

When the industry deals with rationalizing networks, channel conflict in ad sales and technical execution of ad campaigns, we will be a lot closer to the comfort zones of ad buyers. That evolution of this critical facet of our industry has to take place. We already know DOOH works. Now we have to make it easy for ad buyers and brands to invest with confidence. All three legs of the DOOH stool: networks, solution providers and ad sellers will need to work together. Those who remove the pain points for ad buyers will see more ad revenue sooner.