The following is the full version of what was published in edited form in the Jan. 29, 2010, edition of the MediaPlanet Digital Signage Supplement included as a special supplement in USA Today (New York, Chicago, Los Angeles and Washington editions). Lyle Bunn served as principal writer and editor.

The economy has its shining lights and the brightest of these is North America’s Digital Signage and Digital Out-of-Home industry. These centrally-controlled digital media networks are improving the effectiveness of communications in out-of-home environments wherever people shop, buy, wait, work, travel and gather.

This provides significant improvement to the return on communications investment, helping brands, marketers, retailers, facility operators and other organizations such as consumer services, government, campuses and sport/arts/entertainment centers to effectively achieve their communications and business goals, at a time when communicating to shoppers, patrons, staff and students is increasingly complex.

Arbitron has reported research that Out-of-Home video as a medium reaches 67% of Americans 18 years and older each month, and delivers a fairly representative cross-section of consumers. 76% of those seeing digital signage noticed displays in multiple venues.

Advancements in digital signage technologies are improving network economies and message targeting to specific demographics and times of day and location.

Significant advances continue to be made to simplify advertising planning and placement.

David Drain, Executive Director of the 400 member Digital Signage Association says “Digital Signage is more like the internet than it is TV. When internet advertising came along a decade or so ago, advertisers weren’t sure how to create ads for it, because it was different than creating ads for TV, radio, newspapers and magazines. Then advertisers started to realize the beauty of it, with measurements like impressions and “click-throughs”. Digital signage is today second only to the internet in advertising revenue growth.”

At the 2009 Out-of-Home Video Advertising Bureau (OVAB) Digital Media Summit, Bob Liodice, CEO of the Advertising Association of America said “Marketers who aren’t taking advantage of this (medium) are going to be left in the dust.”

At the same summit, Bob Garfield, Editor-at-Large for Advertising Age noted that “unlike traditional media, out-of-home cannot be avoided.”

Digital out-of-home has matured and achieved critical mass in the perfect storm of a changing media landscape, the need for economic recovery and new, improved ways of doing things and shifts in how consumers, patrons, staff and students expected and need to be communicated with.

This article was published in the Digital Signage “Best Practices Guide (January 2010) under the title “Plan to fail – Plan to fail: Is customer confusion clouding content software selection”. It had previously appeared in abbreviated form in the summer 2009 edition of Digital Signage Magazine. An abstract of this article appears in the summer 2009 edition of Digital Signage Magazine. Published versions omitted some commentary in this paper and areas of software characteristic have been added to this article since publishing.

There is not a single deployment of Digital Signage or Digital Out-of-Home (DS/DOOH) that has not wrestled with software selection… and some projects, at times appropriately, change their media management platform (i.e. the software) several times during project deployment.

The complexities of the price /performance equation underlie the challenge of the selection process and the extent to which there is a problem becomes clear when evaluating software proposals.

A 90/10 proportion of DS Software applies (Fact)

DigitalSignageDirectory.com has 770 listings in 4 categories including “Content Management and Distribution Software,” “Network Management”, “Control Systems” and “Content Creation Software”. While an estimated 350 unique software systems for media management are available, most of these have limited installed base, are new to the market or tend to target particular applications, vertical markets or channels. About 2 dozen software systems drive 90% of the million displays deployed in North America DS/DOOH.

All software is created equal. (Myth)

Not all software is created equal, nor does it perform in the same way. Major plateaus of functionality exist, and the strength or weakness in software become clear as networks grow or changes are experienced in the number and type of displays, channels, playout groupings and dayparts, the amount and format of content, changes in display layout, input from various sources and the quality level of media playout expected.

Other primary factors in software selection include the operating system, formats of media that can be efficiently handled by the system, the cost of operations for display layout, playout group management and dayparting and ease of content (including ad) “campaign” placement. Harris Corp InfoCaster for example, offers ease of use and lowcost operations in large scale systems and uses media in a wide range of native formats from ingest to display to assure optimal presentation of live action and product imagery.

The stability of the software provider including the sourcing approach (i.e. direct vs. from a reseller) and the decision to use “software as a service” (SaaS) vs. acquisition/licensing should be made in the price/performance analysis as software has been assessed as best suited to the need.

A product comparison guide such as is available from the Digital Signage Association helps to illustrate the differences. This is especially useful as an input to the requirements definition, but it takes a sharp eye to discern the differences between software packages when they are compared on a spreadsheet of features, and an even sharper eye when the software appears in a proposal. Comparisons become meaningful when the requirement is well defined.

Different software is better suited to different situations (Truth)

Typically, software selection becomes more refined as the media objectives are defined and refined, and operating approaches related to the network are clarified. Deciding on a software without the full benefits of this planning in the process can result in unsatisfactory levels of flexibility, overall cost, usability and ultimately, to the success or failure of the system.

End users and system integrators need to first establish what is to be accomplished with a particular digital signage initiative. Digital signage is simple a communications device, and the communications objectives must first be defined so that other key aspects of the project can be addressed including the number, size, type and placement of displays, software selection, connectivity, content ingest and scheduling as well as impact measurement.

Functional needs change. (Mercilessly!)

“Scope creep” is the term used to describe the expanding, unplanned scope and changes in a project. The costs, disruptions, delays and frustration that it causes are best mitigated by in-depth early stage digital signage planning and by assuring enough technology capability to meet possible future requirements.

During a panel presentation hosted by Digital Signage Magazine during Digital Signage
Expo ’09, which was attended by several hundred end users and suppliers, the CEOs of several primary software vendors, unanimously cautioned against under-specifying software, collectively observing and advising that “greater software functionality offers greater system use-ability.” Major software providers, which having collectively seen virtually every deployment as noted in the 90/10 section above, agree that underspecification of the media management element (software) leads to the underperformance, operational over-expense or ultimately, failure of a network in virtually every case.

“Scrimping leads to scraping” could be the watch-phrase during software selection. Appropriate tools must be applied to efficiently achieve communications objectives. “Cant’t do’s,” “work-arounds,” stale content and operating inefficiencies are typical symptoms of under-specified software.

The 3-step plan for selecting software.

The clichés apply: “Fail to plan, plan to fail,” or “If you don’t know where you are going, any road will take you there, and you will never know when you have arrived” or “Any achievement from poorly defined goals is through luck alone,” or “a project without an intent or plan merits nothing – priorities, with plans, deserve resourcing.”

A structured approach to software selection can, and will reduce ambiguity, confusion, frustration, time and cost while assuring, most importantly, that the most appropriate software is selected for the requirement.

The high-level, 3-step approach, each defined in more detail as follows are:
a) Define the communication needs and intents.
b) Define the project path (size, scope, applications).
c) Select software based on the expected scenario.

a) Define the communication needs and intents (The Critical Success Factor)

Digital signage can be a revenue-generating “business” based on 3rd party advertising revenues, but is typically used to improve core business and communications goals such as sales lift in retail and consumer service environments, reduced perceived waiting time, improved awareness on the part of staff, students or patrons, or to improve the experience offered by a location. Tangible benefits might also include cost deferral/avoidance. Some examples of network objectives include:

Revenue growth:

 a) Ad Revenues: Payment from suppliers or third parties for ad display.
b) Sales Lift: Revenue from product or service sales including up-sell and cross-selling an objective, “technology-agnostic” digital signage services provider such as Digital Display & Communications - The Full Picture can provide independent counsel to best serve network needs.
c) Increased Margins: Sales of products prior to discounting or from sales early in the stock cycle.
d) Advance Orders: Achievement of sales prior to receiving a product shipment or in advance of service delivery needs. Advance orders improve cash flow and “scoop” sales that might go to competitors.
e) Staff Training: Better training on sales approaches, or product features and benefits can improve in-store staff productivity.
f) Loyalty member growth: Direct membership fees, increased sales and revenues derived from increased visit frequency, participation and list rental.
g) Website traffic: Improving web traffic can increase online and in-store sales, and generate increased banner ad revenues, as well as gift and loyalty card sales. Gift registry offers additional engagement.

Cost Deferral:

a) Reduced printing, distribution, installation, removal, damage and discarding of printed materials. (100% message posting can be provided by digital signage).
b) Reduce management travel costs to locations when the digital signage network is also used for staff communications for product knowledge, motivation, safety and compliance communications, merchandising plans, communicating corporate values and directions, etc. Improved employee communications can reduce costs related to staff replacement and result in improved customer service through a better-informed and skilled employee.

Engagement Objectives

Many positive impacts of dynamic signage are subjective and less easily quantified.
They do however lead to the tangible measures of improved revenue and brand impression through improved visit experience, product/service awareness and propensity to buy. Some examples of engagement objectives are as follows.

Improve the experience in the environment

• Improving the relevance of an offering to environmental conditions, trends and fads.
• Improving the in-store experience by adding audio, visual and information.
• Making the retail environment more unique and interesting.
• Making shopping more fun.
• Aligning with community and demographic interests with relevant information.
• Inexpensively refreshing the environment – in particular for frequent visitors.
• Entertaining the co-shopper or companion.
• Inform the shopper of new product and service offerings.
• Providing changing, interesting, target market visuals relative to other retailers in the product vertical or mall “district”.
Increase shopper attention

• Pulling traffic into retail-service space from public space, walkways, mall area.
• Increasing shopper dwell time.
• Deepening the “loop” of patrons to browse the store more fully.
• Increasing shopper visit frequency.
• Creating awareness of programs such as gift cards, loyalty, on-location events or offerings, sponsorship, community involvement, etc.

Align with and fuel consumer aspirations

• Solidify user loyalty.
• Present multiple scenarios/aspirations for the patron (i.e. the “glow” of joyfulness, a fun/healthy lifestyle, good times, relationships achieved, etc.).
• Align products or services with movie trailers, music videos, destination clips to provide customers with a cultural touch-point to associate with the message.
• Correlate products and services with emotional moments that shoppers can relate to.
• Reinforce messages delivered using other marketing collaterals.
• Put the product in a lifestyle context (i.e. a good book during holidays)

Clarify the offering

• Presenting visually how a product will work, look and move when in use.
• Profiling features and benefits.
• Visually demonstrating how a product “goes with” another (i.e. scarf with jacket)

Present a “call to action”

• Propose a purchase or enquiry.
• Display in-store promotions
• Issue electronic coupons
• Present limited time, in-store offers.
• Pre-sell incoming products

Offer ways for the customer to engage

• Promote loyalty programs, gift cards, gift registry and website
• Promote special events
• Provide the reason for a future visit.
• “Humanize” staff by profiling their attributes and capabilities.
• Motivate engagement through other approaches that improve discourse between the brand and the consumer (i.e. contests, text message voting, etc.)

Communicate “values”

• Present examples that illustrate the organization’s goals, attitudes and values
• Motivate, inform and train employees (directly or through ambient display)
• Improve the sales-focused partnership with suppliers.

b) Define the project path (size, scope, applications).

Media management software selection will also consider the overall life or planning horizon of the network including in particular the growth in the number, type and configuration of displays, playlists and content as well as interfaces with other systems.

Approaches to operations and sources of future funding will be considered since actualizing future opportunities may be impaired by the software under-specification.
Digital signage has the inherent capability to present images and messages that “speak to” and engage viewers to compel actions. The software selection decision should consider the required strengths in the following areas of capability include:

High quality presentation of the media in order to make the visual images as appealing and compelling as possible. This is in part achieved by using media in its richest possible, “native” form through the digital media supply chain. Reducing the need for media reformatting and transcoding reduces the degradation of the media.

“Local” input and control of a predefined area of the display or the playloop can enable individual locations to schedule and present information relevant to achieving their goals through local branding and promotions.

Ease of campaign placement. Defining parameters such as the date, time, location and other display criteria allows media to be presented to best achieve the intended results.

Content “layering” to “localize” content to improve revenue achievement. Compiling and rendering media spots in multiple content “layers” is a very efficient way of managing campaigns while having graphics, text, pricing and other elements reflect the local environment, demographic, weather, events, celebrities/personalities, inventory and other situations.

Ease of message targeting by display location, target demographics, time and specific circumstances.

Ease of use to allow for cost-effective operations and maximizing the benefits that digital signage.

Interface with data inputs and integration with other systems such as point-of-sale, inventory and traffic patterns so that media presentation and revenue achievement are maximized.

c) “Test-drive” the potential software on the expected scenario.

Using candidate software in an expected network scenario will very clearly identify strengths and limitations and is a suitable “test drive” of the software options.

Just as the test drive of a possible future vehicle would include its usual passengers and cargo on expected road conditions in a typical usage scenario, the same should apply to a software test drive.

The software test drive would include developing and ingesting content, performing screen layout, creating playloops and defining display groups. It would measure the steps, dependencies and time required to change these elements. If for example, a restaurant deployment is expected to include 5 different dayparts corresponding to upsell and motivating future visits, and displays are to be located at an order counter and pick-up area, then 10 playloops with suitable content would be used in the test drive. Content for multiple weather conditions or other content-change triggering factors would be simulated in the test drive. Updates with “local” content would be updated as would a typical refresh of the playlists within the network. Content would be created and campaigns scheduled as well, if this is expected to be part of the operational system.

In addition to enabling an analysis of strengths, weaknesses, opportunities and threats (SWOT) of the candidate software in its intended technical and operational configuration, the investment in applying a typical operating scenario offers strong indicators of ongoing operating costs associated with achieving the communications results and intended outcomes.

In conclusion, selecting the right media management tool for the requirement is of critical importance to a Digital Signage/Digital Out-of-home project, and can be achieved by applying objectivity and time-tested system development lifecycle approaches.

The “train” that is digital signage left the station in the post 9/11 economy when advertisers and marketers sought more productive ways of communicating. Since then it has been picking up speed at a double digit compound annual rate of growth and acceleration, and now has a full head of steam and is thundering down the tracks in just about every market and application area.

Digital signage continues to be installed at points of purchase, transit, waiting and gathering, at and near where people shop, work and study to inform, influence and increase safety.

Arbitron has reported that Out-of-Home video as a medium reaches 67 percent of Americans 18 years and older each month, and delivers a fairly representative cross-section of consumers. 76 percent of those seeing digital signage noticed displays in multiple venues.

A “critical mass” of displays has been deployed, which allows advertisers to reach targeted audiences 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.).
 
More than 180 ad-based networks exist with 47 of these (as Out-of-Home Video Advertising Bureau — OVAB — members) accounting for almost 400,000 displays. DisplaySearch reflects that almost one million displays have been deployed in North America for dynamic media presentation to shoppers, patrons, staff and students. A Compound Annual Growth Rate (CAGR) in display deployment of more than 23 percent is forecast. This growing critical mass substantiates the value for marketers and other communicators to consider, plan and use digital signage/DOOH.
 
Twenty percent of the 1,200 firms that responded to the fall 2009 industry survey conducted by the Digital Signage Association indicate they will spend between $200,000 and $1 million per year on digital signage/DOOH. This represents 240 firms of the survey respondents themselves expecting to spend a total of $48 to $240 million. Forecasts by industry analysts place industry projections in excess of $1.2 billion annually.
 
To be or not to be…

So the question is not whether or not an end-user or supplier organization will engage with digital signage during 2010, but “how.” End-users, suppliers and integrators all have the choice to be part of digital signage or not, with consequences to those that do not, and benefits for those organizations that do.

End-users, such as retailers, service providers and others, will lose revenue and patrons to competitors that use the medium, or will enjoy the benefits of more effective communications spending, meeting the information needs of target audiences. We are increasingly a “visual” society and the effectiveness of digital signage as a communications device is being proven across a wide spectrum of projects.

A/V and IT integrators are ideally suited to provide the technology integration needed. Some have lost market positioning by not offering digital signage earlier, while other have seized on new clients, revenues and margins, while other parts of their business have declined.

Some are generating new, ongoing revenues from services such as network planning and design, network operations and content production. End-users are going to buy from someone, and the ability to respond to needs is the basis of ongoing supply relationships.  

The field of the suppliers of technologies that comprise the technology “ecosystem” continues to grow. While some bring more cost-effective elements for media authoring, management, connectivity and presentation, many are enhancing their offering by bundling technology elements. 

Once the choice of whether to engage with or not is made, the important question of “how” needs to be addressed.

The following chart illustrates the framework for digital signage planning, supply and operations. It provides the context of the choices that end-users and suppliers must make as they decide how they will engage with digital signage.

No single organization can supply all elements of a digital signage network, and there are a wide range of more or less encompassing approaches used in both the sourcing and supply of the required elements. This presents opportunities while also making decisions about sourcing and supply both important and complex.

Digital signage projects start in the same way as the typical audio/visual project, however are typically much more complex in the definition of intended use, outcomes, Return on Investment (ROI) and Return on Objectives (ROO). A challenge of this phase is that the lack of understanding of what the digital signage technology can do often constrains the process.

A/V integrators, which typically focus on technology provisioning based on a defined specification, can often play a key role in defining the overall operational model and technology configuration which it might then supply.

Opportunities also exist for A/V integrators to provide services such as network operations, help desk, playlist administration and content development, as illustrated in the chart.
During this planning and assessment, the approach to technology sourcing/supply will be determined.

This feeds into the business model of “who supplies what” and “how.”

And in this process, some areas of ongoing operation emerge as key sourcing/supply issues. These include network operations, help desk, playlist administration, and content creation and sourcing in particular.

Some A/V providers are having success at providing these planning and operational services from within their organization, while others are sub-contracting or gaining a referral commission on these needed services, from which margins of 30-60 percent are typical. 
So consideration for the enabling technology in terms of functionality/benefits/costs relative to ROI and ROO is needed. The iteration and refinement of communications goals and the technology will result in a balance of outcome versus investment.

Throughout the process, end-users as well the integrator and suppliers must each decide on the nature and degree of their involvement in each phase of the system deployment life cycle and the sourcing of required technologies and services.

New digital signage projects will be advancing in 2010 across the economy. And, as the communications objectives become broader in scope and the technology infrastructure of existing networks is refreshed, new sourcing requirements and supply opportunities exist.

So, 2010 is a year of choices. Correct decisions by end-users will result in successful projects with ROI/ROO from the sourcing and use of digital signage. Correct decisions by integrators and suppliers will result in new revenues and profits, the retention of existing customers and expansion through new ones.