Dec. 18, 2012
By Lyle Bunn
As it is with most good stories, the best lies ahead for the dynamic signage sector.
My year-end summaries over the past 10 years have reflected on sustained double-digit industry growth; noted the price/performance maturation of technology components and the ease of their integration; celebrated critical mass and the "tipping point" of installed ad-based displays; and applauded the entry of billion-dollar companies as suppliers in the sector while compelling attention to analytics and the need to improve content.
And 2012 has seen its share of important stories and trends, though these less dazzling than those of previous years. At an estimated $7 billion in annual revenues, growing on all accounts at a continued, double-digit compound annual growth rate, employing an estimated 50,000 professionals, as messages are presented on more than 2 million networked out-of-home displays, the dynamic place-based media sector is moving beyond its early adolescence as it quietly moves forward in providing competitive advantage to end-users and their capable suppliers.
The most important industry news items of 2012 were generally not published or profiled, as non-disclosure agreements and project privacy shrouded initiatives and kept them from public (and competitor) view.
Confidentiality related to the use and business impact of the media is the torturing knife that twists in the side of dynamic signage industry growth...
One imagines how many marketing, agency and business executives have wondered at the value that the McDonald's McCafé menu/promotion board delivers, or have been impressed by the engagement value of the medical waiting room displays of Care Media. Ad and internal messages on digital place-based deliver high value.
"Owned" media is the dominant communications force in customer, patron, staff and student engagement. End-users in food services, retail, banking, entertainment and other patron-based organizations have moved into the "early majority" phase to establish dynamic signage networks as part of their "owned" media and communications infrastructure. Many sought to better integrate this medium with other owned devices such as Internet/intranet, publications, brand signage, apps, etc., as well as with "paid" and "earned" media. "Proof-of-concept" projects generally have moved to build out, at varying pace based on the analytics that are used, and many networks are moving to integrate with "audience-of-one" approaches through functional improvement and content.
The fact that few significant case studies have been released, that industry award nominees typically offered very little information about the business benefits achieved, and that few end-user/vertical market conferences carried dynamic signage education sessions (these are typically member-directed association events) are indicators that dynamic signage is seen as providing significant business value and competitive advantage for the organizations that use it.
Too seldom in 2012 were there instances as seen at Digital Signage Expo when digital signage project executives of Zion Bank were part of the show floor booth of Broadcast International. They answered all questions about their project planning, deployment and operating experience, while showing their support for this "owned" medium and Broadcast International as its supplier. Zion Bank was recognized with a Digital Screenmedia Association Crown Award as the best financial services deployment in 2012.
This shrouded activity was reflected in the supply side of the industry too, as significant industry providers worked behind the scenes and emerged in 2012 stronger through internal restructuring. Examples include IZ?ON, the retail and food services network operator formerly known as Premier Retail Networks; as well as Broadsign (which was the first to offer a software-as-a-service, or SaaS, supply model); and the broadcast division of Harris Corp., of which the Digital Media Group is part, announced new ownership. Ad-based network operators such as RMG Networks (travel media) and Care Media Holdings (medical waiting area media) have been diligent and are flag-bearers for the ad-based sector.
The failures that 2012 has seen will result in project correction or attrition in 2013. Projects that might soar in the value that they provide, do falter, fail or under-perform due to the lack of wide support and, primarily, the lack of the application of knowledge. Elusive success will inspire review, re-positioning and the examination of alternative approaches on the part of some ad-based and corporate networks, while these same approaches are used by successful networks to refine and scale their operations for economies and efficiencies. 2013 is all about optimization.
And 2013 will be another positive year in the decades-long success story that is dynamic signage and digital place-based media, in particular for diligent project directors and suppliers. Specifically:
- As Health Care Reform legislation, in particular Section 4205 of the Patient Protection and Affordable Care Act of 2010, is implemented, the food services sector will substantially increase their use of dynamic place-based media. This use will spur interest and use in other sectors. Projects in retail, financial services, consumer services, health care and for corporate communications will advance in this current "post-cutting, must-build" economic climate.
- In realizing that successful dynamic signage use and supply is the application of knowledge, proven training programs available online and from industry associations will offer an ongoing foundation of project and professional success. Experimentation and "trial and error" continually give way to structured processes and proven approaches. Underperforming projects and investments will be reviewed and re-positioned.
- Static signage and digital graphics providers will continue to become a supply force of dynamic signage as the International Sign Association offers its members and affiliate regional associations education and resources.
- Increased integration with data and information feeds, as well as with "paid," "earned," social, mobile and proximity media will increase the relevance and the business value of dynamic media.
- Aggregation of display inventory, which has had extremely limited success and sector impact, has a clear path to success during 2013 through operational cooperation. Ad revenue achievement challenges on the part of ad-based networks, the maturing of ad sales and trafficking platforms, and the availability of the ad management and inventory software layer will improve the efficiencies of media commerce on the part of digital place-based networks.
- Agencies will show more enthusiasm for dynamic place-based media as their clients become more demanding and look to better integrate "owned" with "paid" media. The champions of place-based media are the brands themselves, the professional teams of which are ultimately responsible for brand success. It is this brand-driven commitment that is motivating change in favor of brand growth by contributors such as agencies. The fierce competition among agencies and the inherent focus on value and performance to brand client is a point of opportunity to agencies and to the brands they serve.
- Managed services will become a primary supply option. The convergence of hardware management and cloud services with the need to treat digital signage as an operating, and less as a capital, expense positions the opportunity for managed services organizations and supply approaches to emerge as a significant market option. Ad-based network operators, turnkey system providers and providers of other business-related managed services are well positioned to benefit from this natural trend in sourcing and supply. "C suite" engagement (CFO, CIO with CMO) will drive outsourcing.
- Strong supply capability will become stronger, resulting in revenue consolidation around those firms that have built and serve a client base. New suppliers risk being driven to low margin and niche opportunities and being "also-rans" as key business deployments go to proven suppliers.
- Improved research on the sector, the lack of which has stalled investment internally and externally, will become available. This is a must for the growth of the sector.
In summary, the sector has moved beyond the "wild west" stage of the post-9/11 economy, through a period of technology development and deployment in the mid to late 2000's, and is finding its place as a communications and engagement medium, linking and leveraging other media assets and delivering value by "moving the needle" on revenues and providing business operating economies.
The "mystery" around the technologies that underpin dynamic signage is waning as end-users realize that technologies are but part of the business ecosystem required in order for benefits to be realized through the enabling effect of these digital technologies.
The planning and operating construct are clear and well proven. The starting point for investment and optimization is in stating the business value to be realized. Then to define the "content" required to achieve these goals. This is followed by the identification, selection, deployment and operation of the technology infrastructure required to present the content that will achieve the business goals.
Bunn is a recognized contributor to the success of dynamic media use and supply through his analysis, advisory services and training. He has assisted many hundreds of networks, published more than 250 papers and serves on numerous advisory, event and award panels. For further information on any elements of this 2012 review and 2013 outlook contact Lyle@LyleBunn.com.
Photo courtesy of "Caveman Chuck" Coker.