The Digital Signage Insider

Visualizing How to Add Value to the Digital Signage Ecosystem

Published on: 2011-01-21

I've been talking to a lot of "channel people" lately -- you know, folks who have words like "distribution" and "supply chain" on their business cards. As the DSE looms nearer, it seems like more of them are trying to decide whether it makes sense to jump on the digital signage bandwagon, and if there's any money to be made by doing so. After the third or fourth conversation that took that tone, I was compelled to dust off my old digital signage ecosystem graphic from a blog article back in 2008. It could use a little updating, but I've found this graphic is actually quite useful in illustrating where a savvy company can still add value -- and make a little money -- without becoming just another industry hanger-on.

Reading between the bubbles

When I originally put together the graphic below in 2008, it was for an article about the digital signage ecosystem, penned in response to a somewhat similar graphic from iSuppli. At the time, I thought our concept of the ecosystem might be unnecessarily complicated, but after a few more years in the business, I'm instead surprised by just how complicated things really are. Vendors with direct sales teams bid against channel partners on the same deals. Content creators turn into application developers but don't provide technical support. Installation companies manage procurement and handle accounts payable. And procurement companies buy and schedule content.

The ecosystem diagram circa 2008

Over time, I thought through these strange and complex relationships and tried to place various companies on my diagram. And then it occurred to me: the best places for innovation right now aren't the bubbles themselves, they're the spaces between the bubbles. Whereas companies in the digital signage industry tended to handle discrete lists of tasks, increased competition and economic pressure has left us all looking for ways to add more value to client relationships, and that often means straddling two or more bubbles in the ecosystem graphic. For example:
  • Software Vendor + Technical Consultant + Project Manager = Full-Service Technical Solutions Provider. Ok, that one was pretty easy, since many software guys out there are willing to do custom development and project planning for a fee. What about...

  • Warehousing + JIT Procurement + Shipping = Full-Service Supply-Chain Management. A bunch of small, midsize and even large distributors are already starting to offer this type of service, where you're not just buying from them, but they're managing the acquisition and distribution of products according to your schedule.

  • And if you throw Financing into the above mix, you get yet another kind of entity -- one that can help you spread capital costs out (and hopefully match them up with revenue).
Of course, setting up a company to finance and distribute equipment has a large capital cost of its own. Thankfully, there are also plenty of opportunities for businesses focused on less capital-intensive expansion. To better illustrate these opportunities, I decided to improve upon the 2008 ecosystem chart. The result is the new graphic below, which is admittedly very incomplete, but gives a better approximation of the various roles, products and services that make up our industry:

The updated ecosystem diagram for 2011

What does the new diagram tell us?

Essentially, there's room for two types of growth: horizontal and vertical. We touched on these concepts back in 2010, when we looked at horizontal and vertical integration as M&A strategies. In the context of the digital signage ecosystem, some examples of vertical growth could include:
  • Creative Services + Content Syndication = Content-as-a-Service. We've actually seen a couple of these companies emerge recently, on top of old-timers like the AP and Reuters who produce and syndicate both "hard" and "soft" content to anyone willing to pay.

  • CMS-as-a-Service + Content Strategy + Licensing = Curated Content Service. There's definitely a need in the marketplace for experts to "suggest" content to time-starved network managers who want their screens to stay fresh and look good.

  • Business Strategy + Measurement + Analysis = Digital Signage Actuary. Admittedly, the title of this one is a bit lame. But anyone with the skills necessary to implement a measurement process, analyze the data, and generate meaningful strategic conclusions from them should have no trouble attracting customers.
Meanwhile, examples of horizontal growth might include:
  • Tech Integration + Development + Content Creation = Full-Service Project Integration. Whether app development and content creation are in-housed or outsourced, integrators who can manage the entire project are in demand.

  • Digital Signage SaaS + Content-as-a-Service = Turnkey Signage. Again, we've started to see vendors package content-as-a-service with their existing software offerings, so I think that trend will continue thanks to its great value to end-users, particularly those with little creative experience.

  • Creative Strategy + Business Strategy = Super-Duper Gee Whiz Digital Signage Expert Consultant. Yup, we've got plenty of them already, but only a vanishingly small number of good ones.
Using the diagram as a map, you can visualize where opportunities might emerge by either adding services to your repertoire, or finding a new niche to target. I hope to continue expanding the diagram in the future, though it's doubtful there will ever be a "final" version that captures all of the nuances and relationships out there. But what I'm really looking forward to is discovering all of the new things -- both parts and people -- that will no doubt grow and develop inside our ecosystem as time goes on.

What else would you add to the digital signage ecosystem diagram? Leave a comment and let us know!


0 # Paul 2011-01-22 12:52
Superb. One thing I would mention (but not add) is that some companies are doing a land grab for services to be turnkey. Problems is the "jack of all trades, master of none" mantra. They aren't very good at anything. Like they're throwing darts at your diagram. What I would add to this diagram are two things: 1. Firewalls. If you're capable in one area, you're allowed only to be capable in complementary areas. (e.g. People who make mounts cable/extender vendors, but should not be advising or selling managed services.) 2. Industry competency selection zones. (Because I can't think of a better way to name it). The idea being that outside industries - advertising (agency model) mobile, online, etc. have bubbles they can drop into for the benefit of the project or client. (I see your diagram in a 3D fashion - hey we all gotta update!) I'm sure people reading this will re-draw the diagram. That's actually a good thing - it vets out many of the possibilities. However, it doesn't qualify any company to be master, nor does it guarantee success. Perhaps it only brings clarity to the murky waters.
0 # Bill Gerba 2011-01-28 14:31
Great comment, Paul. I did actually consider dusting off the old 3D modeling software, but in the end decided my time was better spent elsewhere :) However, your point makes me think: are there companies who really are good at everything? I know we offer a "kitchen sink" option to demanding clients, but we disclose how, when and why we're outsourcing components (like video production, etc.) to more qualified companies. But my questions would now be a) is there a good option on the market for a truly full-service solution provider, and b) is there a value to being such a company (e.g. can you really make more money that way)?
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