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Update: Top 10 digital signage trends for 2009

The MediaTile chairman revisits his predictions from January — most of which have turned out to be correct.

June 15, 2009 by Digital Signage Today

Keith Kelsen is executive chairman of the board of The MediaTile Company and chair of the Content Committee for the Digital Signage Association.

In January of 2009, I wrote the year's "Top 10 Digital Signage Trends." I thought I would revisit my predictions to see what I had missed; what had I predicted correctly and what incorrectly?

As it turns out, I scored an 8 out of 10, having missed two trends that are now apparent. Following is a revised Top 10 (plus one additional) Trends for 2009:

Trend #1: Content is the next main talking point for the industry

As an industry, we now have great, proven technology to deliver messages across DOOH networks, so now what? Dare I say it? I have to! "Content is king." Why? Since prehistoric times, as evidenced in cave paintings, people have used images, placed where others would encounter them, to communicate important information. For more than 120 years, rapid advances in technology have transformed human communication, delivering information faster and to a greater degree of relevance. The technology that has led us to a new medium, digital signage, has become commonplace. Now, more than ever before, "the message is the medium." The content running across screens provides digital signage its moment to shine. As a new medium, digital signage needs to define its own creative approach to content. This will be a pivotal year for great content.

I am still very bullish on this prediction, and given the amount of attention focused on content in trade events, discussions and shows, content is THE No. 1 issue of the year (and I believe for decades to come). Quoting my industry colleague, Lyle Bunn, at the Digital Signage Expo (DSE), "Content was of primary education and exhibit focus for the first time at an industry-wide event." In a Web survey conducted by my staff, of 227 companies claiming to create digital signage content, only 47 actually could provide samples demonstrating a basic understanding of content for digital signage.

Trend #2 Traditional broadcasters are getting into the digital signage marketplace

With the television industry facing an unprecedented downturn, manufacturers and producers of content are looking to expand and capitalize on the DOOH/digital signage industry. It is the natural evolution as a new media develops that many companies put resources into testing the market. Some jump in with both feet as they have no other alternative. Production houses employ expert creative teams that can bring top-quality content into the world of digital signage. Some will have to play catch-up; some will leverage Web and Flash skills to optimize great content for this new medium, for maximum impact and to achieve unprecedented returns. We will likely see acquisitions coming from the TV broadcasting industry, with companies essentially buying their way into the market to make up for lost time in the DOOH industry, around technology and production.

This trend is becoming increasingly apparent. At the National Association of Broadcasters, Harris, a traditional TV hardware manufacturer, announced the advent of Punctuate for digital signage, to provide digital signage solutions for a McDonald's pilot. Wegener Corporation, a leading provider of equipment for television, audio and data distribution networks worldwide, announced at DSE this year that it will provide a technology preview of the WEGENER iPump 525 IP Media Player and WEGENER Compel Connect. We see CNN Health News and ABC Health News transmitted in digital signage deployments across hospitals and doctors' offices. NBC also creates content for college campus networks. A number of production companies have also entered the creative side of the equation to do what they do best: create content.

Trend #3 Agencies are awaking to the power of digital signage

Many agencies are realizing that DOOH is a valuable area to explore. It is a difficult transition from traditional media to DOOH. Some agencies are prompting brands to buy into this burgeoning market. Open software platforms for the DOOH market will excel as they allow cross network placement, helping agencies drive more comfort and scale widely across the digital signage landscape. Agencies are also realizing that DOOH includes more than digital billboards; that it extends beyond this early digital signage incarnation. DOOH is being used to build brand networks at the shelf and in-store, to capture the consumer at the best possible time: at the point of decision. In-store media is the new frontier for agencies looking to expand product presence and increase sales at the shelf. The good news is that the media is measurable with real sales-lift as proof. In-store media is more than just capturing "eyeballs" and branding, it is about the merchandising and selling of product — not to mention the resultant tremendous in-store associate training benefits gained at the same time.

A number of agencies are being turned upside down given current economic volatility, and need to rethink strategies for achieving the best ROI for their ad dollars. Jack Sullivan of StarCom Worldwide (one such agency) had this to say about the Digital Signage Expo: "DSE was relevant, provocative, a harbinger of new digital media choices and reflective of the emerging array of new and exciting media." Other well known agencies attended DSE and KioskCom Self Service Expo and The Digital Sigange Show to help them further understand the opportunities of this new medium. Also quoted from the DSE was Gwen Morrison, WPP (The Store), "Digital Signage Expo had a great mix of industry, agency and brand advertiser representatives, and provided the latest news on technology andcommunications applications."

At the recent Strategy Institute "Content Summit" on digital signage, there were more than a dozen agencies presenting or in attendance. And, last week, we saw EnQii declare itself in the "agency business" along with MediaTile's announcement of its agency content training program and the Ad Council's new clearing house for public service announcements (PSAs) for digital signage at PSAcasting.org. Companies such as SeeSaw Networks and Adcentricity continue to capture large gains on the agency side by capturing budgets for aggregated networks.

The real proof point? TV upfronts are down. Barclays Capital predicted in April that upfront spending would decline 15 percent from 2008 to $7.4 billion. In the UK, advertising revenues to the television companies are forecast to be 14 percent lower this year than in 2008. Newspapers are off 28 percent in the United States and digital signage network ad sales are up as much as 40 percent for a number of networks, and some are folding.

Trend #4 Brands are shifting money to this market from traditional TV

Major brands are moving into the market, right now. Once traditional TV viewership declined, they began looking for more effective messaging. This trend began last year when a few brands bypassed their agencies and began experimenting directly with DOOH. Building brand networks in-store at the shelf is a critical part of this strategy. For brands to survive and retain customers, they must spend money at the point of sale, or risk losing customers to generic brands. Once lost, a customer is tough to win back — and expensive. This trend will grow geometrically as sales become hotly contested.

For brands, the real proof points are scattered around the world, in retail outlets, stores, chains and other locations. More and more we see brand displays incorporating digital signage networks and their own brand TV-like channels at the shelf. Samsung is an example of a brand sold on DOOH, and their recent new product launch campaign was 95 percent comprised of DOOH media. The results were "fantastic," according to Rob Gorrie of Adcentricity. These are real proof points that will drive brands and their agencies to digital signage buys. The trend of reallocating budgets from TV to the shelf and DOOH networks is progressing. (Budgets are also coming from traditional POP.) Major players are spending aggressively now to maximize their ad dollars and protect their brands.

Trend #5 Cross-platform and interaction with cell phones is critical

In the past year, blue tooth and text message integration passed its experimental and pilot phases. The connection and symbiotic relationship between display and cell phone will continue to grow with more deployments in 2009. Consumers are ready to utilize this technology today. Personalizing features by offering coupons and other media on handsets will further drive sales at the shelf. Tracking these interactions to measure the success of a network will also play a part in the overall success of the campaign. Digital signage will take a front seat in this area, adding value to the entire digital communications grid.

So far this year we have seen a few outdoor applications involving mobile SMS and digital signage, including OutCast (formerly FuelCast). There are signs of change, however. Danoo is rolling out to 100 locations. "Download rates tend to be below 1 percent online, but we're seeing 3 percent," said Doug Scott, vice president of marketing for Danoo. For those users that set their mobile phones to "discoverable mode," making it easy for them to receive messages, download rates soared to 30 percent. Twitter and tweets are increasingly popular and pervasive, and digital signage vendors are moving quickly to integrate this and other social mediums. At a recent auto show, Volvo used Twitter and brought the results to digital signage. This trend is inclusive of mobile, but with a new Twitter-twist.

Trend #6 Interactivity and measurement

Along with interaction with cell phones, interactive engaging technologies will propel the industry to enhance new consumer experiences, from touchscreens to floor screens, to window touchscreens to gesture-enabled interaction. The engagement of the consumer adds tactile experiences to visual experiences, and helps to create an emotional connection with the brand and product. As was the case with cell phones, 2009 will see more than simple small pilot projects; it will boast large-scale rollouts vying for consumer attention, ramped up to unprecedented levels. Measurement proves the maturity of the industry and is key in 2009. Data collected from interactive solutions and delivered upstream will give DOOH another powerful asset in the form of market intelligence and direct consumer feedback, for marketers and agencies to measure the success of their campaigns.

Here, we have seen impressive rollouts (over 300 in some cases) involving touchscreens across retail with brands. Touchscreen interactivity is being used for Touch Tune's and Ecast's networks in bars using jukeboxes. We have seen some very cool gesture-enabled interactions. However, this has not reached scale as of mid-year. I expect more to come from this very exciting area for digital signage in the remainder of 2009 and 2010.

Trend #7 Data-driven content or ad search for DOOH

As an increasing number of large networks emerge online, and the number of displays grows geometrically, creation of individual playlists that are relevant to a specific display and associated audience will become a thing of the past. Just as with Internet search engines, metadata for content and screens will ultimately be matched for the right time, place, target and behavioral attitudes. This will allow access to databases that have ad content and remove the complexities from decision-making focused upon when, where and why. This will establish the industry as leading edge, not trailing edge.

Technology is definitely starting to conquer this opportunity and there are a few companies doing something about it. The real question is when the software is in place, how will content be created, tagged and placed on the network? I expect to see content created in a more layered fashion, and digital assets locally assembled in more automated ways.

Trend #8 Cost of LCD and players is entering next phase of cost down

LCD's are declining in price and have been for the past six years. This is a trend which will continue. Innovations on the media player side will also bring pricing down. Quality is still a significant factor, and will be critical in keeping networks up and operational 24/7. Declining cost is not a substitute for reliable and scalable technology. Total investment and ROI still require a quality platform.

Clearly, overall costs are coming down…but right now, LCD pricing is slightly on the rise.

Trend #9 Consolidation and failures will continue

In these unprecedented economic conditions there will be failures and consolidations in 2009. This is both good for the industry and bad. Though we may see failures undermining the integrity of the industry, the pieces will be picked up and business models changed to improve the industry overall in 2009; the prevailing economic situation will simply accelerate this evolutionary process. There will be success for companies that are established, have good business models and have the cash flow to endure. 2010 will be the year of winners in the end game, where a few companies dominate the market.

The industry is in a state of contradiction, enduring some layoffs and failures, while at the same time supporting large-scale rolls-out and awarded contracts. The industry is defying economic gravity in terms of growth, but there are simply too many companies competing for business, with even more entering the space from outside. I am still of the mind that the industry is headed for increasing consolidation.

Trend #10 Growth for the industry is positive

Notwithstanding my previous comments, industry growth will be moderate. Digital signage networks have the opportunity to reduce costs, save resources and communicate powerful messages. These are attributes that will spur continued growth as companies worldwide re-evaluate every element of their communication plans. Looking closely at the models and businesses that benefit by taking advantage of digital signage technology will be the key. Making the case to use digital signage is our job as an industry, and this will be yet another year of growth.

Sales are up compared to 2008. I continue to see the growth despite the contrast of failures. This is a common theme in an industry that is on its way.

Trend #11 The print industry seeks digital

This is a new prediction, and one of importance. I have seen several news items that indicate this as a viable trend. The first example: a deal between Fast Signs and Scala. Here, a traditional sign company is looking to capitalize on the overall success of digital signage. As with all acquisitions, this will require a fair amount of training for internal employees to overcome a significant learning curve. Another interesting and recently announced "print-related" deal comes out of Canada: ICON Print's (a large-format printer for environmental graphics, retail POP, grand format outdoor banners, vehicle graphics and fabric printing) acquisition of GridCast, a digital signage integrator.