The Digital Signage Insider
WireSpring's blog featuring tips and analysis from a team of industry experts

Digital Signage Market Faces ROI, Cooperation Challenges: Survey

Author: Bill Gerba on 2009-06-30 10:39:19

In early May, I asked the readers of this blog to fill out a short survey designed to get a high-level snapshot of the digital signage market. There are lots of deals going on right now, and more companies than ever are doing good, solid work on projects ranging from run-of-the-mill to truly unique. For all those who finally 'get it,' though, there are still plenty who don't, and it's those people and companies that we all need to help educate. I won't pretend that my little 8-question survey (9 if you include email address) is going to miraculously identify and solve every unique question and issue out there. But once you see some of the results outlined below, I think you'll agree that some of us were not asking the right questions to begin with. And many of us probably had a mistaken impression of what the industry's strengths, weaknesses and primary challenges actually look like.

Who responded to the survey?

When the survey closed at the end of May, we had collected 145 results. This is a large enough number to draw conclusions from, but still smaller than I had hoped for. About half of the responses came from inside the US. The other half came from abroad, lead by Canada, the UK and the Czech Republic. Lots of people selectively answered the questions, choosing to leave out some of the open-ended ones (which was expected). But as you'll see, the long form questions provided some very interesting insights that we might have missed if we had limited the survey to simple Yes/No or A/B/C/D questions. Respondents were a good mix of people, with the bulk still being either digital signage vendors or network owners/operators. However, content providers and agencies made strong showings as well:

Answer	Percent
Digital signage services company (hardware, software, services, consulting)	38.7%
Digital signage network operator	19.4%
Advertising/marketing agency	13.7%
Content production company	9.7%
PR/communications agency	2.4%
Venue owner (retailer, hospital, bank, etc.)	2.4%
Other answer	13.7%

What's the biggest challenge facing digital signage right now?

To me, the most surprising and illustrative responses came from the very first question: "What do you think is the biggest challenge behind buying/selling digital signage today?" When I've asked this question in the past, the answer has invariably been "it costs too much." But today's digital signage experts think differently:

Answer	Percent
Too hard to explain the value	34%
Requires too much cooperation between different disciplines/departments/people	27.7%
Still too expensive	18.4%
Too hard to keep the signs "fresh" with new content	8.5%
Too technically complicated	4.3%
Other answer	7.1%

The most popular write-in option was the difficulty of determining ROI. In my opinion, this is the same as "too hard to explain the value". Maybe I should have said "too hard to quantify the value" instead. Regardless, the key takeaway here is that while the cost of implementing digital signage has plummeted in recent years, as an industry we still have a hard time answering the question "but what does it do?" That's a big problem, since more and more screens are being deployed every day (fueled by hype and decreasing prices). That means that more and more screens will be missing their targets (in terms of ROI or other metrics) and probably getting hung up on the same problems that we've been facing for a decade or more now.

I was also pleased (though not surprised) to see the answer "Requires too much cooperation between different disciplines/departments/people" make such a strong showing. This indicates that digital signage has moved out of its old domain of merely being someone's pet project (without proper organizational support) or getting classified as an IT-specific initiative (without involving other departments). It also gives credence to the idea that more mid-size and larger companies are working on digital signage projects. While we've seen plenty of anecdotal evidence of this, it's the kind of "feeling" that's very hard to get real data about.

Who's doing it right and who's doing it wrong?

When it comes to doing it right, retailers lead the way -- nearly a third of respondents indicated that the retail vertical is doing a good job using digital signage. They were followed by travel/transportation hubs (22%), hospitality (17%) and banking/finance (13%). When asked why, most respondents indicated that these types of venues simply lend themselves well to digital signs, and also noted that most of the time, the content running on such screens was reasonably useful or valuable. On the other hand, about a quarter of respondents said that these places simply "had the most screens," so there's probably some psychological chicken-and-egg going on with the responses. In other words, viewers see the most screens in certain types of sites, so perhaps they assume the screens in those venues must be doing well and are delivering value to other viewers.

I'd love to say that those venues selected as doing the worst with digital signage were entirely different than the list above, but the truth is somewhat muddied. In fact, 25% of respondents indicated that the retail sector was doing the worst! Government/public service and education come in a distant second and third, with 15% and 13% disapproval ratings, respectively. I think we're probably seeing that adverse selection problem again: there are simply so many retail screens out there that a good number of them (though not necessarily a big percentage) are bad, which leaves a significant imprint on the viewing public. Likewise, many people may spend more time in retail environments than in government buildings or schools, thus giving them more exposure to retail screens, and thus more opportunity to mentally critique them. The reasons for these bad screens run the gamut. 31% say the messages they show don't add any value to the environment. 18% say the content gets repetitive and/or annoying. Another 18% say the messages aren't on-target with the screens' audiences. And 17% say there are frequently issues with screen placement.

What's the best digital signage installation you've seen?

I was happy to see so many people fill in a response to the question "What's the best digital signage installation that you've seen?" Nearly 100 people answered, and aside from a few self-serving responses, there was a clear trend: people like digital signage in travel/transit venues. Several people cited the Chicago Transit Authority (CTA), the London tube, and numerous airports as locations where they had seen great digital signage. I think it's easy to understand why this might be: these venues have a real need for automatically updating their signage, and visitors to these locations are already trained to look for it. When I'm at an airport, I need to see gate and time information. Likewise at a train or bus station, I want to know when and where my transportation is going to arrive. Viewers are already looking at these screens, and the screens are providing them with real, relevant and valuable information. Toss in a little news and weather and it's even more useful. Mix in some targeted advertising and suddenly you have screens that are genuinely valuable and placed in areas where people are already seeking them out, which is a great deal for all the parties involved -- including the viewers. That's a hard combination to beat.

How can we act on this newfound information?

That's the $64,000 question, isn't it? Let's start with a few key takeaways. First, no matter which market segment you're in, enough people seem to think that there's plenty of room for you to improve. You may only have to win over your particular set of viewers when managing your own network. But when you're out selling new networks and clients, you'll also need to show how much better you are compared to their general perception of a digital signage network. This industry has now existed long enough for people -- important people holding the purse strings, no less -- to form preconceived notions about digital signs. Often, that's a bad thing. Your work needs to be good enough to change that. Second, the above question about the 'best' digital signage installations really highlights the need for utility. Making screens relevant doesn't necessarily mean making the content brighter or prettier (though it can help). Rather, it means providing viewers with the information they already know they want, not just the info you hope they had never thought about before. If you can figure out what your viewers genuinely already want to see on the screen, and put it there in combination with the rest of your content program, you'll go a long way towards winning them over.

What do you think of the survey results? Are the 'best' digital signs really in the travel/transit sector? Have you seen an amazing project that you'd like to tell us about? Leave a comment below and let us know!

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If Microsoft Made 'Office for Advertising', Would Anyone Use It?

Author: Bill Gerba on 2009-06-23 11:31:11

Advertising Age published a story this week about Microsoft's next big foray into the advertising world. Microsoft has owned the popular Atlas sales and planning tool for a while, and they acquired Razorfish to get some real-world agency experience (see our recent interview with Razorfish's Patrick Moorhead). But Microsoft continues to play second fiddle to Google in online advertising. Away from the Internet, the firm's only successful foray into the agency world has been with their standard tool set -- stuff like Office and Exchange. But the 800-lb gorilla of the software industry clearly has their sights set on a successful penetration of the advertising world, both online and off. How do they plan to do it? By doing what they do best, of course. As the firm describes it, they're out to make an Office Suite for Advertising, also known as the "Media Operations Management System".

What would 'Office for Advertising' look like?

For better or for worse (and from my sanity's perspective, for better), I've never worked at an advertising or media planning agency. However, I've worked with plenty of these companies over the years. Looking back at my experiences, I have to imagine that trying to make a single tool that any agency could use interchangeably is going to turn into a giant exercise in futility. The diversity of needs is the real killer here. Think about it: one of the reasons that Microsoft's Word (and all word processors, for that matter) were so successful was because they had a very simple precedent to overturn. Until then (barring expensive typesetting machines), if someone wanted to put type on paper, they used a typewriter. Margins, typefaces and other formatting options were difficult if not impossible to change. Undo involved copious amounts of white out.

There was a clear need for improvement. Luckily for Microsoft and their early competitors, the entire user base was stuck with essentially the same tools, and was thus faced with essentially the same problems. As the publishers of programs like WordPerfect, Ami Pro, and Word would find, simple functionality like "load," "save" and "undo" made the act of typing a document so much better that virtually everyone understood the value of their systems. Over time, as the improvements to these programs became less spectacular and often more esoteric, Microsoft was able to use their monopoly in the operating system market to make themselves the de-facto purveyor of office software too. By then, the notion of using a typewriter to type a document was cute and antiquated -- the kind of thing you might remember from early in your career, or something that your parents did. But it certainly wasn't something you'd do today.

However, the enterprise software space isn't built on common ground. Ask any agency how they bill, or any planner how they allocate funding, and you're going to get a different answer. That's one of the reasons why the ad business software market has room for both boutique companies as well as behemoths like Oracle and SAP. Maybe Microsoft can make a package that will address the needs of 25-30% of the market, which still represents billions of dollars in billings. But by the time each company gets the software set up to meet their unique needs, it'll probably be just as complex as whatever they're currently working with. Cheaper? Maybe. But more efficient? I doubt it. And believe it or not, agencies have the same drive towards efficiency as any other business, so sacrificing productivity to save a few thousand on software will probably not be viable in the long run. Simply put, unless Microsoft can make something so phenomenally awesome that it makes existing companies tailor their business plans to fit the software, their promise of a "Holy Grail for marketers" is hard to believe.

What's the most likely scenario? Elegant, web-based connectors.

Well, if Microsoft says they're making an Office for Advertisers, they're probably going to follow through on that promise. What form the product will take and how functional it will be remains to be seen. In the past, they have needed a good two or three versions before a new product became truly useful. Still, even in a wildly optimistic scenario, it seems unlikely that the firm will be able to move a significant number of clients away from their existing systems. Depending on how they position it, they might have more success on the low-end (where price can play a more powerful role), or maybe they'll start by targeting a specific vertical market. But a panacea for the marketing industry it will not be.

If I had to bet, the next wave of innovation in the ad planning, booking and billing space won't come from a new, monolithic program. Instead, it will emerge from the small connectors that the different vendors will start supplying to allow web-style mashups inside companies, instead of only on the web. These connectors will probably be available for free, and might even be provided in an open source format. IBM, Oracle and SAP already offer some web-based connectors for pulling data in and out of their complex back-office systems, but these are cumbersome and difficult for all but the most experienced engineers to use. The next wave of software connectors will be easier, leveraging accepted web-based metaphors and paradigms. They'll give software developers and even savvy businesspeople the ability to move data from system to system, into and out of documents and spreadsheets, and even between different organizations. We have a lot of data at our fingertips today. But even savvy marketing firms often find that too few people have access to it (because it's hard to get to). And even once you have the data, it's too hard to manipulate in such a way that it actually provides insights.

Luckily, these are the types of problems we can solve with a "wisdom-of-the-crowds" approach, where having lots of people looking at them from different angles can yield significant innovations very quickly. Consequently, I believe that long before Microsoft is able to "solve" the problem of back-office management for the marketing world, we'll see a new level of interoperability between systems and agencies. This will be enabled not by some new, big, enterprise package, but rather by a bunch of little scripts and applications strung together quickly and cheaply -- using old or existing data to solve new problems in new ways.

Is there a software package, feature or service that would make your business life a lot easier? What would it need to do? Leave a comment and let us know!

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Why I'm Really Looking Forward to the InfoComm 2009 Trade Show

Author: Bill Gerba on 2009-06-11 18:14:51

I haven't attended an InfoComm show in a number of years, and WireSpring has never exhibited at one until now. So needless to say, I'm a little anxious and excited about going next week. Adding to the excitement is the fact that I don't have to schlep all the way out to Vegas again, though I'm sure there are plenty of folks who would rather have the chance to catch up with Cirque du Soleil than Mickey and Minnie. But while the InfoComm trade show has been around for a long time, only in the past few years has it become a must-attend event for the digital signage set. Here are some of the reasons why I'm looking forward to InfoComm 2009.

The non-DS exhibitors

I've already seen everything from those folks who first-and-foremost consider themselves to be digital signage solution providers. After all, that's what DSE is for. But InfoComm is much, much larger than DSE. It encompasses a much larger and more varied pool of exhibitors, some of whom we deal with tangentially, but many more of whom we've probably never even heard of before. I've made some great tech/implementation discoveries in the past, often in the no-man's land of the last row of the exhibit hall, where tiny Taiwanese companies sell crazy products that do things you never thought you needed.

It's also fun to see which vendors think digital signage is going to be their big growth area. It breaks my heart to see all those streaming video and teleconference guys hawking slightly-tweaked versions of their hilariously expensive products and expecting to make a big killing in our niche. On second thought, no it doesn't...

The POPAI digital signage standards meeting

As I noted a few weeks ago, the POPAI technical standards group has been making good progress on creating a framework for interoperability between digital signage players, servers, and third party services. We're going to be having a free meeting (open to anyone) on Wednesday, June 17th at 4 pm in room W223A (which is somewhere near Hall D). The first fifteen or so minutes will be spent covering the purpose of the group and what we've done so far. After that, we're breaking into a full-on tech discussion about playlist interoperability.

If you have even the slightest bit of interest in seeing how this whole interoperability thing plays out, I highly suggest you drop in, even if it's just for the first few minutes. We've got a good, active group of people, and so far the representatives from PRN, WireSpring (duh), Scala, Harris, Coolsign and IAdea have confirmed they're showing up. I expect a whole bunch more. And while I don't think the expo center folks will let us have a keg in the room, I promised a few people on last week's call that I'd look into it and see what I can do.

The Strategy Institute conference

This will be the third year that we'll be attending/exhibiting at the Strategy Institute's Digital Signage Technology Summit, which is targeted at exactly the kind of audience that InfoComm typically attracts. The SI conference covers stuff like planning rollouts effectively, using digital signs to find new revenue streams, lower operating costs or improve productivity, and integrating digital signage solutions with other products. We've learned a good deal in the past at this conference, and have made some good connections to boot. If you think you might want to check it out for yourself, be sure to mention the secret code 9015-WS10 to get 10% off of your ticket price when you sign up for the event.

Catching up with y'all

I've met so many people through this blog and related industry happenings that it's getting very difficult to keep up, even with Twitter, LinkedIn and a plethora of other services that promise to keep us connected. It's always great to catch up over lunch, a drink, or even just a quick visit at a booth. While I'll probably be spending part of my time Wednesday at the Strategy Institute conference, I expect to do a good amount of booth sitting at InfoComm, so stop by and see us in booth #1746.

So, those are my plans for InfoComm 2009. What are you looking forward to doing and seeing at the show?

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Is Digital Signage SaaS "Greener" Than Hosting Your Own Server?

Author: Bill Gerba on 2009-06-05 10:02:38

I really don't like cause marketing. Adopting the facade of curing some social ill for the sake of selling product seems crass and opportunistic, which probably explains why I can't sit through more than a few minutes of Extreme Home Makeover without wanting to smack someone. The latest cause craze these days is of course the green-ifying of everything. Marketers are slowly but surely training us to believe that we're evil if our light bulbs and laundry detergent aren't saving the environment somehow, and the trend is growing. While I have absolutely nothing against preserving the environment -- and I'm actually psyched that such a cause is fostering innovation in virtually every industry these days -- I'm getting pretty tired of getting hit over the head with the green bible every time I walk into my local supermarket. Still, I need to take green seriously, since as a digital signage vendor my world revolves around lighting up thousands of LCD, LED and plasma displays. In the past, I've helped a couple of customers do the math to determine their network's total power output and even complete carbon footprint. But the other day I was caught by surprise when someone posed a new question: is software-as-a-service (SaaS) green?

First off, "green" is a pretty relative term when you're talking about lighting up 500W displays all over the place. But the key question, "Does software-as-a-service use more or less power than a self-hosted and locally-managed application delivery" seems valid enough. And certainly my initial guess was "yes, it must be, since there should be fewer computers providing the service." Still, I hadn't done the math, and since the company I was speaking to has a big reputation for taking their projects green, I didn't want to screw up. After spending a little time doing some research and plenty of guesswork, I came up with some not-unbelievable yet not-terribly-satisfying figures that I thought I'd share and get some feedback on.

Assumptions, please

You know what happens when people go assuming, right? They make an ass out of u and Ming (and if Flash Gordon has taught us anything, it's a bad idea to piss off Ming). Unfortunately there's no way that somebody could figure out an industry-wide average for things like server density, utilization ratios and power consumption without making some guesses, so here are mine:

• The average network has 100 nodes (media players) attached. I actually think this is on the high side, with a more realistic estimate being in the 30-40 range, but in this experiment it's more conservative to round up rather than down (you'll see why in a minute).
• It only takes one server to run a 100-node network. That means that everything -- management application, database, connection manager, etc. is running off of the same machine. That seems reasonable for only 100 units.
• The typical self-hosted server draws 300W, and is turned on 24/7. You don't need the beefiest machine in the world to manage a 100 node network, so that seems reasonable.
• The typical SaaS server cluster can manage 2,000 nodes. I'm drawing on personal experience here. If you forget about multi-cluster redundancy for a minute (which seems fair since we haven't figured in redundant servers for the self-hosted option), a "cluster" in my parlance is two servers: an application server and a database server.
• Each SaaS cluster draws 1,000W, and is turned on 24/7.

Using that set of assumptions (which I expect I'll be told are wrong), we can develop this simple table of efficiencies:



So, based on the math above, a SaaS infrastructure may be six times as efficient as a self-hosted infrastructure on a watts-per-unit basis.

It's all about density, baby

There are plenty of places to take a wrong turn above, and since a good chunk of my company's revenues come from providing digital signage SaaS solutions, I thought it prudent to point out just how far off-the-mark the above calculations could be if we vary the assumptions a bit. The key is server density -- how many nodes you can manage on a single machine (or cluster) without it going up in smoke. I think my estimates for server wattage and the nodes/cluster for SaaS are pretty accurate, since those are all things I have first-hand experience with. But when it comes to the total number of nodes managed on a given server, as I noted above, my estimate's as good as the next guy's. Look what happens when you vary that number:



So you can see that at higher numbers, the efficiency of a self-host solution starts to approach that of a well-utilized SaaS cluster (assuming you can cram the management of 500 nodes onto a single low-power server) . Likewise, underutilized SaaS clusters, because of their high base power requirements, rate low for power efficiency -- a SaaS cluster managing only 400 nodes (i.e. a few small customers) isn't much better off than a customer hosting their own server for 100 nodes.

What are the real-world implications of this?

Going back to our original set of assumptions, let's add in some data from iSuppli that shows that 758,000 nodes of digital signage were deployed to the retail sector in 2008. This total would require either 7,580 individual servers each managing 100 nodes (for a total power draw of 2,274 KW), or 379 hypothetical SaaS clusters (which would draw only 379 KW). To put that in perspective, the difference is enough to power about 1,500 homes. If iSuppli's projections are accurate and we see the market size triple to 2.5M nodes in 2013, the consumption differences and savings would roughly triple as well.

Ultimately, the difference simply isn't that large, especially when you consider that those same hundred screens requiring a 300W server are each drawing 200-300W themselves. So at this point, I'd be willing to say that when it comes to digital signage, a well-managed SaaS infrastructure is likely to be more electricity-efficient than a typical self-hosted solution. However, the difference is fairly modest, varies from network to network, and is certainly not something I'll be putting into my sales pitch any time in the near future :)

When it comes to digital signage, how important do you think it is to be green?

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Got a Question for the Head Honchos at Disney, J&J or Walmart?

Author: Bill Gerba on 2009-05-28 12:23:10

A few weeks ago, I received a phone call that surprised and delighted me. Dick Blatt, the President of POPAI, called to ask that I join the organization's board of directors. Eager to agree, I first checked around with my partners to ensure the additional load wouldn't saddle them with even more insane amounts of work than they currently manage. Once that was settled, the choice to participate was pretty easy. Why? Well, it's not every day that you get to rub shoulders with top marketing brass from brands like Disney and Johnson & Johnson, or retailers like Walmart. But those are precisely the kinds of people who will be attending the thrice-yearly board meetings held around the country. While I have some idea of the kinds of issues I'd like to raise and questions I hope to get answered, I know this blog has a large, lively and often opinionated audience. So, I thought I'd check with you folks to see if there are any burning questions or concerns that you'd like me to bring up in casual conversation.

What does the board do?

Beats me. No, seriously, I haven't gotten the agenda for next week's meeting yet (it usually goes out a few days before). Most likely, the issues will focus on the policy and direction that POPAI and its chapters will take on all sorts of subjects relevant to the retail, merchandising and point-of-purchase advertising industries. Since POPAI has shown its intent to expand its role in the digital signage industry via its support of our digital signage standards effort and other issues like advocacy and even in-store privacy, I expect to be representing the needs and concerns of our industry in front of the other (far more savvy) members of the panel. Thankfully, I won't be our lone representative. Scala's Jeff Porter has been on the board for several years now, and hopefully the presence of two of us will prove so formidable and overwhelming that the rest of the group will immediately agree with our every initiative.

Ok, that's not too likely. And like I said, there's already an agenda. But there will be opportunities to raise new, relevant points, promote our industry's perspective, and otherwise schmooze with some of the people that a lot of us would love to work with, or at least cite to the awe and amazement of colleagues.

What kind of things should we talk about?

I'm still collecting and reading through the results of our latest reader poll, which ends on May 31. If you or someone you know hasn't taken the survey yet, please fill out the survey now -- it should take you less than three minutes. While I'll do a full analysis of the results in another few weeks, one thing I can tell you is that cost no longer appears to be the major sticking point for a lot of projects. No, the number one concern of respondents was that digital signage projects require too much interdepartmental communication and sign-off. Still lacking a place in most companies' formal advertising, merchandising, sales and even IT agendas, a lot of us find ourselves having to orchestrate major multidisciplinary efforts to get a project planned, let alone deployed. Whether this means everyone wants to take ownership or (just as frequently) no one does, it's a major problem for a lot of larger deployments. Hopefully this is something that my fellow board members will have some insights on.

But that's just one item I want to bring up, and certainly there are many others. As I mentioned at the start of this post, I know a lot of folks out there can suggest more important (or more pressing) things to call attention to. So, where should I start?

If you could have the marketing execs at companies like Disney, J&J and Walmart answer any question you like, what would your question be?

I'll select the best questions from the list and try to get them answered next week.

PS: As of this writing, POPAI's board of directors page had me listed as being the EVP/Creative Director at Leo Burnett. While that certainly would be a fun change of pace, it's definitely a typo. They should be correcting that shortly.

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