Article
Digital signage: The top 10 trends for 2010, Part 2
The second part of the series looks at events that will cause the industry to reach its tipping point in 2010.
December 29, 2009 by Keith Kelsen — chairman, 5th Screen Digital
This article is part two of a two-part series. Read part one here.
6. Progress in content standards
This has been on the industry agenda for many years now. POPAI has made some progress in this area, but adoption is coming out of the need for advertising agencies to book across diverse networks with different needs and formats. It is a huge problem for agencies and brands, especially for the creative types.
It is a twofold problem. One, defining the standard for the type of media, such H.264, MPEG2, AVI, 16:9, 4:3, is going to be a challenge. And two, the creative types are beginning to understand that this is a new medium and it needs a unique approach.
So I predict that a lot more progress will be made on this front. Every digital signage software company will begin to accept wider array of content on their system and have open APIs that will help connect content, metadata, playlists and networks together. Those companies that do so now are already ahead of the game. This is a must for new ad networks that are built in 2010. Some will say create a standard media that everyone can accept first. Flash and H.264 are more than likely the long term winners for this trend (just make it 16:9, please).
7. We will hit the "tipping point" in 2010
Many in the industry have said that we have hit a tipping point. But which one? The difference in 2010 is that this tipping point has all the legs of the stool to stand on. The strides that the industry has taken in 2009 were tremendous on several accounts:
1) High growth in the industry (considering the economy) 2) Ad-based network revenues were up 3) Mergers and acquisitions were at reasonable numbers that actually made sense 4) Investment was significant even in a down economy 5) The Digital Signage Association hit 400 members and now has clout. 7) Education has been excellent at the industry events 8) More agency and brand acceptance (because of the economy) 9) OVAB Standards are accepted by agencies and are here to stay.
8. Large-scale 2010 projects will be at an all-time high
There are significant number of RFPs and large projects that are slated for 2010. Why? Digital signage and DOOH is getting its head on straight about what works and what doesn't and the proof is in. And if one doesn't know what works, then take a look at Trend No. 3 again. What is working? Is it about the eyeballs? In certain networks, yes. In others it is about the sales lift and for some it is just about information. And elsewhere the criteria for success has been proven with hard methodical time demonstrated proof of something not even remotely related to eyeballs.
9. More mergers and acquisitions and more investment into the space
Where the sound proven business models prevail, the money follows. Consolidation through mergers and new investment will be one of the hottest trends in 2010. With less than a million screens penetrated into the marketplace, DOOH made news on every VC's and investment banker's desk in 2009. Media companies like TV and Internet will certainly look to digital signage as a new horizon once they figure it out. The funds for this media growth are going to be divided between mobile and digital signage as these two new mediums battle for attention.
10. Growth in ad-based networks and shift in ad dollars
The shift in ad dollars was in my 2009 Top Ten and we saw it work. This shift is still trending for 2010. The success of ad networks in 2009 (brands looking to reach the consumer in more relevant ways) was remarkable and 2010 will find more networks being built to service the relevant markets. Expanding networks are finding that the business models they worked so hard on refining are going to pay off with viable profitable companies in 2010. This, in combination with the proof behind us, will help new networks sprout and ad dollars flow.
It takes hard work, relationships and proof of audience for these networks to be successful. The average engaged national brand took one year to make a buying decision on large networks. The good news is now they are hungry for more similar opportunities thanks to the pioneers of these networks.
One other major factor is costs of building networks are way down. To build the same network that was built in 2005-06, including the experimental business models, mistakes, and software and gear, is far less than half of the original investment.
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