The Digital Signage Insider

Are buyers missing the point of 'networked' digital signage?

Published on: 2008-08-15

I knew I was in for a rough meeting this past Wednesday morning when the man in the chair across from me exclaimed, "so what is this digital signage software of yours, and why should I care anyway?" I was late, admittedly, and the customer was clearly in no mood to be regaled with tales of my infant son, his 4 am feedings, and the fact that I was already wearing my third shirt of the day despite it being only 9 am. Worse, it was plainly obvious that he knew all about digital signage, being the owner of one of the largest systems integration firms in Florida. He was baiting me, or so I thought.

The perfect storm awaits

I hadn't planned to meet with "Jim" that morning. (That's a pseudonym, though I doubt he reads this blog anyway.) In fact, I hadn't even heard of him until the afternoon before, when Mike, our VP of Sales, came into my office to tell me that he had just gotten off the phone with what sounded like an ideal prospect. The company had been in business for a while, already fielded a pilot project, got good results on the advertising side, and needed new technology for the complete rollout -- which was supposedly fully-funded. These relatively rare "perfect storm" candidates have the right combination of resources, experience, and urgency to close quickly and get a lot of value from our products. And having done a pilot in the past usually means they're not too much trouble from a pre-sales support perspective. I was pretty excited. "There's one catch," Mike said at the end of his story. "His dad is the money man, and he's still skeptical of the market. They're local, the son reads your blog, and they want to come up and talk."

Which brings us back to the early morning meeting, and an IT pro's demand that I explain the basics of digital signage to him. Where to start? "Well, you of course know about the technology..." I began. "Look," he said, cutting me off. "My son has been running his network for six months now, and was bugging me about it for a year before that, so I know the ins and outs pretty well. He did OK selling the advertising, and his margins are OK too. But I can't see it getting any scale -- it's too expensive, and you can't keep track of all the people!"

Keeping track of the people

The expensive part I was comfortable with -- that's a pretty common complaint in our industry. But I wasn't sure where he was going with "keeping track of the people." Guessing that he had just read our blog article from a few weeks ago about tracking shoppers in the store with cameras, I jumped into my privacy spiel, explaining that surveillance wasn't necessary, and it could be added on later if advertisers were demanding it. He gave me a funny look. "Cameras?" he began, "I'm talking about the people running the network." At that point I think I must have given him a funny look, too. "You know," he continued, "getting the content onto the screens?" This time figuring that he was referring to our digital signage ecosystem article, I launched into my talk about building a team and defining critical workflow processes. A minute into it, he stopped me again. "Sure, in the office, I get it. Make the content, review it, show it to the advertisers. Got it. But getting it to 200 stores takes a lot of people. They're in 10 cities -- we can't have one guy drive around like we do now!" His mood was deteriorating by the minute; he clearly thought the meeting was a waste of his time. I, on the other hand, was hopelessly confused.

Enter the sneakernet

"Didn't you say this was a digital signage network," I asked, "the kind that uses computers connected together on a network?"
"Yeah," he said.
"So who's driving around where?"
"The drivers have to take the content to the stores so it can be scheduled."
"Scheduled on the network?"

Then it dawned on me: they had been servicing two dozen local stores by driving to each one with a laptop and a DVD full of content, connecting the laptop to a local server at each store, and then uploading the content and scheduling it to play on a single media player that was somewhere else in the store. They had somehow missed the point of the "networked" solution they were using -- namely that it worked over a much larger computer network, the Internet. With $2,500 of computers and $3,500 of software at each location, their budget was bursting at the seams. They assumed a small army of laborers would be needed to drive DVDs around the state. In short, they had been testing a network that had all of the shortcomings of an IP network and a "sneakernet" combined.

No wonder the guy was skeptical. And cranky.

A common challenge

The moral of this story is that these people weren't dumb. In fact, another two hours into our meeting it was clear they were actually pretty tech savvy, and understood the fundamentals of the digital signage business better than most people I talk with on a daily basis. But because of some preconceived notions, some misconceptions on my end and, from the sound of it, a less-than-scrupulous sales rep from their old technology provider, they had missed a pretty obvious and critical step. This lack of accurate information had skewed their budget projections and ROI calculations, and called into question the feasibility of the entire project. Granted, their situation represented one of the biggest misunderstandings about digital signage that I've come across. But we face these kinds of challenges with each new visitor who picks up the phone to talk with us, every day of the week. And I'm sure we're not alone.

Do you have an entertaining story that you'd like to share about a project? Did a customer surprise you with their unique perspective on things?

Leave a comment and let us know. Email and RSS subscribers, click the link below to access the comment form.


+1 # june hagman 2008-08-15 18:25
I recently competed for a project involving a RFP from a state government agency. In my enthusiastic zeal, I admitted that while I had 30 years' worth of experience in marketing, broadcast journalism, production and PR, I was relatively new to field of digital signage. However, I claimed that since this is fairly young technology, most of us are on the "ground floor". My proposal scored the highest, beating my nearest rival by about 30 points. So he filed a robust protest, saying that I was "naive". Since he'd been providing cutting edge technology in indoor digital signage for eight years (as opposed to my first year rollout), I would obviously fail, since 85% of all new businesses fail. I felt a little stung by the criticism. So I traveled to his home state to see this competitor's "dynamic digital signage". I discovered that his product is a consumer HD screen with a DVD player (wires hanging everywhere). The store manager grumped to me that no one ever watched his screen, because the content was so poorly designed & new DVDs were replaced only once a month. Dynamic digital sneaker-net, indeed! Seems to me that it's not only the clients who need to understand the definition dynamic, networked digital signage!
+1 # Bill Gerba 2008-08-15 18:30
Great story, June! Even as a relative newcomer I'll bet you've figured out that there's a lot of fluff and hyperbole in this industry. (And for reference, you can probably count the number of real, \\bona fide\\ "old timer" experts on two hands.). Thanks for sharing. -Bill
0 # Paul Shwabe 2008-08-15 19:55
June- Let's talk numbers here. Various sources quote small businesses failure rates at 25% - 1st year, 50-55% by year 5, and by year 10 at 70%-80%. Could be your Rival was warning the State of his own impending doom since he was at year 8 and out of fresh ideas and providing state-of-the-art technology to his customer. However, let's not argue this point of percentages because you need to consider the industry, the means to track a small business through the years (generally these percentages are based upon a compiled yellow page listing) and possible sale of the small business. Finally let's talk FAILURE - Bear Stearns Securities, Countrywide, Enron... who would have known. To your Rival - Start a new business To the State - Don't over react & see a demo of the technology or pilot the Vendor's solution. My percentage of time is done here. - Paul
0 # june hagman 2008-08-15 20:41
Paul: Love it! Your messages to both entities are priceless. Meanwhile, I've heard of 3 digital sign companies in my area that have folded (and 2 of them were in the computer/IT consulting business!)...but they were missing two magic ingredients: good content for their target demographic and SALES (imagine that). june
0 # Franois Reeves 2008-08-16 14:39
Well, I'm completing financing and about to start yet another digital signage network. I think the possibilities of cutomer interactions with the media are amazing compared to any other offering. The networked aspect allows narrowcasting and remote updating (no gas required). The only part that is still unclear is how you remotely monitor all hardware characteristics (monitor on, off, sound level, cpu overheating, hard disk failure, etc.) I'm sure my guys will find Linux solutions but I am wondering what the trend is for professional monitors as I have noticed that manufacturers are getting rid of the legacy RS-232 port gradually. Bluetooth? TCP-IP right to the monitor? Sorry if I'm a little off topics but where do DS geeks go to if not to this site?
0 # Bill Gerba 2008-08-17 00:34
June: Ah, sales. That does seem to hang up quite a few fledgling digital signage companies, doesn't it? After thinking about it, that was the most remarkable part of the whole story from above -- even with stupidly high cost projections, they were still somehow managing to turn a (small) profit. Franois: Congratulations on managing even one, let alone multiple, signage networks. Per your question, I'm not aware of a particular tech-oriented forum. Every product on the market is different enough that we have trouble speaking the same language (though POPAI has a very active interoperability group trying to work on this right now). For example, my customers have online forums in our web management system that they can access. Scala has something similar, as, I'm sure, do many other software makers. Sorry I couldn't be more helpful here :)
0 # Brad Pianta-McGill 2008-08-29 14:01
Hi Franois,very interesting issue you raise and hard to comment without being too specific about the montioring solution I actually sell to my customers. My view is that there are a number of software tools avilable that come with a very good IT heritage, typically for remotely monitoring server environments. These can operate through a central server, so you can start to automate the monitoring and analysis of your network while still being able to direct connect to any specific player for individual diagnostics or remote working when needed. The good news is that the wealth of tools and options are excellent, the solutions very robust and usually easy to use. However, the real benefit comes in thinking creatively how these network tools can be used to deliver useful information, alerts, triggers etc that is actually going to make for a more efficient and reliable network. TCPIP is the way to go for monitoring the players, screens etc (in my view) To finish, my personal crusade at present is the use of such data to predict failures and to study patterns of problems to increase overall reliability and manual intervention. Bit off topic, but couldnt resist. Brad
+1 # Brendan 2008-09-15 17:06
I have one question.. Digital signage companies are in for massive growth potentials, considering every billboard, indoor and outdoor are INEVITABLY going digital in the years to come. One QUESTION.. But first i must state a few points.. #1 DIGITAL SIGNAGE COMPANIES charge monthly fees for managing content. #2 Software like the scala is what digital signage companies use to make the whole industry work. Question 1: What if softwares like scala reduce prices to balance out the INEVITABLY growing demand for digital signs? Won't the digital signage companies run out of business if the Customers themselves purchase the software and get a personal IT person to manage content?
0 # Bill Gerba 2008-09-15 17:12
Hi Brendan, To begin with, there are tens, if not hundreds of millions of posters, POP displays, billboards and other static signs out there. Of these, a very, very tiny percentage are digital today. Needless to say, there's a lot of growth potential left, so that isn't something that anybody today is seriously worried about. Next, about software. Scala's primary business model is to sell you software on a per-license basis, with an optional annual plan for technical support. Others, including WireSpring, have what's called a software-as-a-service model, where there's an annual fee that bundles software and support together. Either way, you're still paying for software, and probably technical support. This will probably remain the case for the foreseeable future, since these packages do lots of things that are very specific to the digital signage industry. Finally, your assertion that one might "get a personal IT person" to manage the network makes the assumption that DS is mostly an IT project. It isn't. It's a content project, a management project, a marketing project... and so on. An IT guy isn't going to be able to monetize your network or keep it looking good. Consequently, there will be the need for professional assistance as far into the future as I care to look :)
0 # Stephen Cowley 2008-09-17 18:43
Does anyone know of any Digital Signage conferences/expos happening in Canada over the next months?
0 # Stephen Cowley 2008-09-17 20:30
PS - Bill: I read the following from an article you wrote a while back about 'going local' ... "By comparison, less ambitious sales to local firms are more straightforward and even somewhat formulaic to the point where once you hit upon the correct formula for success, it's reasonably easy for a larger sales force to get trained up with the appropriate technique and start making additional sales." Can you direct me to info on such formulaic approaches to sales. At present i am only interested in selling DS to very small businesses (one store/office outfits) and i need input on selling advertising. I hope to start with a pilot project. Thanks.
0 # Bill Gerba 2008-09-22 19:09
Hi Stephen, I'm not an ad sales expert by any stretch, and I don't think there's any kind of "add water and mix" formula that I could write out for you anyway. However, from the customers I've spoken with, the general consensus is that the same kinds of approaches that work for other forms of local ad sales -- think local newspapers -- work well for digital networks focused on hyperlocal marketing.

Subscribe to the Digital Signage Insider RSS feed

Looking for more articles and research? Our newest articles can always be found at Digital Signage Insider, but there are hundreds of additional research articles in our historical articles archive.

You may also be interested in M2M Insider: our blog about M2M and the Internet of Things.