Let's take a break from the drama surrounding the DSA and DSF, which received enough attention over the past week. I'll have some new thoughts on that later this week or next.

The real news is that the Digital Signage Expo (DSE) was held last week in Las Vegas and continued its own growth and maturation, matching that of the industry it serves. The exhibit hall was lively and featured many newcomers. The sessions received generally good reviews, to which I can add nothing since I never left the floor. Attendance seemed strong, despite the tough economic conditions.

Thankfully, most of us managed to escape Lost Wages before the NASCAR fans outnumbered us. Someone mentioned that the Motorcoach Conference, which shared the North Hall with DSE, will have their 2011 show in Tampa. Now that is an idea I could really get behind! In monitoring the Twittersphere during and after the show, I saw a few recurring themes. Each is worth looking at in a bit more detail, as they are indicators of where we are and where we are going as an industry.

The first theme was a general complaint that there was too much technology sameness out there, both on the hardware and software sides. The question of "how are you different?" is a legitimate icebreaker, and without doubt some people answer that better than others.

From a software perspective, let's back it up to the basics. At the highest level, what most of the software solution providers are trying to do is to enable centralized distribution of content over a network, with scheduled and managed playout of that content at the various end points of the network. Yes, there is a very significant amount of nuance in terms of how one can do that, and how elegantly one manages the the core functions of content management, network management and operations management. As a viewer at the end point, it should be very hard to discern how the pixie dust was sprinkled to make it happen.

What ends up separating one offering from the next is usually features, rather than functions, and solution providers have developed lots of features that add some sizzle to the steak. Features are ideally a reflection of customer demands, and as such, solution developers consciously or subconsciously steer their feature sets toward their core. This in turn results in more focused and specialized offerings, and a self-selection of "what makes you different".

In the end, what will differentiate technology providers will be their effectiveness in identifying and serving core markets. Solution providers that try to be all things to all people will not ultimately succeed. Focus is good, and focus will drive consolidation.

The second theme was a bit of a backlash against software as a service (SaaS). Interestingly, SaaS has driven the growth of networked digital signage, enabling network owners to focus their resources on site acquisition, content strategy and in some cases, ad sales. As networks grow, those SaaS fees become a bit more meaningful.

There is always a crossover point at which the investment in an enterprise licensing scheme, as well as the attendant internal IT resources, becomes financially feasible. Buyers seem singularly focused on SaaS fee schedules, perhaps to their own detriment. While average SaaS pricing has fallen in the past three years, that has clearly been more of a competitive response than one driven by scale.

The growth in deployed networks has been spread around to so many vendors that reduced pricing has only served to drive break-even deployment points higher. Fragmentation and competition, rather than economic reality, have driven pricing behavior that will act to thin the herd over time, as steadily lower SaaS prices will put pressure on providers in terms of their ability to serve their customers and to continuously enhance their products. That is not a good situation for buyers or sellers.

I believe that successful solution providers will do two things well. First, they will be able to justify and sell SaaS priced in a manner that allows them to operate profitably and effectively (see comments on focus above). Second, they will provide a path to an enterprise license for their customers who "outgrow" SaaS as well as an enterprise offering for those that require it from the start. SaaS has not lost its broad appeal, especially in a marketplace where so many potential buyers do not have IT resources. But look for licensing flexibility to become as important as cost moving forward.

Finally, I experienced, read and felt a theme of community that was unlike any previous industry conference. The Tuesday night Preset Mixer (thanks again to the Preset folks and their generous sponsors) came off exactly as the planners had hoped. It was an opportunity to reconnect, get energized for the days ahead and to find common ground, if only for two hours. Terrific.

While I missed the Wednesday DSE reception, I was told that it was also very good, although not as cozy as the mixer. At the show, we experienced a near disaster involving display mounts for our new booth. To make a long story short, Amy Moss of Peerless saved our bacon, driving us to one of her local customers so we could buy the exact mount we needed. At the same time, one of our customers, Mark Pickard, appeared out of nowhere with a tool box (he was there to assist his wife's company), and helped us drill new holes for the mounts. Somehow, the displays were up and perfectly aligned at 10:05. Thanks, Amy. Thanks, Mark.

Also at the show, I saw several examples of vendors referring leads to other vendors rather than trying to make a square peg fit into a round hole. More proof that miracles do happen. Glimpses of compassion, respect and community. Wow, we may really be headed for greater things here!

An interesting article on CNNMoney.com this week points toward the role that digital signage may have in the never-ending battle by brands for shelf space at retail. The article includes a nifty picture of a Wal-MartTV end cap where the featured product is boosted by an eye-level digital sign promotion.

The article describes how Wal-Mart and other large retailers are cutting brand name items from the shelves and promoting store brand replacements, which are almost always higher margin items. The article cites two examples where the brand that got cut negotiated its way back onto the shelves. The first brand (Hefty Bags) agreed to actually manufacture the store brand for Wal-Mart. I wonder if Wal-Mart's margins improved in that deal. The second brand (Arm & Hammer) got its detergent back into the stores by agreeing to boost advertising. Take a guess where those ad dollars ended up. But this is not a diatribe against Wal-Mart's well-documented business practices. Instead, it is a look at how digital signage may influence the merchandising mix at retail, and how perhaps the need to promote may drive some networks to be brand-based in the future.

No one has contested the idea that promotion at the point of decision and the point of purchase is highly effective. Numbers are starting to trickle in to support significantly higher effectiveness of digital signage over traditional P-O-P advertising. As the battle for shelf space continues in an environment of ongoing line extensions, something has to give. Retailers have invested millions of dollars on sophisticated tools to measure profitability of specific items and ROI on shelf space. They will continue to reward top performers with preferred or increased facings on the shelf…. that is just good business. Profitability calculations have traditionally considered trade promotions, including warehouse slotting fees, market development funds, co-op advertising dollars and other line items beyond simple gross margin. However Sarbanes-Oxley compliance requirements and FASB accounting rules have complicated the use and effectiveness of traditional trade promotions, especially for the manufacturers. It may turn out that in-store advertising support on a digital signage network may provide a significant benefit to the retailer and still qualify as a marketing expense (rather than an increase in COGS) for the manufacturer. This seems logical in cases where the in-store networks are not directly owned by the retailer, and the promotional dollars are not flowing directly to the retailer, and may also be valid in cases where the retailer controls the network.

Another potential outcome of the brand battle for shelf space may be brand-owned or brand-sponsored networks. In this scenario, brands may invest in owning or underwriting (perhaps as a category exclusive sponsor) a digital signage network within a channel. While this may be challenging in grocery and mass market retail, it is not at all inconceivable in the DIY or other category killer formats, where brands routinely underwrite the costs for in-store demonstration and "retailtainment". It has already appeared in some department stores, especially in the cosmetics department. If it means some level of assurance of shelf and floor space, along with the benefits of increased sales, you can bet the the brands will look at it seriously.

At one level, brands and brand marketing dollars are essential to the ultimate success of digital signage at retail. On another level, digital signage may offer the brands a very effective way to keep retailers happy, achieve high ROI on marketing dollars and still comply with Federal and FASB rules. Bring it on!

 

Last week, in a post titled “Getting The Message”, we discussed how three forces appear to be engaged in a battle for the hearts, minds and wallets of the digital signage marketplace. The unstated thesis of the post was that marketing dollars are likely to have a greater influence on buyer and investor perception of our still-young industry than unbiased analysis or hard-earned lessons from insiders. That was not a gripe: after all, you get what you pay for in this world. In any event, the post closed with a call for industry leadership and standards, without which we risk allowing the marketing machines of giant technology companies and advertorial publishers to define the industry and its priorities. In my mind, allowing that to happen would be a disaster.

The post, and in particular the call for leadership, opened a discussion regarding the Digital Signage Association (DSA), its work, organizational status and future. When writing the post, I had contacted David Drain, Executive Director of the DSA, and asked if DSA was a 501(c)(6) tax exempt, non-profit association. I knew that in fact it was not, which David confirmed. I chose not to open that can of worms in the post, because it deserves its own post, and a more detailed discussion with David out of courtesy. At this point, the discussion has been had, and this is the post.

Before entering the digital signage industry in 2004, I spent most of my professional career as a retail IT consultant, first with a Big 6 firm, then my own firm and subsequently with a public entity. In the course of those years, I was exposed to many industry associations: The National Retail Federation, the Direct Marketing Association, the Food Marketing Institute, the National Association of Chain Drug Stores, the National Association of Convenience Stores, and the International Mass Retail Association (renamed RILA in 2004). I was engaged on projects by both DMA and IMRA, have attended more conferences than I can remember, and presented at many. I came to appreciate that these associations are examples of effective voices and leaders of their industries. They have wide and deep support of suppliers, users and constituent companies. They provide advocacy, education, leadership on standards, and many member services. They have their own conferences, which provide a venue for all of their agendas and supplemental revenue to make them possible. Some have their own magazines that provide monthly or quarterly touch points with their members. Visit the links above and get a flavor for how those associations operate and serve their industry. Digital signage as an industry needs that kind of organization to take its next important steps forward. And to their credit, I think it is fair to say that DSA’s own leadership knows this. Getting there is the challenge.

DSA, established in 2007, is a part of NetWorld Alliance, a for-profit media company focused on B2B communications. To be fair, in 2007 and probably until now, a standalone non-profit association was probably not feasible in our young industry. NetWorld took the initiative to get the ball rolling and has underwritten (and presumably benefited from) the growth of the DSA. Under NetWorld’s auspices, DSA has accomplished many positive things. However, the call to separate DSA from its for-profit roots is out there, and it seems to be the correct call at this point in time. Here’s why: A true advocate must be independent. A true neutral advocate cannot have a web site plastered with advertising, or share resources with a sister industry web portal business (Digital Signage Today) that only allows external hyperlinks to paid advertisers in its content. To be clear, DST can and should have whatever editorial and advertising policies it wants (even bad ones like the link policy), but DSA’s relationship to it undercuts their desired position as a neutral advocate and leader.

There are over 400 members of DSA today, and room for aggressive recruitment of many more. Part of the recruitment drive should be fueled by a new vision of what the DSA is going to be. Until DSA is split from NetWorld legally and organizationally, it will not achieve the type of presence and leadership that other industry associations have achieved. If getting to that level is not their goal, it will open the door for another entity to step through and make it happen.

In 3 weeks, most of the people reading this post will converge upon Las Vegas for the largest trade show in our industry, the Digital Signage Expo. Six weeks later, back in Las Vegas, and again in November in New York, The Digital Signage Show will also offer great venues for education, selling and networking. DSE and TDDS are run by terrific companies with great people and both provide important services to the industry. That being said, if a non-profit association is to emerge as the linchpin of the industry, it will be absolutely vital for it be in the conference business. Its conference(s) would be a hub of association meetings, the key event from an educational perspective, and an important source of revenue to advance the goals of the association and the industry. Again, look at the other associations mentioned above. Doing so seems to make it clear that a precursor to an independent association would be development of a plan for owning and driving an industry conference schedule. This would not preclude the existence of non-association conferences, but like anything else, supply and demand will find their balance. In my opinion, an independent association (whether it is DSA or a new entity) would be a non-starter without this vital piece.

Digital signage is experiencing explosive growth, consolidation at many levels, the entry of very large corporations, and the scrutiny of people who don’t necessarily get it or share our enthusiasm for this emerging media channel. We need and deserve a neutral, non-profit industry association to drive education, advocacy, standards and industry presence. The DSA currently has the best shot of becoming that voice of digital signage. If they don’t seize the day, another entity will surely fill the void. Let the discussion begin.

 

Take a moment to ponder the plight of someone from outside our industry and community trying to get smart on digital signage. What would a potential network owner, advertiser or investor, see when they start to undertake some diligence on the business many of us work in day-to-day? When you take that step back, you will see several constituencies at work, pumping varying messages and agendas through various channels to prospective customers. These messages and agendas will often seem to conflict, even though the desired end game of all the players is presumably a larger, faster growing, more robust industry that creates more opportunity for profit. What a newcomer may perceive will be greatly influenced by what they read and hear, and how they come across the information. In the absence of leadership and standards, money will likely drive perception.

At a macro level, there are three loosely-defined constituencies within the industry speaking to potential customers with different messages and agendas. The first group is the big technology companies, with a message that it is technology that matters, and an agenda to sell their specific technology to the exclusion of competing technologies. Think Intel vs. AMD; Windows vs. Linux; NEC vs. Samsung and LG. These giant companies are makers of building blocks that are not industry-specific, with relatively few competitors in their defined space. The potential volumes are huge, however, and the stakes are high. Strategies to win the hearts and minds of influencers are fueled by incredibly large marketing budgets. If you don’t think big budgets help, do a search on Twitter for “Intel digital signage concept”, and understand that the related news is now over two weeks old. That exercise will reinforce the thesis that money drives perception. A newcomer reading press releases from CES and NRF might think that the state of digital signage art is 7-foot touch displays with holographic images, facial recognition software and the ability to “select” the ads you see. Very Minority Report-like. The fact that this is not an available product or that there is currently no real market for something that expensive is not an important part of Intel’s message. Their goal was to demonstrate what can be done with their technology. That it might create a perception that it should be done is less important to them. The same exercise can be undertaken for the Intel-Microsoft “open standard” announcement, the recent NEC/VUKUNET announcement, and the upcoming Cisco Ad Exchange announcement. A newcomer might think that they each re-invented some aspect of digital signage.

The second group is the army of digital signage foot soldiers: the solution providers, content producers, aggregators and consultants. These are the people with the deepest experience and the most customer touch points. To the extent that one can generalize their message, it is that execution matters most and that their products and services drive execution excellence. Their agenda is to leverage technology in a manner that advances their corporate goals. Most of the industry’s players live here, and with them, most of the lessons learned at the vanguard of the industry. As a group, though, their total revenues may be less than the ad budget of a Cisco, Intel or Microsoft. So the lessons learned and their messages seldom get the attention of a big tech announcement.

To compound the challenge, the large number of competitive offerings across each space makes messaging and differentiation problematic. For example, a solution provider must slay dozens of potential dragons to win a customer. The resultant struggle to differentiate has caused outlandish claims, odd behavior and lots of confusing messages. It is hard to imagine how a newcomer might sift through all of the clutter to gain actual insight.

The third constituency is the digital signage mediasphere, consisting primarily of the trade press, web portals, non-corporate bloggers and trade show operators who have entered the news and editorial space of late. Their core message is that information matters most, but each applies their own filter and level of analysis to the flood of information available. Their agenda, in addition to building readership, sponsorship and/or attendance, is to raise the tide for all the boats in the industry. Each of these entities relies upon sponsors, advertisers and exhibitors to keep the lights on and web servers humming. None should be expected to treat their customers without some degree of deference. But how is a newcomer supposed to know where the bones are buried?

There is even a layer of pseudo-media out there, best evidenced by what is now an annual Digital Signage/DOOH Supplement to USA Today, published by Media Planet. If last year can be taken as a guide, then the supplement will mix some analysis of the digital signage space with case studies, quotes and insights from… wait for it… yes… the companies that paid to sponsor the supplement! Where I come from this is called an advertorial, a vehicle where marketing dollars can buy you the imprimatur of best-in-class. But a newcomer might mistake it for actual research. I find that scary.

We live and work in an industry that is growing up rapidly. Make no mistake: the battle is on to gain mindshare of newcomers and veterans alike. Three distinct constituencies are driving separate agendas, and all are driven by potential profits. Sorting out the relevant and useful information will be a difficult task for newcomers. Helping them do so is a requirement for the continued expansion of our market. How we collectively do that will be no easy task. The late, great Warren Zevon once penned, “send lawyers, guns and money.” Money isn’t going away, but maybe instead of lawyers and guns we can settle on leadership and standards. But that is a discussion for another day, hopefully before the next line in Zevon’s song is operative.

(NOTE: This was originally posted on the Broad Thinking. Narrowcasting. site on 1/25/10.  It generated some interesting comments, including the two copied below, related to DSA.  In response, a second post on this topic is upcoming, which I hope will generate more discussion.)

Ken, as a board member of the Digital Signage Association, I have respect for your insight. I work for a digital signage "technology" company that lives in the shadows of the big guns too. One of the biggest reasons I support DSA is because I believe they have a balanced approach in presenting a unified message. The message of DSA comes from the industry at large, including suppliers, specifiers, and end-users. Because of this balance, I think they are providing strong leadership in an otherwise confusing marketplace.
- David Little

Well put Ken. I think you have ruffled a few feathers, but nailed it. I've gone on record that having a trade association tied so closely to a media company is definitely a concern. Hopefully over time, as (if?) the space matures, we will see more separation and an independent association take wing. 
- Bob Cooney

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.

Mobile integration with digital signage networks and displays is certainly a hot topic, and is likely to remain hot for the foreseeable future. After all, highly sophisticated smartphones have become the norm for consumers and business users. In March, 2009, iSuppli reported global smartphone sales at 173.6 million units and predicted an increase to 192.3 million units in 2009. That is a lot of computing power in the hands of very mobile and economically viable users worldwide. The standard web browsing and email functions are augmented by increasingly available and fast 3G networks, integrated cameras, third party apps and GPS capabilities, to name a few. Even more advanced functions are most certainly on the way. To ignore all of that capability in the pockets of digital signage audiences would be, at best, a missed opportunity. The questions of “if” or “when” related to mobile integration appear to be moot. Steve Gurley has done an excellent series of posts on the Digital Signage Association website that provide great background on the “why” and “what” related to mobile technologies, and they are worth a read. The goal of this post is to look at high value and high likelihood integration points are and how they are likely to appear in the marketplace.

The motivation to integrate mobile technologies with digital signage must go beyond the simple idea that we can. Ideally, leveraging the power of all those smartphones would enable network owners to engage, inform and even identify and/or measure viewers in a manner that adds value to their networks. The timing of how individual mobile technologies get integrated with digital signage will be directly related to how easily that can be accomplished. That in turn is related to two factors: consumer penetration of the underlying technologies, and the cost to implement them within a digital signage context. For the purposes of this discussion, four mobile technologies have been examined: SMS, Bluetooth, QR codes and near field communications (NFC). GPS-related technologies and applications have become increasingly common, but seem less relevant to digital signage, since any media player can be reasonably assumed to already be location-aware. For that reason GPS is left out of the discussion. A look at the four technologies against the parameters of penetration and cost to implement looks something like this:
Given the high penetration and low cost to implement SMS and Bluetooth, it is not surprising that they have been seen already in some digital signage environments. But are they going to be long term players? If the real value of integrating mobile technologies is in the ability of the technology to engage customers while increasing measurability and the potential for transactions, then the map may change to look something like this:
As Bluetooth is essentially a passive technology, the level of customer engagement is low. The very nature of NFC makes measurability and transaction potential very high. A look at each technology provides some insight.

SMS, more commonly known as text messaging, is a staple feature of consumer handsets, even on less advanced phones. It can be used within a digital signage environment in a few ways. A simple way is to embed a message to text a keyword to a short code (“text ‘specials’ to 12345 to receive coupons on your phone”) in order to receive information, links to web sites, or even coupons. We have also seen the use of SMS as a gateway to user generated content (UGC) in bars and public venues through text-to-screen applications. The beauty of SMS is that user cell phones can be identified, and users have opted-in to engage with an offer. In some cases, this may become a drawback, as privacy concerns may limit participation from some consumers. Texting as a method of interaction may fall behind due to the level of manual effort involved in utilizing smartphone keyboards and the fact that SMS is primarily the domain of the under 40 crowd, although that will change over time.

Bluetooth is also a widely installed feature in a large percentage of cellular handsets and smartphones. For the most part, Bluetooth’s short range data transfer capabilities are used by consumers for wireless headsets, hands-free calling in cars and quick data transfer between devices. The ability to broadcast information via Bluetooth requires only a little bit of hardware, a little bit of software, and a discoverable phone on the other side. Viewers could easily be informed that additional information can be downloaded via Bluetooth from as far as 30 feet away from the source. Applications of this capability are numerous. However, there are two challenges to attaining a high number of discoverable (Bluetooth-on) devices in any given environment. First, leaving Bluetooth on drains phone batteries faster than using it on an as-needed basis; and second, consumers have demonstrated a wariness to leaving their devices discoverable and open to unwanted “Bluespam”, even though most legitimate Bluetooth marketers would offer an opt-in to discovered prospect phones. As a result, Bluetooth may never achieve that “always on” status that would make it a prime candidate to drive integration with digital signage.

QR Codes, those customized 2-D barcodes that have recently appeared on storefronts courtesy of a Google promotion, provide another way to engage the viewer through their mobile phone. Upon using their phone camera to “scan” an image of the code, the web browser of consumer’s smartphone is automatically directed to a specific URL. The applications of this technology are interesting. Customers can be directed to web sites that can both provide and gather information, build brand, make offers, or conduct ecommerce. QR codes can be displayed within relevant content, or in a sidebar alongside the video window. (Finally, a productive use for the sidebar!) The customer interaction is opt-in, and involves launching an app on the smartphone and aiming the camera… nothing else. Customer identity is secure as the phone is used as a read-only device. Measurability, however, is high, since click-throughs to QR web pages are very quantifiable. Of course the QR app has to be on the phone, and the consumer has to be willing to use it. As mentioned in a post last year, the issue of built-in app standards may come up, but last week I was able to find a free app for my iPhone, BeeTag Pro, that worked fine.  We have created a QR code for you to test it out on (inquisitive types will be able to check out an advance look at a one-of-a-kind new product):
You won’t see much of this in 2010, but you can bet it is coming. A lot will depend upon how fast smartphone users load software onto their devices, and when phone makers decide to include a QR reader app as a core feature of new phones. QR’s success in Asia and the apparent support of Google will likely accelerate its adoption in North America and Europe.

NFC is an extension of an RF technology that many people have already used, although not in conjunction with digital signage. Contactless cards and fobs used for retail payment (think ExxonMobil Speedpass, contactless credit cards) have been around for some time and have a significant installed base. NFC will enable data exchange and even transactions between an NFC-enabled smartphone and either active NFC devices or passive RFID hot spots. It is set to emerge as a new standard feature in smartphones early in this decade. The concept of the cell phone becoming a transactional device is not a new one, and is highly accepted in Asia, where one can wave a phone at a soft drink machine and receive a cold beverage immediately, with the charge being processed through a credit card previously set up for such transactions. Now imagine a “smart spot” adjacent to a digital sign where one can swipe an NFC-enabled phone (whether it is powered on or not) and receive information, coupons and offers. The content of the digital sign presentation could make the viewer aware of opportunities to “wave and save” at the designated hot spot. Again, this opt-in technology puts control in the hands of the customer, and provides for many potential applications in a variety of environments. It is highly measurable, and geared toward transactions. As with QR, adoption will depend heavily on phone makers adopting it as a feature to include with their phones. Consumer acceptance will be likely be less problematic, given the success abroad as well as security concerns being addressed in a simple manner.

There are attractive alternatives for network owners to consider in their plans to integrate mobile technologies with digital signage. Each has benefits and drawbacks, and each will have its place in certain environments. Cost and consumer penetration would point to near term integration being centered on SMS and Bluetooth. The level of customer engagement and the potential for measurability and transactions bodes well for QR codes and NFC becoming the preferred mobile technologies for integration over the next 2 to 3 years.

Technology moves fast, and marketers and advertisers will begin driving mobile requirements in the near future. The ability of digital signage network owners to make their place-based displays both more engaging and relevant to their viewers and more compliant with the needs of advertisers may separate the winners and the losers.

 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.

 Long weekends are always a good time to decompress, reconnect with family and friends and to catch up on reading. I did a lot of reading, both for business (online) and pleasure (Kindle). Three streams caught my attention, and while they seem only tangentially related at first, connecting the dots results in some usable insights.

 

The first stream was a series of Manolo Almagro's pieces on user-generated content (starting on November 19th, here). Manolo is particularly wired into the UGC trendsphere both from a personal and professional perspective, and his travels expose him to trends well beyond North America, especially in Asia. So his insights and enthusiasm have a strong foundation. His presentation last month at the Strategy Institute conference in Chicago provided a number of excellent examples of how UGC can make the transition from online to OOH seamless for the person he defines as the "new, new consumer". In his presentation, Manolo pointed out that the new consumer:

 

 - Seeks out new and different experiences with brands

 - Prefers active engagements vs. passive

 - Ruthlessly filters messages, seeks to personalize

 - Expects 2-way conversations with brands

 - Consumes or creates some form of digital media on a daily basis

 

In subsequent posts, he advocates for UGC and moderated content filtering, while making sure that readers take note of the very real ubiquity and dominance of mobile devices. New consumers armed with powerful smartphones consume and create media in addition to consuming brands. They want those experiences to be integrated. Hold on to those thoughts for a moment, we'll get back to them.

 

The second stream related to a presentation given by Danah Boyd at the Web 2.0 Expo in New York. Ms. Boyd is a well-regarded Social Media Researcher, and her work in academia and business has associated her with brands like Microsoft, Harvard, MIT and Berkeley. She is a frequent and sought-after speaker on social media. Her presentation was a new pitch titled, Streams of Content, Limited Attention: The Flow of Information Through Social Media. It was remarkable for two reasons. First, it provided some terrific thoughts that can be applied to the digital media space; and second, the presentation itself was reportedly a debacle, as a giant screen behind her was used to post tweets from the audience in real time, which flustered her and took her off her game. It seems the audience had issues with the speed or her delivery, and the comments degenerated into personal attacks. Ironically, the social media expert was being skewered by unfiltered UGC delivered via Twitter! The show producers did something (real time twitter backchannel) to force interactivity in a forum designed for one way delivery. It backfired.

 

Boyd's talk, which got somewhat lost in all the controversy over the presentation, was actually quite thought-provoking, and has some elements that relate to DOOH. Here are some notable points:

 

 - She introduces the idea of "…content streams, streams of information. This metaphor is powerful. The idea is that you are living inside the stream: adding to it, consuming it, redirecting it."

 

 - We have transitioned from "…an era of broadcast media… to an era of networked media."

 

 - In this era of networked media and living in the stream, we are "consuming (content) to understand, producing (content) to be relevant."

 

 - "…what matters is not the act of distribution, but the act of consumption. Thus the power is no longer in the hands of those who control the channels of distribution, but those who control the limited resource of attention."

 

The third stream was Paul Flanigan's take on Black Friday, which was really a reflection on his time at Best Buy and how he watched the metamorphosis of the big day. Paul is yet another person who falls under the heading of "Totally Gets It". He shares some observations:

 

 - Best Buy (and other retailers) let the customers make a bigger deal out of it than it really was. Corporate definitely paid attention, but the customers themselves are what drives the advertising.

 

 - By leaking deals, you get them to wait in line at your store. Once in line, they stay there… They have made the commitment.

 

 - I have seen the customer change because it is no longer about the deal, it is about the event.

 

Paul goes on to observe how Black Friday is no longer about item discounting, because retailers are discounting year round these days. Instead, it has become "a cultural event". Black Friday may as well be renamed Campout Thursday, to more accurately reflect what it is now all about: the experience.

 

Now connect the dots: New consumers want to connect with brands in new ways… the power belongs to those that control the limited resource of attention…. the experience matters more than the deal. These observations were made in wholly different contexts, yet cobbled together, there is something to take away. We are facing seismic cultural and technological shifts that should be regarded as game changers to an industry that wants to position itself as legitimate alternative media distribution channel.

 

Clearly, as producers of this emerging channel of content distribution, DOOH network operators must be mindful of the dual concepts of the stream and the experience, and make efforts not to dead-end their evolving consumers. If we think that the stream begins and ends with DOOH content or ads, without allowing consumers to somehow engage, link or produce within our stream, then we may be taking their precious attention for granted. In today's networked culture, that might be a big mistake.

 

There is no silver bullet for achieving relevant consumer engagement. While mobile-fed and moderated UGC is appropriate for Times Square billboards and bars, it is probably not quite as appropriate in medical environments or branch retail outlets. QR codes, NFC and Bluetooth show promise for serving up links and new opportunities to connect with brands and content producers. Social media tools will find their way into the stream, perhaps through links or portals for UGC where it makes sense. In any case, DOOH networks need to find a way to become part of an experience that is relevant to their audience, leveraging the attention the consumers grant them. To ignore that imperative would put them in danger of suffering the limitations of broadcasters.