Digital Signage Insider Blog

Is Now a Good Time to Start a Digital Signage Company?

Bill Gerba

I don't know why so many of the titles for my blog articles are written in the form of a question. I know it's a horrible Internet cliche, but sometimes I just can't help myself. Anyhow, the reason I ask the above question is because a couple of years ago, as the economy really started to sputter, we wrote an article about digital signage "safe havens". While nothing is truly safe (in our industry or any other), we tried to identify areas that might be a little more immune to poor economic conditions than others. Since then, the economy has improved some, and we've learned a few new things about the business side of digital signage. More importantly, people have been coming out of the woodwork asking whether they should dive into the product/services/network end of the digital signage industry. I started to wonder about that myself, and came to the conclusion that while there are still a lot of good opportunities to pursue in the digital signage space, there are certain places where we as an industry have already missed the boat.

Looking back, how did our predictions fare?

Back in 2008, we identified four areas where we thought digital signage networks could continue to grow despite the near-universal instinct of every company to pull back, dig in and hunker down. Specifically, we suggested looking at:

Image credit: John Martinez Pavliga on Flickr

Small networks. At the time we said, "We've seen strong and accelerating growth for networks with less than 25 unique channels of content (typically spanning less than 25 venues), and we expect this trend to continue well into the future. VARs like them because they have a lot of clients that fit that profile. Angel investors like them because they can fully fund them out of pocket. And entrepreneurs like them because they're manageable with a small team, for less money. And heck, there are just a lot of places where you can put 25 or fewer screens, period." This prediction has definitely held true from my perspective, and small networks continue to get funded (usually internally) and deployed. The one exception is probably small-scale advertising networks, which never made a whole lot of sense to me to begin with (though there are exceptions). This is probably because, as we've started to muse, DOOH networks need front-loaded scale to survive.

New screens on existing properties. At the time we said, "[We're] seeing a lot of opportunities to attach digital signs to existing real-world properties like ATMs, kiosks and even heart defibrillators. This makes sense, since all of those things require similar infrastructure to digital signs (i.e. power, Internet connectivity, etc.), and their owners are now looking for more ways to generate revenue from their existing investment." Today the "Internet of things" is bigger and more interconnected than ever, but M2M and digital signage are anything but merged. The natural progression of things seems to suggest that one day digital signage management and M2M device management should be the same, but we're not there yet. It also doesn't help that M2M deployments tend to be very large and very, very cost-conscious.

Non-advertising networks. At the time we said, "PQ Media indicated [in 2007] that non-advertising networks are being installed faster than advertising networks. New objectives and innovative business models are allowing these networks to skirt tough questions about ad sales and efficacy in order to focus on goals that aren't directly tied to filling advertising space." Advertising networks continue to be a tough sell -- not much has changed there. That doesn't seem to have deterred many entrepreneurs, though my general feeling is that the number of proposed large-scale DOOH networks has declined in the past few years. However, when you look at the number of screens devoted to advertising compared to the number of screens used for other purposes (corporate communications, digital menuboards, whatever), it quickly becomes apparent that these low-key installations greatly outnumber their DOOH cousins.

Non-retail networks. At the time we said, "Retailers may lose their taste for spending money after the [2008 holiday season] if sales aren't good (and they're not looking too great right now). But growth in other sectors -- particularly health care and corporate communications -- remains strong." I think even just 4 years ago, most retail networks were heavily advertising-funded. Today that's not really true anymore. While there are still plenty of examples of retail screens used for advertising purposes, many more have been deployed for merchandising and general purpose messaging.

Where have we missed the boat?

One thing that has changed A LOT since 2008 is the emergence of smartphones. Today about 50% of mobile phone users own smartphones, many of which have as much processing power and as many pixels as a typical digital sign. Unlike a digital sign, though, the smartphone owner is able to decide exactly what they want to see, what kind of media they want to consume, and when and how they should be exposed to it. Consequently, networks that depended on a lot of "ancillary" engagement without offering much additional benefit are finding themselves more or less out of an audience. Bar and restaurant networks, waiting room networks and public space networks have all felt this pinch. And while some have taken steps to add relevancy through shared social games and the like, many have already succumbed to the "fourth screen." All I know is that if I were asked to fund a digital signage network in a public space, my first question would be "so what's the social angle?" That would probably be my second and third questions as well.

What about advertising?

Well, the good news is, advertisers really like having total control over their media, so the ability to precisely manage exactly what shows up on digital signage networks is still going in our favor. Unfortunately, they also like it when people actually look at the aforementioned media, so digital signs will no doubt suffer some smartphone envy. To me, the play going forward will be pushing solutions where digital signs can be used to enhance a viewer's experience, even if they're using their smartphone. This might be through some kind of interactive content that provides some social context or even the ability to unlock additional access, features or promotions (based on the type of location). For example, imagine using your phone to interact with the pre-roll loop at a movie theater so that you and your friends in the audience could vote on the content you wanted to see.

From a network perspective, we'll still walk the line between broadcast and "true" 1:1 narrowcast. But with clever programming, we can also serve as a bridge between the two, and maybe give advertisers the best of both worlds in the process.

Has the digital signage industry done a good job at spotting and pursuing new market opportunities, or have we missed out on some obvious uses for our products? Leave a comment and let us know what you think.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Why Do So Many Digital Signage Projects Fail? A Fresh Look

Bill Gerba

About five years ago, we wrote an article called "5 crucial steps that can make or break your digital signage project," which in turn inspired another article called "Why do so many digital signage projects fail?" You see, back in '07 and '08, a staggering number of projects started and stopped as the industry hype machine pumped up digital signage as the next big thing in advertising. So as I reviewed these articles recently, I wondered whether our old advice still held true, and whether today's digital signage companies were as prone to failure as those of old.

Which things made a difference last time?

In short, after reviewing thousands of leads and asking those companies what became of their projects (regardless of whether we wound up working with the folks or not), we found that there were really only 5 major areas separating those companies that succeeded from those who did not. They were:

1. Know your business model

In 2007 we said, "the big winners in our data set either had a very unique spin on a particular revenue model, or virtually flawless execution on a "standard" model. While I wish I could say we're at the point where we can hear an idea and give you a thumbs up or thumbs down based on how good it "sounds," just having a solid model isn't good enough." A 2012 review affirms that having a solid business model, preferably complete with written plan, is still essential. This is probably because, as we've seen, the typical DOOH network needs to plan for and fund a certain amount of front-loaded scale in order to tip the break-even equation in its favor.

2. Understand your goals

Image credit: Eran Sandler on Flickr

As noted in 2007, I'm still not really satisfied with the phrase "understand your goals," since what we're trying to capture from the data here includes media consumption measurement, sales goals, growth goals, follow-on funding goals, and a whole host of other measurement-related things that, while inexorably tied to one another, require complex, interdisciplinary teamwork, careful planning, and fastidious, ongoing oversight. Suffice it to say that companies that don't set meaningful goals at every step of their growth seem to have a very hard time accomplishing anything, regardless of whether they're a three man startup installing a 20 screen pilot, or a Fortune 500 company working on a much larger project.

3. Build a solid team

Back in 2007, we began by saying that, "if this list were in order of importance, this item would almost certainly be #1". Interestingly, the digital signage ecosystem has evolved quite a bit in the past 5 years, to the point where this might not be the case anymore. Indeed, there are true, bona fide experts available to handle so much of your project now -- from content strategy to finance to network management -- that it might actually make more sense to keep your core group small and outsource everything else. However, there are still a fair number of companies who seem to ignore their core competencies and try to do all the wrong things in-house. As we observed in 2007:

We've had IT firms that want to sell ads. Agencies that want to install networks. Content production studios that want to do infrastructure management. And all the while they think that they can handle it all, and partnering/outsourcing is for wimps. At least, that's what I'd have to guess when looking at (a) the number of companies that were handling at least one part of a project that was clearly outside of their operational expertise, and (b) the percentage of those companies that never got a project off the ground or failed within nine months.

Yup. Still true today. Sigh.

4. Avoid common pitfalls

Back in early 2007, we noticed that more of our conversations actually began to feature customers/prospects/interested parties, "articulating (to some extent) what they thought their problems were likely to be, and how to mitigate them. It could be that we simply didn't take such good notes prior to that point, but my wholly-unscientific feeling is that enough people "got it" now to avoid common planning, budgeting and deployment problems." In 2012, I'm less sure, and I'll say this again when we talk about #5 below. I expect this is partly because things that appear obvious to those of us who have spent far too much time in the digital signage industry are in fact not apparent to those new to the industry, and partly because some people never learn.

5. Learn from past mistakes

In 2007, we were pleased and surprised to find that folks in the industry had started talking to each other, and it became fashionable to cite industry references when talking about why they will succeed when others have failed. And for a while, I was optimistic that the mistakes of the past might not be repeated quite so frequently. Unfortunately, with another 5 years of perspective, I no longer think this is the case. In fact, if you just take a look at our M&A lists for 2008-2010 and 2011, it's clear that there are quite a few failed or mediocre exits to go along with the more successful ones. And while that in and of itself isn't surprising (many more companies fail than succeed in a typical industry), when you take a look at the reasons for many of these failures, you'll see that indeed the management teams frequently repeated the same old mistakes of the past.

All that said, there are clearly plenty of other reasons why a network or project might succeed or fail. A key stakeholder might leave. Motivations and goals might change mid-way through the project. Prosperous networks might even be overtaken by upstart competitors promising better deals. But while understanding the above list isn't enough to guarantee you'll succeed, it is definitely necessary if you want to avoid failure.

Have digital signage companies gotten more savvy during the last 5 years, or are we all still spinning our wheels? Leave a comment and let us know.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Digital Signage Sentiment Index for Q2 2012: Continued Optimism

Bill Gerba

Last week, we asked for your help assessing the health of the digital signage industry. A few days and about a hundred survey responses later, it appears we have at least a small reason to celebrate: industry suppliers and participants indicate that the industry has grown a bit, and some (very) preliminary data shows that the estimates and forecasts supplied by last quarter's survey takers might actually turn out to be pretty accurate. If you recall, in the Digital Signage Sentiment Index for Q1, just over half of respondents felt that Q1 2012 would be stronger than Q4 2011. About 30% expected modest growth of 1-20%, though about 11% expected to see growth of 40% or more. When asked to prognosticate about this quarter (Q2 2012), 75% expected additional growth, with 10% predicting growth in excess of 40%. Let's take a look at the latest numbers and see how things stack up.

So, how was Q1, and how are people feeling about Q2 and beyond?

To begin with, here are the charts for this quarter's Digital Signage Sentiment Index:

As you can see, just as before the majority of respondents are digital signage service providers, with a mix of network owner/operators, agencies, venue owners and others making up the rest. From there, the results change a bit. Whereas most respondents last quarter felt that business was "about flat", this quarter more of them suggested things were picking up, with about 27% saying it's up 11-20%, and another 25% or so saying it's up 1-10%. Last quarter's respondents were more unevenly optimistic about the future, though: a bunch (about 10%) thought they'd see a 40% increase in the coming months, which kind of offset the less optimistic folks who expected smaller gains and even (gasp) some declines. This time around, expectations were more evenly distributed. While there's still plenty of optimism, it's now more universal and also more conservative: 30% expect to see growth of 1-10% in the coming months, and another 27% expect growth of 11-20%. Rounding things out, about 11% expect growth of 21-30%, about 8% expect growth of 31-40%, and just 3% expect growth of 41% or more. For all that, though, the average growth forecast for next quarter is almost exactly the same as it was last quarter -- almost exactly 10%.

Setting a trend

One of the interesting things about a survey like this is that we can start to put together solid trend data in a fairly short amount of time. Consider the chart below: right now it doesn't have a whole lot of data, but what's there is encouraging:

Actual performance numbers are already sticking pretty close to forecast numbers, and as time goes forward, that will hopefully continue. But even if it doesn't, plotting the actual versus estimated numbers should help to keep us honest. At some point, we can probably even combine this data with our meta-analysis of digital signage market statistics from some of the major research firms to see if our informal study agrees or disagrees with what the big boys say.

Last but not least, a few caveats

No analysis that I turn out would be complete without its own list of faults and shortcomings, and this one is no exception. Most notably, we got fewer results for this survey than our last one -- only 97 in total. While this should still be large enough to yield some statistically significant results, it highlights a couple of problems we've encountered, some significant and some less so. First off, after publishing the survey last week, I tweeted the wrong link, so a whole bunch of people got sent to a completely unrelated page. Second, I expect we're starting to see a bit of survey fatigue: we've been doing a lot of surveys lately, and I think people are just getting tired of them, since we tend to hit the same pool of potential survey takers over and over and over. Finally, and perhaps most importantly, we're probably starting to see the beginnings of an adverse selection problem with our Digital Signage Sentiment Index. People want to say things are good because they fear negativity might deter future clients. Consequently, those who might have something bad to say probably prefer to say nothing at all, even anonymously, so we're just left with the industry boosters.

Despite these problems, I think this quarter's results already start to demonstrate the usefulness of this type of simple, periodic industry survey. That said, I'd love to hear any feedback you might have for improving these results or tracking other important industry metrics. As always, leave a comment or send me an email to share your thoughts.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Survey: Updating the Digital Signage Sentiment Index

Bill Gerba

A few months ago we analyzed whether the big research firms have been under- or over-estimating the size of the digital signage market (short answer: they've been underestimating so far, but may be overestimating going forward). In that same post, we introduced a short new survey called the Digital Signage Sentiment Index, which aims to gauge -- as transparently as possible -- how the industry itself thinks it's doing. About three months have gone by since we published the results of that first survey, so today we'd like to poll you all again and add a second data point to our index.

What did the first Digital Signage Sentiment Index tell us?

As we analyzed the Digital Signage Sentiment Index for Q1, we learned that the majority of our 155 respondents were digital signage services companies or network operators. Just over half felt that Q1 2012 would be stronger than Q4 2011. About 30% expected modest growth of 1-20%, while about 11% expected to see growth of 40% or more -- I can't wait to see if that pans out in this survey! Additionally, 75% of respondents felt that growth would continue through this quarter (Q2 2012), with 10% predicting growth in excess of 40%. In both cases, those who didn't expect to grow much expected to stay mostly stable, with only 9% expecting a decline in Q1 and a bit less than 10% expecting a decline in Q2.

Please take the Q2 survey!

Help us find out if any of the Q1 survey's predictions came to pass. At only 3 questions long, this survey should be very quick to complete, and will hopefully serve as a barometer for the industry -- as well as a source of historical data.

If you're reading this article in a web browser, the survey should appear below. If you don't see it, simply click this link to take the survey.

We'll publish the results in the next week or so (along with our first set of trend data comparing this quarter's results against last quarter's), and will continue running follow-up surveys throughout the year. With this information in hand, we should be able to gauge the level of industry optimism at any given time, and see how the current levels compare to how we've felt in the past.

Do you regularly purchase industry research reports, or do you rely primarily on free data sources? Leave a comment and let us know!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

If Costs Keep Dropping, Why Do So Many DOOH Startups Fail?

Bill Gerba

As Michael Arnett pointed out last week, the digital signage industry seems to attract a disproportionate number of starry-eyed entrepreneurs. Usually fueled more by hopes and dreams than by data or common sense, these folks typically just spin their wheels for a while trying to get a project off the ground before moving on to greener pastures. But in my 12 years in the biz, I've seen a decent number actually succeed at getting some screens deployed and operated, even if for only a little while. Then, inevitably, those screens go dark as their implausible business models fail to perform and equity capital dries up. With their revenue gone, I then have to work a little bit harder to replace it, or else risk stagnation (or, dare I say it, decline). Consequently, trying to figure out why so many DOOH startups fail is something of an obsession of mine. In today's guess, I'm going to invoke everybody's favorite power law: the long tail.

A quick refresher on the long tail

I'm sure you've heard of the long tail, right? It's the probabilistic distribution pattern characterized by a "big head," or large cluster of results at the beginning, which quickly declines into a "long tail". The neat thing about a long tail distribution is that even though the tail part may seem small, it can extend out so far that the number of results in the tail-end typically exceeds the number in the much larger-looking head end. As usual, Wikipedia does a good job of illustrating this:

In this graph, the areas of both the green "head" end and yellow "tail" end are equal. However, the tail may extend out a considerable ways, and thus could potentially be much, much larger.

The long tail was most famously used to describe the business practices of companies like Amazon and Netflix when they first began. Unlike their brick-and-mortar counterparts (e.g. Barnes and Noble and Blockbuster Video), both companies didn't have to own, operate and maintain real-world retail presences. They were (and are) just giant warehouses with fancy e-commerce front ends. So while Barnes and Noble and Blockbuster have limited retail space to work with and can thus only stock a limited number of items, Amazon and Netflix don't effectively have that barrier. Consequently, they can maintain much, much larger inventories pretty cheaply. At the same time, their business models allow for selling both large quantities of popular "big head" items (where they compete against their brick-and-mortar counterparts), but also small quantities of a very large group of less popular items (where they effectively have no brick-and-mortar competitors, because nobody could afford to stock so many unique items in a retail space).

What on earth does any of this have to do with digital signage?

In a nutshell, it appears that the historical digital signage adoption rate has been driven largely by price. Mapping the price trends from our digital signage pricing articles against the data from our meta-analysis of digital signage market size reveals a pretty clear relationship:

So, as prices go down, we see more screens deployed. That makes sense, right? Right. The interesting thing is that for most deployments, the costs are spread out in a long tail fashion. Take a look at any of our previous pricing guides and you'll see the "big head" where the initial capex takes place (notably, buying the screen, media player, etc. and getting it all installed). But there's a long tail portion after that, consisting of creating content, doing the scheduling, handling maintenance tasks and the like. Our most recent data illustrates that on a month-to-month basis, operating expenses are over six times the size of amortized capital expenses. Even going back to the 2010 data (which suggested more modest staffing requirements), opex was about four times the size of amortized capex. And the longer a network runs, the larger its long tail costs are (but this is true for nearly any operating business, of course).

All of this furthers the point we tried to make a few weeks ago in our post about front-loaded scale. In that article, we came to the conclusion that most of the networks that have failed probably did so because entrepreneur and funding source alike misunderstood the true funding requirements of the network -- and more importantly, how those requirements scale up with network growth. You see, the cost of operating a network never goes away, but as we saw in that article, it also doesn't scale linearly with network size. So while running a 100 screen DOOH network might cost $X, running a 1,000 screen network isn't going to cost $10X -- it will probably be more like $2-5X. However, the 1,000 screen network has far better odds of succeeding because of how the larger scale affects ad sales, as described in our earlier article.

The moral of the story is this: If you're planning to fund or operate a network, allocate more funding for operations than for capital expenses. Failing to do so seems to be a pretty great way of assuring your network's demise.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Separating the Dreamers from the Realists

Bill Gerba

Intro from Bill: I had a chance to grab dinner with Michael Arnett after the close of the Digital Signage Expo last month. For those of you who don't know him, Michael has been around this industry for a long time, starting as the digital signage sales manager for Matrox -- back when they were highly focused on the digital signage market. Like two old curmudgeons sitting on a park bench, we spent a good two hours trading stories about ridiculous projects, unrealistic customers and impossible technologies. You know the sort. Heck, if you've spent more than a few minutes in the digital signage industry, then you probably already have plenty of similar stories of your own.

It was this sort of shared schadenfreude that ultimately compelled Michael to write this article. Well, that, and the opportunity to plug his new consulting gig, no doubt. But I think what follows will resonate with plenty of people who have ever spent time in our industry. Without further ado, I'll pass the microphone over to Michael:

Image credit: gfpeck on Flickr

If you've dealt with customers in the digital signage space as a supplier/vendor/solutions provider, chances are you've come across them. They're excited. They think big. They live large. They love talking about ROI. They're your next big meal ticket, they say, and they're counting on you to take them into the stratosphere.

"They" are the dreamers, the ones who are just as likely to invest in get-rich-quick infomercial packages as they are to conjure up self-funded, self-sustaining, high-volume digital signage networks without thinking things through. And despite more knowledge, more education, and more competition than ever before, they still loom, hoping to land a big money fish without a rod.

Some are easy to spot from a mile away. Others are wearing sunglasses, hiding somewhat in disguise under their chosen entrepreneurial hat of the day.

Nevertheless, they usually begin with an e-mail describing some big opportunity that needs immediate attention. The email quickly graduates to a phone call (or calls), where we start to see some of the telltale signs -- high volume rollouts. Rushed timeframes, usually in the next 6 months. No visibility with decision makers. No relevant experience. Ad-funded, without advertisers lined up or even made aware. Content as an afterthought. Funding ambiguous at best. Locations non-existent, but on radar through forthcoming sales pitches and expansion plans. Lead with price and the rest doesn't matter. Support to come from partners who haven't been contacted yet. And so on.

It's easy to know when to say no and simply move on when it's obvious that any of your time invested will yield a giant goose egg as your revenue.

But it's not always plain as day. Sometimes there's some merit to what you might think is a dreamer's Hail Mary approach, usually through a personal connection, inside information or indirect business parallel. To help weed them out from the realists -- on the most basic level, those who have numbers, timeframes and a story that make sense -- consider exploring:

His background, and why he chose to contact you
Where he got his information and what he knows
Why he thinks he'll win the business
Whether there is C-level sponsorship
Where the financing is coming from
What he needs from you to secure the business
How receptive he is to your experienced suggestions
Who else is competing to get the business
Whether there is an incumbent, and if so, why they might lose the business
If it might go to bid

It's never a good idea to turn away business prospects, so respectful diligence through the usual sales qualification questions is always a must. It goes without saying, however, that it's always a good idea to protect your company's valuable time and resources. To that end, I've put together a little digital signage project reality checklist (PDF download) to help companies evaluate new prospects.

Over dinner with a successful industry executive at DSE, we were swapping stories about how, rare as it may be, a couple of the larger deals we've seen stemmed from small business folks outside digital signage who were simply in the know, at the right place, and right time. Just as it is in the real world, people know people, and DS is "know" different.

Michael Arnett is an independent consultant focusing on sales and business development within the digital signage space. His company, Aurora Dynamic, is based in Montreal. (Aurora Dynamic is not affiliated with WireSpring.)

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Use of Custom Video Shrinks in DOOH Content Mix: Survey

Bill Gerba

Finishing up this year's analysis of digital signage pricing, we'll take a moment to look at content production options and costs, and how (or if) they've changed since last year. Starting with our 2010 survey, we added a few questions about content to get some baseline data on what people are displaying on their digital signs. This meant that last year, we were finally able to verify that, not surprisingly, virtually everybody runs some kind of video on their screens -- along with still images, dynamic HTML templates, and, yes, Flash. Will this year's results highlight any new trends from the content production industry? Has the DOOH content mix changed at all in the past 12 months? Let's dive into the data and find out.

What kinds of content do people run on their screens?

While the content mix remains as varied as last year, one pretty amazing change is the decline of screens using custom full motion video. Whereas last year over 16% of respondents reported using custom video exclusively, with another 60% or so reporting they used it frequently, this year only 10% reported using custom video exclusively, with just over 50% reporting they used it frequently. Between the two numbers, that's about a 16 percentage point decrease in custom video use, which seems pretty remarkable to me. Meanwhile, custom image use is up a bit, as is dynamic template use. Thankfully, dynamic ticker use is down.

How much does all this content cost?

One thing we haven't done is a formal analysis of content production costs, partly because it's a giant pain to get arbitrary quotes for imaginary projects, but mostly because we work with so many content production companies that I really don't feel comfortable declaring what content "should" cost, as much of it is very subjective.

That said, during a review of last year's article I did notice a comment from Jim Hickman at a company called VideoBillboard.net (which produces content for digital signage networks), where he explained:

When you speak of digital signage content, our company has some experience designing effective creative messages. Over the past 10 years we have created hundreds and hundreds of custom messages. As far as cost goes the average design time is 5.3 hours and the ads are done in flash and Photoshop of course.

I know this is only a single data point. But since nobody has offered up any similar information, and I haven't gone around asking for quotes, I'll use it to illustrate a point: content production doesn't necessarily have to break the bank. This is important, since once you start your digital signage network, you'll have to feed it fresh content pretty much forever. But let's look at what happens to a single spot generated in 5.3 hours at various hourly pricing levels:

$15/hr	$20/hr	$25/hr	$30/hr	$40/hr	$50/hr	$60/hr	$70/hr	$80/hr
$80	$106	$133	$159	$212	$265	$318	$371	$424

You'll pay varying amounts depending on whether you get your neighbor's friend's kid to make your spots for $15/hr or hire a professional for twice that (or more). But then again, the quality of those two outputs will likely be different too.

What's the future of content?

As we see the use of video fall (and let's face it, five years ago 90% of digital signage networks were probably exclusively using full motion video), something will have to take its place. My guess is that dynamic content will end up filling the void. While Adobe Flash at one point had a stranglehold on that market, dynamic HTML has made a strong showing, and will no doubt become even more prevalent as more digital signage players become capable of displaying HTML 5 content. That said, there's plenty of room left for still images, and various flavors of dynamic text, since the 2011 digital signage content mix appears to be just as varied as the 2010 mix was.

The good news is that as more content becomes dynamically updateable, the overall price of content production should go down, since the expensive bits (like full motion video or 3D) can be generated once, and then altered or repurposed via dynamic controls. And actually, there really isn't any bad news. Over the past year, more content houses have become familiar with the unique presentation challenges of DOOH networks, there have been more educational undertakings to explain how to design effective digital signage content, and more end users are recognizing that you can't simply put up recycled TV commercials and expect to see great results. When you think about it, that's a win for network owners and viewers alike.

What other content trends would you like to see us cover? Leave a comment and let me know!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Is Front-Loaded Scale the Secret to a Successful DOOH Network?

Bill Gerba

Just a few short months ago, we wrote an article that posed a simple question: how many ads do you need to sell to keep a DOOH network afloat? As you might infer, this article tried to guesstimate the number of advertisements needed to support the cost of installing and operating the screens that the ads were displayed on. We made some assumptions, did some math, and ultimately decided that while high-traffic venues could probably get by with mediocre sales -- since reach-based metrics such as CPM/Viewers are currently the most popular way to price DOOH ads -- screens in lower traffic venues would suffer unless supported by many advertisers. All of the numbers were based on actual survey data, drawing from our studies on how much network owners typically spend to build out a DOOH network, and which mechanisms they use to monetize the space.

This week I planned to sit down and update the ad sales estimate number using the data from our 2011 pricing survey. However, when applying the data two things quickly became apparent: first, if you consider just at the capital expenditures, which are normally made upfront, there was only a 5.6% decline in our pricing index between 2010 and 2011. That's obviously not going to result in dramatic changes to our estimates. But second, when evaluated in light of last week's conclusion that a 100-screen network might take 12 employees to operate, it would seem that higher operating costs could make reaching the breakeven point more difficult than our January analysis suggested.

How many advertisers did it take to fund a 100-screen network in 2011?

Just as in our January article, the number of advertisers needed depends on the amount of traffic the venues typically receive. The greater the amount of traffic, the fewer discrete advertisers needed, since each ad placement would sell for more (i.e. some multiple of the $6.50 median CPM/Viewers we identified in late 2011). However, this chart no longer tells the whole story.

The problem: even small DOOH networks face considerable fixed operating costs

You'll notice that there are two series in the chart above. The yellow series indicates the number of ads needed to break even on operating expenses while also paying down capital expenses, while the pink series focuses only on operating expenses, as if the capital costs were zero. (In these calculations, operating expenses are equal to staffing costs plus the cost of management software and tech support.) As you can see, because the operating expenses are so considerable relative to capital costs over the course of three years, leaving out the capital costs doesn't really affect things much. This led me to wonder whether I have been wrong all these years, and the key to success in the DOOH marketplace is not a conservative, metered approach but rather a massive burst of deployments early on.

The solution: front-loaded scale

As this second chart illustrates, doubling the number of screens from 100 to 200 would (theoretically) double the number of (thousands of) viewers the network has access to. However, the cost of this doubling would be front-loaded: while capital expenses would double versus our 100-screen projections, operating expenses would barely increase at all, and there are twice as many screens to spread the operating costs over. So, by front-loading the investment (and thus the risk), a new DOOH network could cut the number of advertisers needed to break even nearly in half. Of course, this assumes that the same advertisers would be willing to buy space on all of the screens in the network. But as we've learned from our DOOH advertising survey, advertisers love scale, and they think (and buy) in terms of reach, which is inherently tied to scale.

The bottom line is this: if you're investing in a DOOH network, you'd be crazy to not fund enough screens to bring the required number of paying advertisers down to a reasonable level. And I'd extrapolate this one step further: I wouldn't be surprised to find that there is some baseline number of screens below which it is impossible to make an ad-funded network profitable. Judging from the number of failures we've observed in this industry, I would be equally unsurprised to find out that most of the DOOH networks that have ever been deployed got stuck at or below this level, because of difficulties raising the funds to expand. Now I'm sure that in many of those failed cases, there were additional factors: inexperienced sales teams, poor budgeting, and so on. But it may well be that investors, unwilling to "throw good money after bad," unintentionally sabotaged themselves by not recognizing the relationship between opex (NOT capex) and the breakeven point.

How big does a DOOH advertising network need to be in order to turn a profit? Are there other monetization strategies that make sense for very small networks? Leave a comment and let us know.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Digital Signage Networks Average 12.4 Employees: Survey

Bill Gerba

In our recent article on the 5.6% decline in the cost of deploying and running a digital signage network, we didn't include any details on a few of the cost centers that we've covered in the past -- specifically, the costs of content creation and personnel. Though we added some new questions to our 2011 pricing survey to address those items specifically, it took a bit of time to crunch the numbers, compare the results to last year's analysis, scratch our heads a bit, and repeat. When all was said and done, the result was clear enough: despite technical advances, companies seem to need more staff to run their networks than in the past, which is sure to drive up costs. Meanwhile, content is becoming more affordable, even as quality (arguably) improves. Taken together with the 5.6% decline in component pricing, now still seems like a great time to be implementing a new digital signage network... or possibly acquiring and optimizing an existing network that hasn't yet found its stride.

How many employees does it take to install and manage a 100-screen network?

In our 2009 Digital Signage Pricing Study, we determined that the "average" 100-screen network takes somewhere between 7 and 15 people to run, with an average of around 9 people. Then, in our 2010 Digital Signage Pricing Study, we left the average headcount at 9, but slightly upped the average salary for these personnel to $52.5K, reflecting an across-the-board increase of 5%. That's equivalent to $39,375/month in expenses, or $394/screen/month. In total, the "average" screen in a "typical" 100-screen network in our 2010 study cost about $497/month after salaries were factored in, and thus a 100-screen network would have needed to earn just under $50,000/month to break even.

This year, instead of going through the horribly laborious process of contacting companies and figuring out the average headcount, we decided to simply ask survey takers for their input. In the past, I always asked a variety of companies -- from network owners to software vendors -- for their input. So, I figured that having all of those different parties answer through the survey mechanism would produce reasonably similar results -- good enough for our rough estimates, anyway. The end result is that our respondents think it takes an average of 12.4 people to install and operate a 100-screen network over the course of 3 years. Here's the breakdown (which savvy readers may notice adds up to 12.5 people instead of 12.4 due to rounding):

We see a slight preference for creative and design staff, perhaps stemming from an increased awareness of the need to get fresh and engaging content up on the screens. Meanwhile, when considering how much technology is involved in the typical network, companies seem to be operating with relatively few IT and technical staffers. This may be attributable to the increased ease-of-use of today's software solutions, or possibly a greater reliance on SaaS platforms and other means of IT outsourcing.

When it comes to calculating average salaries (which, as always, rely on the questionable estimates from salary.com), we had to bump our numbers up a bit, both to reflect the larger number of executive-level personnel than previously used, and also to track larger economic trends. We ended up with an average salary number of $59k, which is 12.3% higher than our 2010 numbers. Combined with the fact that there are more salaried employees than last year, the total allocation for staffing now seems pretty high: $731,600/year, or about $61K/month. Combined with the approximately $9,750/month needed to cover the component costs (assuming the full amount is amortized over 36 months without any loan or lease expenses), a single screen in our hypothetical 100-screen network costs about $700/month to operate, meaning that the network as a whole would have to earn about $71,000/month to break even. That's an astonishing 40% increase over last year's numbers.

Interestingly, these 12-ish employees are doing a good amount of work, since for the third year in a row, our survey results suggest that most network operators try to handle many tasks in-house rather than outsourcing:

I continue to be baffled by the people who "don't bother with" seemingly essential items like, oh, I dunno, content management, but perhaps that's the reason why there are still plenty of terrible networks out there.

Is operating a digital signage network really more expensive than in the past?

Given all of the other pricing trends we've tracked over the years, that seems highly unlikely. Instead, I think we're witnessing the convergence of several factors in this year's data. First, as noted above, the collection methodology is different than before. Our old method was unsustainable, basically consisting of me spending hours calling and emailing people. Considering that this blog and our pricing reports don't generate any revenue for WireSpring, I couldn't justify spending the time on such a manual process anymore. Still, it does mean that this year's results probably aren't comparable to last year's, despite the flashy math above. Second, a quick spot-check of DOOH networks indicates that there hasn't been any big hiring spree in the last 12 months, and headcounts have generally stayed the same at right around 9-10 people. So, what we're likely seeing is the result of survey respondents trying to estimate what a successful network would require, rather than what the bulk of networks today -- many of which are not successful -- are scraping by with. That would explain the above weighting toward creative and design personnel. We know that making great digital signage content costs money, and many network owners would probably like to have more in-house designers than they can afford to keep on staff today.

Hey, you said you'd talk about content!

You're right, I did. But this article is long enough, so our analysis of content costs will have to wait until next week.

I think a 100-screen network could be run by fewer than 12 people, but the survey results disagree. What do you think? Leave a comment and let us know!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

The 2011 Digital Signage Pricing Study: Costs Fall Another 5.6%

Bill Gerba

Since we started polling the industry to put together a free and comprehensive source of digital signage pricing data back in 2004, we have observed a steady decline in component and project pricing as the popularity of our medium has increased. As has been noted in the past, commoditization of once-obscure parts has probably done more to drive the growth of the digital signage industry than any industry groups, trade shows or Internet blogs (oh yes, I'll go there) possibly could. That made me anxious to get my hands on this year's survey results. Last year, we cautiously predicted that prices might be starting to stabilize, meaning the end of the double-digit price declines we've become accustomed to. With the polls only closing mere hours ago, I haven't had a chance to thoroughly analyze anything yet, but the initial numbers look... well... weird. The data suggests that 2011 did indeed see a small decrease in overall pricing, but that decrease was spread very unevenly across the components that we track, with several of them actually increasing in cost. We noted a similar phenomenon last year, but this year's results take it to a whole new level. Let's dive into the data and see what we can learn.

A quick refresher on our survey

A few years back, we set up a single page of Digital Signage Cost Estimates and Price Guidelines for those who want to review past years' results or measure historical trends for themselves. This page is always my first stop when I begin to analyze the new survey data, since we try to employ exactly the same methodology year after year to provide consistent results. Once I have my columns labeled and rows lined up, I wade through the pages and pages of caveats and gotchas noted in past surveys to make sure I don't repeat any old mistakes. Oh, and I always keep the following disclaimer in mind:

Since digital signage networks can take so many different forms, we try to focus on what still makes up the most typical installation, and build price estimates as if one were planning to deploy a 100-screen network (that is, one screen in 100 different venues). While our previous cost estimates and ecosystem components have closely matched those from other industry analysts (so we don't think we're too far off the mark), the notion of a "typical" network continues to be something of a moving target. More vendors and network owners are choosing to implement screens with new formats and more varied locations, injecting more diversity into the projects. Plus, the idea that there's a standard staffing requirement for any digital signage network is pretty ridiculous. While we and others have proposed a list of key positions that need to be filled when creating a digital signage team, some networks are still very heavy on content production, while others might be composed almost entirely of sales folks. Still, as we looked across a wide array of networks -- representing not just our products but also our competitors' solutions -- we were able to get a reasonable feel for what most companies needed as far as the human resources side of things.

We have started tinkering with our survey to try and glean some information about what really is "typical" these days, but that will have to wait for a future article. For now, I know the question on your mind is this:

What's the cost of a typical 100-screen digital signage network?

Last year saw the stabilization of the economy in the US (more or less), but pricing in the digital signage industry was anything but stable -- if our data is to be believed. While fees for initial project management, content management software and installation all saw double-digit decreases (the price of installation declined by more than a third!), the cost of digital signage software actually increased nearly 18%, and screens and players saw a small bump as well. Now, I know that we've basically had zero inflation for the past decade, and I would not be surprised to learn that we've already realized the vast majority of price decreases for most of the core items that we track. But to see such significant price increases for relatively common goods like LCDs and media players (most of which are just regular PCs) certainly gives me pause.

The resulting cost estimates appear in the table below. (If you're viewing this in your email or RSS reader and can't see the tables and charts, please visit http://www.wirespring.com/blog to get the full experience.)

Cost of a digital sign for 3 years
40" LCD screen	$958
Player hardware	$734
Display mount	$136
Player software	$471
Management software & tech support	$720
Installation	$317
Initial project management	$175
Total	$3,511

Again, each item is priced as if you were going to buy 100 of them to build out a network of 100 screens in 100 venues. It stands to reason that prices for smaller quantities could be substantially higher, but I haven't yet broken down any of these numbers based on the respondents' experiences with larger or smaller networks.

What might account for some of the big price swings?

A few factors might impact the overall validity of our data this year. First, about 50% of our respondents are digital signage vendors, comprising hardware, software and service firms. While that's actually pretty standard for this survey, we had a significantly smaller respondent pool than last year (only about 150 valid responses). While this number still seems large enough to generate statistically significant results, a smaller total than in years past could also make the responses easier to game.

Looking at the individual components, the one that seems hardest to explain is the apparent 18% increase in the price of digital signage software. As a software vendor, I don't have any corroborating evidence of this. (I wish I did!) So about the only thing I can think of is that maybe a large number of survey takers have only dealt with small networks, where software does tend to be more expensive.

The 35% drop in installation costs is also peculiar, though I could see some legitimate factors coming into play there. For example, more companies are offering this kind of service now, and competition does tend to drive down prices. Also, while it looks like the bulk of installations do still revolve around the 40" screen, smaller screens are becoming more common, so maybe respondents were thinking of those scenarios when jotting down their installation price expectations.

Here's how the spending breaks down by category:

As you can see in the tables below, the cost of implementing a 100-screen network has only dropped 5.6% since last year's survey. While that doesn't seem like a lot, particularly when compared to previous years' drops, costs have fallen more than 58% since we started tracking the market way back in 2004. (Note: to ensure an accurate comparison, we removed the 24/7 tech support line from the 2004 numbers, since this was not included in subsequent years.)

What about personnel costs, content creation, etc.?

These past few years we've also started taking a much harder look at the other costs of running a digital signage network, most notably content and staffing costs. While we used to exclusively rely on nuggets gleaned from our own customers and other willing network owners, this year we actually expanded our survey to see if we could get a better picture of how much network owners really spend on an ongoing basis. I'm not quite ready to share the data on these items yet (since I haven't actually tabulated it), but suffice it to say that our next blog article will take a serious look at staffing and content to see how the money really gets spent in most digital signage companies.

Next week brings me to Las Vegas and the 2012 Digital Signage Expo, where no doubt these numbers will be the subject of some debate -- and that's OK by me. (You can catch up with me during the Preset Group Mixer or Conference Seminar S25.) While we never set out to establish the one and only authoritative source of digital signage pricing data, I do feel like our methodology is solid and our approach is transparent. As mentioned above, we'll be digging a little deeper into a few aspects of the data during the weeks ahead. In the meantime, I'd like to solicit some help from our readers:

Do your experiences this past year line up with the numbers above? Have you seen pricing anomalies like these in the real world? Leave a comment and let us know!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

How Does the DOOH Money Flow? [INFOGRAPHIC]

Bill Gerba

A few months ago, Digital Signage Today published a fairly compelling infographic illustrating how digital signage is "all around us." While I stopped reading WIRED magazine (a heavy proponent of the infographic format) back in the 90's, I can still appreciate pretty pictures loaded with numbers. In particular, the infographic from Digital Signage Today does a good job of explaining in layman's terms exactly how and where one might encounter digital signage systems out in the real world, while also shouting about all of the billions of dollars we're all making by serving trillions of impressions to quadrillions of prospective viewers... or something like that. I had this image in my head recently while talking to an especially savvy customer. Eager to expand into the digital signage space, the customer was having trouble understanding how the money flows in a typical DOOH network (for some reason they kept thinking I was joking when I said "it doesn't"). Instead of trying to write up a whitepaper that would never be read or a text-heavy blog article that would could easily be glossed over, I decided it might be more fun and more educational to present this capital flow in infographic form.

Behold the DOOH money flow infographic

This is basically my first try at any kind of infographic (aside from various charts and ecosystem diagrams), and I'm a bit ashamed to admit that I created it in PowerPoint. However, what it lacks in aesthetic appeal it hopefully makes up for in utility, since it's the first document of its kind that I'm aware of.

(Click the image above to see the full-size version, or download the PDF.)

What's going to happen to the aggregators, brokers and sellers?

It's no secret in our industry that the companies built specifically to serve DOOH networks are having a very hard time. In just the past few months, several DOOH aggregators (including some of the more prominent ones) have closed up shop, and I have no doubt that more will follow. However, taking those institutions out of the infographic literally leaves a big gaping hole in the middle -- and that's not just a design issue. As I see it, the problem is that these companies really do fill a need. Unfortunately, it's just not as big or well developed as their cost structures would have us believe. Thus, my prediction is that even if many of the intermediaries listed in the graphic disappear in the next 12 months, a new crop will necessarily come up to replace them. And even if that next batch fails, the process will be repeated until the industry's technology, logistic and business growth realities line up and make such firms viable. Until then, I don't think we're going to see anything more than the anemic fits-and-starts growth that has characterized the DOOH industry in the past.

How did the infographic come to be?

The general "shape" of the graphic is based on numerous conversations with customers, partners and colleagues, none of whom seem to really know how this stuff all goes together outside of their own direct experiences (and all of whom were quite ready to admit that fact). The market statistics were sourced from our own survey on how people buy and sell DOOH advertising, the results of which were published in a series of blog articles:

While the concepts outlined in each text block are obviously simplifications of how things really work, I originally put this graphic together to circulate amongst digital signage neophytes who have literally zero understanding of the advertising industry. As such, I had to gloss over (or outright omit) a lot of details. However, for all its shortcomings, we've already found this infographic to be pretty useful, and I hope you will too. Like all things on this blog, it will be a perpetual work in progress, and I'll certainly take any constructive criticism into account when making future revisions.

Does the DOOH money flow infographic reflect reality? Do we need to make any changes? Do you have data that you'd like to contribute? Leave a comment and let us know! (Email/RSS subscribers, click through to http://www.wirespring.com/blog to comment.)

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Survey: Updating the Digital Signage Price Guide

Bill Gerba

As has been tradition here for quite some time, today I'm going to explain why you should take a few minutes of your precious time to fill out our annual digital signage pricing survey. After nearly eight years of doing this, I would have thought it would get easier. But year after year, I always find it necessary to do a bit of guilt tripping, arm twisting and perhaps even some hard reasoning to get the data that has become the basis for innumerable blog articles, industry reports and trade show presentations (and for all of those, I apologize).

Take two minutes and fill out the pricing survey!

If you haven't read any of our budgeting articles in the past, we basically gather up survey responses from a few hundred people in the industry, interview network owners, operators and suppliers, and then put together a free report detailing what we've found. The historical results are kept on our Digital Signage Cost Estimates and Price Guidelines page. And if you choose to include your email address on the survey form, we'll send you a more detailed version of the survey results for your perusal. The upshot is that for putting in just a few minutes of effort, you'll be given completely free access to the most complete, up-to-date pricing guidelines for our industry that I'm aware of.

It's free? What's in it for you guys?

Karma, hopefully. Or maybe free drinks at the next industry event we show up to.

How do I fill out the survey?

If you're reading this article in a web browser, the survey should appear below. If you don't see it, simply go to http://www.surveymonkey.com/s/signbudget2011 to take the survey.

What does the pricing survey cover?

Digital signage systems have become vastly more varied and complex since the point that we started surveying the pricing landscape back in 2004. Whereas a "typical" network back then might have consisted of some screens dropped from a ceiling (for better or worse), today's networks frequently include tiny, shelf-edge screens, enormous rear-projectors and everything in between. Unfortunately, that means that our notion of an "average" cost is becoming less and less meaningful. If a lot of this sounds familiar, it should. We made the same analysis last year and came to the conclusion that while it's great to have annual price comparisons to guide our purchase decisions, it's also important to make sure that the questions we ask reflect new trends in the industry. So we've added a couple of new questions to help us stay abreast of the latest digital signage pricing trends. But don't worry, the survey can still be completed in about two minutes.

When can I expect to see results?

This survey will be open for a week or two, during which time our magic elves will also be gathering additional pricing intel from various industry sources. If all goes well, we'll post an article with summary findings and the usual array of tables and graphs in early March.

Thanks, as always, for your participation!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

2011 M&A List: Mergers & Acquisitions in Digital Signage and DOOH

Bill Gerba

Last night I was doing a bit of online research on digital out-of-home advertising and noticed something peculiar: the website for SeeSaw Networks has apparently disappeared. After a quick check with industry know-it-all Adrian Cotterill at DailyDOOH, it does appear that the company that more or less invented (or at least popularized) the DOOH network aggregation model has gone under. This is troubling for a few reasons, not the least of which being that SeeSaw was founded by seasoned advertising execs with killer credentials, and had raised a hefty chunk of funding. But more concerning (for me) is that we've seen plenty of companies on the ropes in the past who were frequently picked up by other firms interested in getting into digital signage or DOOH. But that didn't happen this time. Does that mean that the volume of digital signage deals is decreasing? Is the DOOH network aggregation model simply unworkable? Or was it simply a case of a mediocre business being eliminated? In light of SeeSaw's situation, let's take a look at the recent M&A activity across the industry and see if we can spot any trends.

Deals involving digital signage and DOOH companies in 2011

Image credit: Randen Pederson on Flickr

Back in 2010, we published an article on digital signage mergers, acquisitions and bankruptcies that identified 40-50 recent transactions in our space. Over the ensuing months, we made several updates in the comments section (and were joined by others from the community) as new deals came to light. So what was the overall tone of the deal flow in 2011? Thankfully, it looks like there were considerably more mergers and acquisitions than there were flat out bankruptcies, though obviously any number of the deals below might well have been done out of necessity, and I'm sure we've missed plenty of quiet demises:

Amscreen acquires Digicom
Axoro acquires Express Digital Signage product line from .advancedMethod
Brite Media Group acquires Targetcast
Chilin Technology acquires Vertigo Digital Displays
ClearOne acquires MagicBox
Concentia Group acquires Imagesound (kind of)
Delphi Display Systems acquires Fast Track
EnQii and Minicom merge
Haivision acquires CoolSign
iSIGN Media acquires Pinpoint Media
KIT Digital acquires Kewego
LiveIT & Learn acquires Can Media Group
MADIC Holdings acquires Mirane
Mermaid Acquires Headline.TV
Mood Media acquires Muzak
Mood Media acquires Pelika
MRI (Grant Sign Group) acquires Hamilton Digital Designs
Multiband acquires TechniqueUSA
NCR acquires Radiant Systems
Newad acquires assets of Media One
Outcast Media, PumpTop TV and Health Club Media Network merge
Qualcomm acquires gesture recognition assets from GestureTek
Radiant Systems acquires Texas Digital
Saddle Ranch Productions and Seatac Digital Resources merge
Scala acquires Digifour Technologies
Screenvision acquires Uniquescreen Media
SeeSaw Networks goes out of business
Stroer Digital acquires ECE Flatmedia
VeriFone acquires assets of Show Media
VeriFone acquires TaxiMedia
VITEC Multimedia acquires assets of OOH Video
YCD acquires assets of C-Nario

Where will 2012 take us?

As we learned from last month's Digital Signage Sentiment Index, most people feel that 2012 will be a better year than 2011, and from the list above, 2011 didn't necessarily look that bad. So far this year, we've already seen some interesting deal action (PRN's acquisition of indoorDIRECT comes to mind), and the anecdotal evidence we've heard suggests more may be in store.

And what about SeeSaw? Without the details, we can only speculate. Anything from a costly operating structure to poor traction with advertisers could have taken them down. But in the end, it's still a little troubling. From my perspective, somebody needs to make the DOOH network aggregation model work. If it proves to be unworkable, the DOOH industry will be like a failed star -- unable to ignite, and forced to exist as just a cool, dim ball of gas (I worked on that metaphor for a while, in case you can't tell). Despite fringe cases where small networks thrive, merge and grow into successful large networks, failure is still the M.O. for too many digital signage networks. For that to change, we need standardization and interoperability. We need to present a unified front to advertisers. But the work is hard and unglamorous, so despite well more than a decade of growth, few in our industry have truly embraced these concepts and have been willing to devote time and money to the effort.

Were there other deals in 2011 that we missed? Do you have any insights into the deals listed above? Leave a comment and let us know!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Digital Signage Sentiment Index for Q1 2012: Cautious Optimism

Bill Gerba

Two weeks ago, we called upon members of our industry to spend a few seconds filling out a three-question survey on the health of the digital signage sector. We gathered a pretty respectable 155 results and ran the numbers, and now the results are in. The good news: there's reason for optimism. The majority of folks not only said that they're better off this quarter than they were last quarter, but they also think next quarter will bring even more growth. Let's take a look at our first Digital Signage Sentiment Index and see what else we can learn from the responses.

Charting the results

A picture's worth a thousand words, so here are 3,000 words worth of pictures:

To begin with, the majority of the respondents describe themselves as digital signage services companies or network operators, which matches the sort of folks we expected to fill out the survey. In assessing their expectations for the current quarter, just over half indicate that this quarter will be stronger than last quarter. While about 30% expect modest growth of 1-20%, about 11% expect to see growth of 40% or more -- quite a feat if it comes to pass. What's more, when asked to prognosticate about next quarter, an overwhelming 75% expect additional growth, with 10% predicting growth in excess of 40%. (While I didn't do a proper cross-tabulation, a quick-and-dirty analysis does show that today's biggest optimists are also most optimistic about the future).

In both cases, those who don't expect to grow much in the near future expect to stay mostly stable, with only 9% expecting a decline this quarter and a bit less than 10% expecting a decline next quarter. While there's not much more to be gleaned from these results right now, I think they'll serve as a great base when we repeat the exact same survey next quarter and begin charting the trend over time. Plus, I'm really looking forward to seeing if our findings with this quick-and-dirty industry poll wind up mimicking the curve we've been tracking by plotting the predictions of professional analysts who follow the digital signage segment.

Finally, I would like to point out that while the digital signage sentiment index may seem similar (though much more simplistic) to industry barometers regularly released by both the Platt Retail Institute and Exponation (the folks behind the DSE), our methodologies are completely different. Our little survey is meant to be a quick gauge of optimism, and with time will hopefully illustrate whether our collective predictive abilities are any good. And who knows -- maybe this effort will spur the other two groups to do some retrospective analyses of their own data, since both have been conducting surveys for years now.

Looking forward to the next installment

If you were one of the 155 respondents who took the survey last month, thanks! And if not... shame on you! But you'll have a chance to make amends in a few months when we do the whole thing all over again. And if you didn't contribute (or just have something to say), feel free to leave your own predictions in a comment below.

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.

Ideal Length of a Digital Signage Message: 22 Characters or Less

Bill Gerba

After getting some help from Steve Whitehead at Amscreen, my presentation on content best practices for the 2012 Digital Signage Expo is nearly ready. While preparing it, I looked back at many of the other content-related presentations we've put together, and I was generally pleased to see that the recommendations we made four or five years ago still hold true today. However, I was even more pleased at the two or three places where I could go in and make refinements to some of our old adages. Of those, the most useful and potentially important is about message length. As it turns out, just a few characters can have a pretty big impact on whether your on-screen message gets read or not.

What is a word?

In our pioneering (if I do say so myself) research using Amazon's Mechanical Turk last year, we discovered that increasing message length by a few words can dramatically affect recall:

But after reading some unrelated research about email marketing, I began to wonder what's more important: the number of words, or just the sheer amount of space the words take up? After reevaluating the data, I came to the conclusion that it's actually both. Very long phrases are still hard to remember, and the number of characters that make up a phrase seems to affect whether the viewer will try to read the phrase in the first place.

The ideal digital signage message length is 3-5 words, totaling 22 characters or less

The graph above suggests a pretty significant falloff in recall at the five-word mark. But upon further review, it was our particular choice of words that made the difference: messages that contained five shorter words fared just as well as four-word messages containing a similar number of characters, with 22 characters or less representing the sweet spot for recall. This makes sense, since the corresponding number of words falls well within our built-in psychological limit of seven plus or minus two elements.

Whether adding a few extra characters is really going to prevent your messages from being read and remembered probably has a lot more to do with the content on your screen, the quality of the message and the environment that your viewers are in, rather than just the number of characters. But if you wanted just a little more evidence that short, succinct messages are more likely to get remembered, consider this it.

A little housekeeping

Last week, we presented a quick 3-question survey that's designed to measure the pulse of the digital signage industry. If you haven't done so yet, please take 30 seconds to fill out the Digital Signage Sentiment Survey. We plan to publish the initial results in the next week or so and make it a quarterly tradition that we can all benefit from!

Click here to leave a comment

What's WireSpring's Blog All About? WireSpring provides hardware, software and services for digital signage and kiosk projects. But our blog is a labor of love. Our posts cover everything from case studies to creative briefs, and are authored by some of the industry's most well-respected leaders.