Dec. 27, 2010
by Keith Kelsen, author of "Unleashing the Power of Digital Signage" and CEO, 5th Screen. Read part 2 of this story.
As another year in the digital signage/digital out-of-home industry rolls by, I'm again this year revisiting the biggest trends of 2010 while looking forward to 2011.
The year 2010 brought the industry to its feet by incorporating a new name, the DSA (the Digital Screenmedia Association, formerly the Digital Signage Association), and incorporating the trade show that also has a new name, CETW (or Customer Engagement Technology World, formerly KioskCom and The Digital Signage Show), as the official trade show of the industry.
The advertising network association OVAB (Out of Home Video Advertising Bureau) also changed its name, to DPAA (Digital Placed-based Advertising Association).
And the Digital Signage Expo invented a competing association called the DSF (the Digital Signage Federation).
Why all this? The industry is growing up and is now part of the mainstream. I contend that we reached the tipping point in 2010, and here is why: As defined by Malcolm Gladwell, the tipping point is "the level at which the momentum for change becomes unstoppable." Are we unstoppable now? I say yes. Signs of ad spend, consolidation, standards, mature business models and the increasing digital landscape in our world have driven the tipping point. Five media screens are now in play and DOOH/digital signage is more of an integral part of the campaign to reach consumers. In a 2010 Arbitron study more consumers see DOOH in a month than have ever texted a message or have a Facebook profile or have seen an online video. This is 71 million viewers per month. The lower cost of technology and big names in the industry, including HP and Intel, are now in full force, which have tipped the industry into the mainstream.
You can see my picks for 2010 trends to see how I did at prognostication, and at the end of Part II of this year's trends piece you can vote on the one you think will be the #1 trend in 2011.
So without further delay, here are the top 10 trends to look for in 2011:
1. Cross-media platform and technology integration
"Digital will soon be more ubiquitous than TV," said Bonin Bough, director of social media for PepsiCo. The complex path to reaching the consumer will drive a technology and media integration that will bring seamless transitions from screen to screen over the next few years. This trend has really been in play as evidenced in the Digital Screenmedia Association name change, but the reality is that mobile and digital signage integration have begun to blur the lines. Driven by smart phones' newfound abilities, digital signage has embraced this simply because DOOH is a key activation and engagement point for mobile interaction in the marketplace.
In addition, the content creation process has been re-evaluated to include "all digital." Creating content objects and using digital asset management systems to manage the vast amount of content that exists to feed all screens with consistent messages is rising to a critical nature to offset the costs of creating media.
The integration of technology has been noted by several companies in the industry: Symon introduced its mobile platform that works with digital signage; Enqii and Kombi joined forces to integrate mobile for retailers; Reflect Systems and TXT4CRM have partnered in text messaging services for Target and GameStop; then there's Pixel Inspiration's Twitter integration on the social media side and Clear Channel's recent Corona promotion allowing people to upload Facebook photos of themselves to a billboard on Times Square.
It's not just mobile; more brands are spreading campaigns over multiple platforms to reach the elusive consumer in today's wild digital world.
Look for digital asset management system partnerships, corporate media silos breaking down and digital signage integration with other screens, both in technology and on content.
2. Content will continue to be at or near the top of the list
Content strategies and discussions began to trend quickly in 2010. More presentations were made on content at shows in 2010 than the three previous years of trade show presentations combined. It has been estimated that content accounts for approximately $3.5 billion of services for creating content that plays on digital signage ... that is more than the $2.5 billion in the technology sector and more than the $2.1 billion in advertising placed on DOOH. This year will see more of the same. Content is king and will outspend any other sector from here to eternity. The upcoming Digital Signage Expo 2011 in Las Vegas in February and the industry's CETW show in San Francisco in April are already on track to deliver more meaningful content-related seminars.
The number of companies claiming to create content for DOOH is up from around 125 houses worldwide to more than 250 in 2010 alone; although notably some companies have been doing this for a while, like Blue Pony, St. Josephs Content (Alchemy), Electronic Art and Saddle Back Productions. Major TV and Web content production houses are now eyeing content production for DOOH.
As the lines of technology blur screen to screen, so does content creation to deliver content that can run across all platforms.
More sophisticated content that addresses engagement and interaction will be the trend.
3. M & A and investment - The big shakeout of 2011
The merger and acquisition trend was #10 in 2010. And we did see a record number of acquisitions during the year. Here is the quick list: RMG Networks acquires Pharmacy TV; Access 360 Media purchases Arena Media; Ad-Dispatch acquires Volt Media; Digiadvans acquires Mobile Eco Ads; JCDecaux acquires assets of Titan Outdoor UK; Millennial Media acquires TapMetrics; SMART acquires NextWindow (Canada); Sony acquires Convergent; Verifone acquires Clear Channel Taxi Media; Zoom Media acquires Sports Display; Cruise Media Group acquires Mommentum Health Media; Intel acquires Cognovison; Barco acquired dZine; Stratacache acquired enVu; GoGo Cast acquires Digital in Motion; Haivision acquires CS Software Holdings LLC (CoolSign); Cineplex Entertainment acquires DDC Group International; UNIGUEST acquires Showcase Technology's U.S. hotel business center customers; and Axoro Corp. acquires advancedMethod, a division of EIKI Digital Systems.
To my surprise, in Brazil almost every major network was snapped up by either Elemidia or Grupo Bandeirantes de Comunicação within six months. That is more than 10 networks! This was an unprecedented move, and I believe the United States will follow suit. Currently this is a consolidation and growth opportunity.
If you look at each one of these deals the details tell more about where we are going and where we have been. Some of these were asset-only deals, others were strategic expansions.
Who will dominate the space, and which brands will gain in the limited marketplace of this media's real estate? Will we hit the top 50 DMAs in 2011 with one network? Which technology companies will be part of the big picture of larger networks?
More consolidation than even 2010 in both technology and ad networks will be a significant trend.
4. Even larger amounts of ad dollars will migrate to DOOH
This shift in ad networks is now three years running, and it's here again. The growth defies gravity in many economic circles, but even though all advertising was down in 2009 and DOOH was down .09 percent, it was definitely up in 2010, to the tune of 14.8 percent. The fact remains that advertisers are trying this, and it is working. It still takes an incredible effort to sell these networks, and I believe consolidation will be the single most profound effect that will speed the channeling of ad dollars to the industry. Around the world DOOH ad revenue is the fastest growing of all media. DOOH in the United States is now close to 35 percent of the out-of-home spending; in Brazil they saw an incredible, high-double-digit growth in 2010 year over year.
Agencies are still recoiling from the downturn and are squeezed to get more out of every dollar spent. And no mistakes can be made with brand dollars. Recently I spoke with a major agency that had an issue with matching a product being sold at a location versus an ad placed on a screen where the product was not sold. This is just one of the pitfalls that can be avoided if proper research is done up front.
It is not that simple right now to buy DOOH, but with new media buying tools and consolidation this is changing, as demand from the brands and proof from the networks is getting attention. Remember the impact of aggregators like SeeSaw Networks and ADCENTRICITY and, frankly, the ad-based networks themselves that have made significant inroads into the agencies and brands. Most significant are the numerous agencies that are participating in DOOH. The recent DPAA meeting in New York City is a good example of how the agencies are looking for opportunities in DOOH.
More spending on proven networks will be the trend.
5. Experience, engagement and interaction
This trend is still strong, and the engagement factor had taken even more leaps in 2010. Multitouch screens and new ways to interact with them have entered the marketplace recently, and more of these types of interactions, plus more innovation on gestural interactions, will appear this coming year.
I saw a number of new products that were introduced, including one from a company that I founded, MediaTile, and that had been in the cooker for years, "The Human Kiosk" that allows face-to-face interaction via kiosk-based digital signage and over a 4G network.
Mobile also falls heavily into this category, as mentioned in Trend #1 and last year's Trend #2. Latent consumer/brand mobile conversations are activated by digital signage because DOOH is in the marketplace. DOOH companies have been engaging a mobile strategy because it is working, and agencies are on board with it. These types of experiences bridge the online, mobile and DOOH experiences.
Purchases made through mobile are a large part of the next confluence of buying, and it will be anything, anyplace, anytime, and DOOH will be a key activator of this newfound commerce.
I predict mobile will continue to lead the interaction and engagement category in 2011.
Check back tomorrow for Part II of Kelsen's annual trends piece on DST. - ed.