Budget planning may still be a few months away; however, hardware, software and service providers are scrambling to identify opportunities to align with businesses considering implementation of a digital communication networks in 2011. Historically, the digital signage industry as a whole has underperformed, missing adoption rate predictions by millions if not billions of dollars, leaving developers, manufacturers, integrators, investors and analysts baffled and frustrated.
Having personally worked with dozens of industry experts and customers alike, the following are the most common excuses I’ve heard for the industry’s disappointing results to-date. The feedback consistently circles around the fact that the industry is immature with limited historical modeling data available, proof of performance benchmarks, published results for reference, and operated in a mode that I like to call having your sights locked on the horizon, or the “what’s next” paranoia. Combinations of these conditions manifest themselves in the following 7 excuses:
1. Expense
Hardware costs have been dropping for years, and cloud computing, SaaS, and automated services (technical, training, and others) are driving down network startup costs, while driving up monthly recurring revenue opportunities for service providers, which most providers like. Being an immature media rooted in technology which is ever changing has consumers fearful of buying in too soon, and has everyone watching everyone else to make the first move. Legislation and new laws like we’re seeing in health care reform surrounding nutritional labeling may be what it takes to jump start the adoption of digital screenmedia in the food service industry, at least in select restaurant demographics.
2. The Economic Recession
Any costs associated with continuous improvement of a business process were pretty much halted in the past two years unless a powerful ROI model or payback could be proven. Regardless of its perceived value in enhancing the experience or brand, if the solution was unable to provide the required proof of performance (i.e. you pay a dollar to receive $1.50 or $2.00 in return), the initiative was halted in its tracks. Even if all key performance indicators and modeling suggested that the introduction of dynamic media and centralized control would create opportunity, flexibility and positive returns, ROI modeling results were not accepted unless significant, trustworthy historical data was employed, and the project would invariably be passed over to be reviewed again at a later date.
3. Fear of the Unknown
Digital signage solution analyses get hung up when team strategists, marketing and IT professionals realize “You don’t know what you don’t know.” Executives flag digital technology, integration, and dynamic business control as the way of the future and are ready to act. Professionals assigned to design, recommend and implement find themselves in foreign territory with limited access to real time data, historical results, and even industry guidelines. Research is conducted in which they identify dozens of providers whose websites and literature appear to all say the same thing. Team leads read blogs about good and bad decision making, rollouts, and business management, and of potential partners within the industry.
RFIs and RFPs are created and routed, but even then, being new to the industry the right questions are frequently not being asked, and in some instances select providers may even be assisting in drafting the final solution’s performance criteria. Simple modifications to plans suggested over coffee at a tradeshow or conference have brought screeching halts to the awarding of major rollouts because hundreds of thousands of dollars can be saved with corrections viewed by some as basic modeling, that may not have originally been considered by the marketing, IT or procurement team managing the initiative. Companies need counsel in making investments of this magnitude; however it is a conflict of interest for an RFP recipient to act as the RFP consultant, even when the RFP recipient is possesses the most knowledge and experience regarding deployment analysis fundamentals. The lack of unbiased industry experts assisting network partner selection has slowed digital signage movement and growth.
4. Lack of a Holistic Solution
If you are active in the industry you may think you know what individual hardware, software and service organizations bring to the table, but in fact, it is likely you don’t have an accurate big picture view. Alliances, partnerships, business relationships, etc. have been privately developed and cultivated for years over drinks and dinner at tradeshows, conferences, and business meetings. Visit any booth at an industry event and a majority of them will say that they can provide an ala carte’ or turn-key solution based on your specific needs. At the same time everyone is out promoting their goods as independent do-all vendors, while in reality they are not experts in all areas of digital signage solution creation, but are experts in their individual solution niches. Necessary vertical solutions and partner alignments have many companies not knowing exactly who to turn to without unintentionally or undesirably becoming an industry expert themselves. The availability of long term strategic partners willing to get in the weeds with customers and effectively, in an un-biased manner, address the ever-present knowing-doing-gap appear to be the weakest link in the equation.
5. Industry Evolution
The comment I hear most often that scares the #@!* out of many is what will happen to the industry once Google, Apple or even Microsoft decides to “play in the clouds”, delivering system management, data analytics, searching capabilities, advertising and so on. Hardware, consulting, content, project management, rollout services and integration will live on, but what will happen to software, automated services, technical and training and the omnipresent advertising model? This goes back to those same organizations with their sights solely fixed on the horizon. How long will consumers wait for the right moment to buy? How long will any of the major players wait for the industry to be mature enough to play in the game? Seize the moment!
6. Content
If you look, there are numerous resources available for screen feeds of dynamic content. Content creation, on the other hand, has taken a hit from the agency side as most agencies haven’t discovered or built a business model that will support the development, frequency, and needs of the in-store communication provided by digital signage. In the past year we’ve seen significant growth in Interest from mid-size and boutique agencies specializing in animation and out-of-home media. Again, whether it is a maturity thing or not, don’t you think it’s interesting that there is software designed for print (high resolution), software designed for web (low resolution), and software designed for broadcast (high resolution), yet where is the software designed for digital signage?
Software for web works in designing dynamic digital content, but in some cases pushes the limits of its functionality, and you can’t obtain technical support from the software developer because you are using the software to design for a platform on which it wasn’t intended to be used. Broadcast software works for digital signage, but the software is cost-prohibitive for most. So my question is this: Will design software for web continue to evolve to meet the needs of digital signage? Or, will it continue to languish with sub-optimal tools until the industry matures or reaches an as-yet undefined critical mass and the creative tools/software developers release software specifically designed for digital signage?
7. Integration Concerns
Do all the pieces have to fit prior to businesses buying into a digital signage solution? Integration has been a hot topic for some time. Retailers and select public spaces, among others, appear to be biding their time, waiting for advertising integration. The lack of an ad-model network with a sound advertising distribution system, media planning and agency support has generated concerns surrounding the viability of the advertising model. POS linking to digital signage, mobile linking to POS, the “new” back office software linking to POS, RFID linking to digital signage, the list goes on and on. If you don’t have a clear line of sight to a software developer’s technology roadmap, the fear or partnering with the wrong solution provider, and of not being able to deliver on the growing need of your organization, causes an unending delay in decision making for potential buyers.
In the old days we used to say “no one ever got fired for hiring IBM”: hence an industry dilemma. The market is immature, there are no major IP Companies, Creative Package Software Development Companies that I am aware of that are alleviating the stress of a bad buying decision i.e.) “No one ever got fired for hiring Microsoft, Google, Apple.” So what’s it going to take to jump-start this new media? I believe the quickest way to get from point A to point B is to tackle the excuses. One way to do that is by providing unbiased educational services, research, best practices, and results.
