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Digital Signage and the Butterfly Effect

Author: Bill Gerba on 2010-05-21 00:23:04

Just a few days ago, two mathematicians from the University of Pennsylvania posted a solution to the Boltzmann equation, a complex, 7-dimensional formula used to model the behavior of gases. More than 140 years after the equation was first developed, these mathematicians proved that gaseous systems as a whole remain stable when small, local disturbances (called perturbations) are introduced. How can this possibly relate to digital signage, you ask? If you guessed that it's because we vendors use a 7-dimensional formula to develop our pricing models, you're wrong -- though having seen the gyrations that some of my competitors go through just to generate a quote, I understand why you might feel that way. Basically, in layman's terms, the Boltzmann equation was the science behind the notion of the Butterfly Effect, which suggests that tiny perturbations can have really big consequences. The quintessential example is that of a butterfly flapping its wings, and those tiny fluctuations changing the weather elsewhere. Essentially, the newly discovered solutions to the equation show that the Butterfly Effect is bogus. As one commenter put it, "it takes a very large perturbation to convert a stable portion of atmosphere into a storm, and the flutter of a butterfly's wings is not significant to tipping the balance." See where I'm going with this yet?

Wanted: One very large perturbation

A few weeks ago, I lamented that we've yet to see a truly "game-changing" event in the digital signage industry. But when we do -- for better or worse -- it will make everything that happened in the past look puny by comparison. A number of people commented on that idea, some saying that we've already seen some big deals, others saying that I'd better not be holding my breath.

To those who believe the significance of any deal depends only on the number of dollar signs attached, I ask you: if PRN sold for nearly $300M, SignStorey went for over $70M, and other reasonably high-dollar-amount deals like the Danoo-IdeaCast-National CineMedia experiment have taken place, where's the newfound value to the industry? Hell, where's the value to most of the acquirers? Thomson famously bought PRN in 2005, but never seemed to take much interest in building on their purchase. If it weren't for the skill of PRN's managers, they could easily have fallen into obscurity or disappeared altogether by now. And as for CBS buying SignStorey... I don't think I could even make up a way to spin the results of that in a positive fashion -- unless you include how the founders made out, perhaps.

There have no doubt been deals over the past five years that transacted for very respectable sums of money, regardless of what industry you come from. But their overall effect on the strength and viability of the market could be likened to a butterfly's ability to change the weather. Ditto every company that has launched a "revolutionary," "game-changing," "paradigm-shifting" new product, feature or service over that time. We've seen evolution, yes. And that's important -- it's a sign that our core is solidifying and maturing. But for revolution we need a much, much larger catalyst than we've had so far.

In short, we're still waiting for a large perturbation.

And while we're on that subject...

Making killer content is hard

Another thing struck me as I read about the solution to the Boltzmann Equation: this is why it's so freaking hard to consistently make good content! Time and time again, we'll be working with clients and find out that we can develop a methodology that, when properly followed, makes content that performs better. But on a scale of 1 to 10, we can only consistently turn a 2 or 3 into a 5, 6 or 7. It's nearly impossible to consistently turn anything into a 9 or 10. What's standing in the way? In short, we start running into the "small perturbation" problem, where after a certain point on the quality scale, small optimizations can only yield small improvements. To make content that's a 10 requires a major perturbation in the process, and the necessary changes can vary with every single piece of content and every single message to be communicated. This drives up the cost of content development. It makes me think that Show+Tell's Phil Lenger was right on the money during his DSE presentation from last year. According to Phil, digital signage content only needs to be exceptional some of the time. If reaching peak performance means revamping your design protocol for every clip, it quickly becomes too expensive and exhausting to make each one a 10 out of 10.

Will our "game changing" event be driven by technology? Content? Business model? Leave a comment below and let us know your thoughts!

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