It's been a while since I've written anything about digital signage and kiosks for the VAR or systems integrator, but in the course of my morning jaunt through the blogosphere I came across an interesting article at CE Pro, a site that bills itself as "the leading information source for the custom electronics installer." Noting that digital signage has become a "growing integration option" (in fact that's the article's title), author Erik Sherman does a nice job of wrangling opinions out of VARs who actually have a few deployments under their belts. Taking his readers through an array of possible business options, Sherman ultimately concludes that digital signage is "a lot of work, but by learning the ropes and carefully approaching the market, you can have your own display -- of increased profits." But is it true? The answer is either yes, no or maybe, depending on how you decide to approach the market.
If you're keeping score at home, the last time I blogged about AV and IT integrators getting involved in digital signage was way back in March 2006. At that time, we tried to expose the four biggest myths that POS and AV integrators seem to encounter with these projects. Nearly two years have passed -- an eternity in the digital signage industry (unless you're in sales, in which case it's about the amount of time it takes for a deal to close), and I wonder... Has anything changed? Are VARs getting better at driving deals in the digital signage marketplace, or has it merely become one more thing that they figure out how to integrate upon a customer's request? From the CE Pro article, I'd say it's a mixed bag. For example, several VAR's cited the ability to put together complex solutions that integrate with a customer's legacy systems using off-the-shelf hardware and software components. That's a good thing, and certainly one of the main areas where we've seen visible improvements in the past year or so. Likewise, the author discusses the common mistake of using consumer-grade displays in public environments, and the kinds of trouble that can lead to.
But hardware and software are the areas we'd expect IT solutions integrators to be the most savvy about. How have they fared when it comes to business models? Have they figured out that jumping into ad sales is darned near impossible? Well, on the heels of those glowing paragraphs about the recent improvements to digital signage technology come more paragraphs about selling ad-driven digital signage networks. The author's take on things: "There are firms doing this successfully, but it's harder than it sounds. [Mary Meeker, president of MEM Systems] tried it four or five years ago and found the going tough. 'The advertisers wanted proof of installation and proof of people watching [the ads],' she says. 'The people at the malls or stores said the opposite -- you show us the advertisers and we'll let you put it in.'" Thankfully, it sounds like the message is starting to get through to some people: jumping from one area of expertise to another is really hard. And doing it while trying to manage a logistically complex and capital-intensive project is insane.
While I wish I could say that my day-to-day experiences at WireSpring completely mirror the opinions and observations expressed in this article, we're actually seeing an even greater number of misinformed organizations trying to dive head first into a project or installation. I recently looked through thousands of inquiries to help identify the five trends in digital signage deployments that separate the winners (i.e. those with stable/successful networks) from the losers (those who have either folded or never got off the ground in the first place). According to the data, trying to sell ads without any ad sales experience was far and away the biggest project killer. I counted over 470 companies that had tried and failed before I lost interest. The result is a rather scary stat: about 94% of the firms that tried to create an ad-based network, but had no prior ad sales experience, ended up failing. Those few who managed to figure it out ran into other unforeseen problems along the way. For example, one client that was modestly successful at selling their screen time (enough to make ends meet, at least) found that they actually needed to build out their own in-house production team to create content optimized for in-store viewing. The reason? Their clients either came in with creative assets that weren't appropriate for the store environment, or had no creative assets at all.
Maybe things will change in 2008, but I'd be surprised if they did. The analysts keep talking about our double-digit compound growth. Agencies and media visionaries talk about the demise of traditional advertising. Real-world spaces increasingly find themselves competing with virtual ones, and keep looking for ways to bridge the gap. And for every piece of real news, five times as much hype gets generated. So it's no surprise that people keep pouring money and resources into digital signs. Likewise, you can't blame the hordes of optimistic companies who are looking for ways to participate in an industry with few hard rules and even fewer bona fide experts. Nor do we want to dampen their enthusiasm or discount the fresh opinions and observations that they bring. So what's the solution? How do you educate a diverse and rapidly-expanding group of companies and individuals that don't fit well into any single governing body or industry association?
Encouraging membership in one of the premier industry bodies is certainly one possibility. Getting newcomers involved in a group like POPAI Digital would certainly give them access to lots of experts and information very quickly. Trade shows and conferences tend to highlight the positives and not so much the negatives. (Except when I'm speaking -- in fact, you can tell it's me when the audience leaves with downtrodden expressions on their faces.) So generally, I don't think trade shows lend a balanced view to those new to the industry. Books, newsletters, websites and blogs? There are a lot of them, but who has time to wade through them all to separate the wheat from the chaff? Next year, I want to see the aforementioned 94% failure rate drop like a rock, and that doesn't have to mean fewer companies involved in the space. It simply means figuring out a way to help companies match the right kinds of digital signage projects with their core competencies. How can we get an eager VAR or system integrator on the right track? If you've got a plan in mind, I'd love to hear your thoughts (you can leave them in a comment below).