Numerous factors will figure into the success of digital signage in 2010, which is showing all the signs of being a banner year and tipping point for the industry.
By Keith Kelsen
Digital signage/digital out-of-home (DOOH) has come of age, setting the stage for 2010 to be a stellar year for this industry. Even with a phenomenal 25 percent growth in a down economy in 2009, we are now approaching the one millionth networked screen mark. The epiphany moment will go unnoticed by the installation crew, the consumer and the industry. We will not know when or which one or what type of network it will be on, but it is, by all estimates, already planned for deployment.
This is simply an historic year for digital signage. As I contemplate the trends for 2010, I find myself on the edge of my seat as our industry is filled equally with enthusiasm and promise and, yes, orders for new networks. Here, in brief, is my forecast for the top 10 trends in 2010, with my rationale described in more detail below:
1. Content will top the digital signage planning agenda.
2. Mobile interactivity with digital signage will play a key role in consumer engagement.
3. New models for strategic planning will be developed to ensure network success.
4. Existing and new measurement methods will drive digital signage advertiser acceptance.
5. New software developments will improve the delivery of messages and ads.
6. Progress toward the adoption of content standards will gain momentum.
7. The digital signage industry “Tipping Point” will occur.
8. Large-scale projects will be at an all-time high.
9. Digital signage will experience a surge in mergers, acquisitions and investment.
10. Ad-based networks will continue to grow and ad dollars shift toward DOOH.
1. Content will top the digital signage planning agenda. Content strategies will dominate the launch of new networks and the re-thinking of older networks. Content began to rise to the top of the digital signage agenda in 2009, and now in 2010, it takes a front and center seat.
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“The knowledge base has grown over the past few years and has reached the point where we now understand what it takes to meet digital signage ROI (Return on Investment) and ROO (Return on Objective).”
— Kelsen |
No matter what shape or size the display, content is the fundamental element that ultimately leads to the very success, or failure, of a digital signage deployment. Some of the greatest successes for brands in 2009 were achieved by creating content relevant to the experience and activities consumers were engaged in at the time of interaction.
Any team operating or planning a digital signage network has a unique opportunity to bring excellence to this emerging industry and set some precedents. We can see this already in the work of networks that have researched innovative approaches to content, using it for useful, helpful messaging that provides a positive experience for the viewer.
While DOOH content stands alone during its creative production, it will have more continuity in 2010 with the other four screens (cinema, TV, PC and mobile) to echo its message across the digital landscape. For every screen put into this new landscape, it is the experience consumers take away that will matter most, and what better way to impact that experience than with great content?
2. Mobile interactivity with digital signage will play a key role in consumer engagement. The engagement factor in digital signage took huge leaps in late 2009 with various implementations, including GestureTek’s new CUBE and new multitouch monitors. But most significant news came from DOOH billboard interactions with mobile and User Generated Content (UGC).
How does digital signage work with UGC and what purpose does that serve? In 2009, Razorfish released a Digital Brand Study reporting that digital brand experiences create customers. In fact, 65 percent of consumers reported that “a digital brand experience has changed their opinion of the brand,” and 97 percent of the consumers in the study stated that the digital experience influenced purchase decisions.
These types of experiences also can bridge online and mobile experiences with DOOH. This trend will continue to grow as new methods of engagement are deployed. I predict that more engagement with digital signage and mobile will be the leading the way.
For retail, DOOH brings the influence nearer to the place and time of sale. This will occur with the shopper in Point of Sale Networks, with the “on-the-go” consumer in Point of Transit Networks and with “dwell time viewers” in Point of Wait Networks.
We are entering the next confluence of buying, which will be defined as anything, anyplace, anytime, and digital signage will be a key activator of this new-found commerce. With companies like Google getting into the mobile marketplace on the ad delivery side, interaction with mobile will be near the top of everyone’s list for 2010.
3. New models for strategic planning will be developed to ensure network success. Any new network, large or small, that plans to be successful will take a new strategic approach — creating what I call a “Strategic Blue Print.” In addition, those networks also will create a “Network Guideline” — the details and plan for acceptable content that runs on the network.
Experts agree that strategic planning is the best way to ensure a successful network. The knowledge base has grown over the past few years and has reached the point where we now understand what it takes to meet digital signage ROI (Return on Investment) and ROO (Return on Objective). Consulting firms are on the rise to help guide the uninitiated into creating successful networks.
Pat Hellberg, who ran the Nike Network for seven years and is now a partner in The Preset Group, agrees that planning is critical.
“Clear vision and the road map really provide the network a reason to be, and in turn, the audience a reason to watch,” he says. “Those two are huge issues that require planning.”
Thus, by considering how a particular digital signage network will interact with other types of communication between an organization and its target audience, a marketer can help ensure that the work of digital signage reinforces business goals, sales campaigns or other objectives.
I believe this trend will help us get to the tipping point described in trend No. 7.
4. Existing and new measurement methods will drive digital signage advertiser acceptance. In 2009, DOOH made considerable headway with agencies, in part due to the economic turmoil and its impact on the ad industry and in part due to aggregators like SeeSaw and Adcentricity, as well as the ad-based networks themselves. Moreover, the significant inroads made with agencies and brands could not have been accomplished without the standards developed by the Out-of-Home Advertising Bureau (OVAB).
| “Every digital signage software company will begin to accept a wider array of content on their system and have open APIs that will help connect content, metadata, playlists and networks.” — Kelsen |
Francois Beaubien, CEO and founder of Zoom Media is one that is on the road educating advertisers. “I’m evangelizing on behalf of all of us, because the more of us who embrace the opportunity of having measurement, the better off we will all be,” he says. “I used to ask agency clients, what was their number one issue they’re dealing with? Before, it used to be proof of performance. Did my ad go up? That’s pretty much been answered. Now it’s who is seeing it? Or, how many people are seeing it?”
Getting qualified data from highly respected measurement companies (Nielsen, Arbitron, People Count) is the key to getting agencies and brands on board. Other technologies helping to automate this trend to the next level are DSIQ’s retail analytics and Cognovision’s facial recognition software and data driven statistics. Nielsen’s PRIZM method of slicing up demographics based on “Lifestage” groups and income levels also will have an impact on ad networks.
Neuromarketing also will make its presence known in the digital signage world in Point of Sale (POS) networks. The latest in the biological study of the human brain and advertising, this is where neuroscience meets the marketer. The goal is to understand how the brain produces behavior, how people choose and how the beginning of that choice is a purely biological process. According to neuromarking researchers, it is the act of deciding whether to make that purchase in 2.5 seconds.
5. New software developments will improve the delivery of messages and ads. Delivering the right message to the right audience is still no easy task. It is usually a manual, time-consuming process. Rule base software and intelligent dynamic delivery of each and every piece of content will make more strides in 2010. This direction, in connection with building content in layers as individual components, will create a new dynamic, which in turn will allow anyone to book an ad and have it delivered automatically to any audience on any network in any geographic location and be relevant.
The digital signage industry already has a number of new ad delivery booking systems such as BookingDOOH.com and VUKUNET, the latest entry from NEC. While I like the concepts and the direction, I also realize that they may conflict with how agencies do business and make recommendations to clients. This is what agencies are paid to do: Create, research and book the media for their clients.
There is a comfort level for brands knowing that the network on the other side is what it says it is. The agencies are giving their stamp of approval based on real audience studies with transparency from the networks (thanks again to OVAB). It takes time to educate the brand, get the quality network, create the appropriate media and book the time. SeeSaw and Adcentricity continue to make great strides in this area. Software delivery will help speed the process up in 2010.
6. Progress toward the adoption of content standards will gain momentum. Content standards have been on the industry agenda for many years now. POPAI has made some progress in this area, but adoption is coming out of the need for advertising agencies to book across diverse networks with different needs and formats. It is a huge problem for agencies and brands, especially for the creative types.
It is a twofold problem. One, defining the standard for the type of media, such H.264, MPEG2, AVI, 16:9, 4:3, is going to be a challenge. And two, the creative types are beginning to understand that this is a new medium and needs a unique approach.
| “Expanding networks will find that the business models they worked so hard on refining are going to pay off in viable, profitable operations in 2010.” — Kelsen |
So, I predict that a lot more progress will be made on this front. Every digital signage software company will begin to accept a wider array of content on their system and have open APIs that will help connect content, metadata, playlists and networks. Those companies that do so now are already ahead of the game. This is a must for new ad networks that are built in 2010. Some will say create a standard media that everyone can accept first. Flash and H.264 are more than likely the long-term winners for this trend (just make it 16:9, please).
7. The digital signage industry “Tipping Point” will occur. Many in the industry have said that we have hit a tipping point. But which one? The difference in 2010 is that this tipping point has all the legs of the stool to stand on. The strides that the industry has taken in 2009 were tremendous on several accounts:
1) High growth in the industry (considering the economy)
2) Ad-based network revenues were up
3) Mergers and acquisitions were at reasonable numbers that actually made sense
4) Investment was significant even in a down economy
5) The Digital Signage Association hit 400 members and now has clout
7) Education has been excellent at industry events
8) More agency and brand acceptance (because of the economy)
9) OVAB Standards are accepted by agencies and are here to stay.
8. Large-scale projects will be at an all-time high. A significant number of RFPs (Requests for Proposal) and large projects are slated for 2010. Why? Because the digital signage/DOOH industry has developed an understanding of what works and what doesn’t, and the proof is in. What is working? Is it about the eyeballs? In certain networks, yes. In others, it is about the sales lift, and in some, it is just about information. Elsewhere the criteria for success have been proven with the hard, methodical, time-demonstrated proof of something not even remotely related to eyeballs.
9. Digital signage will experience a surge in mergers, acquisitions and investment. Where sound business models prevail, money follows. Consolidation through mergers and new investment will be one of the hottest digital signage trends in 2010. With fewer than a million screens in the marketplace, DOOH made news on every VC’s and investment banker’s desk in 2009. Going forward, media companies in the TV and Internet industries will certainly look to digital signage as a new horizon once they figure it out. The funds for this new media growth are going to be divided between mobile and digital signage, as these two new mediums battle for attention.
10. Ad-based networks will continue to grow and ad dollars shift toward DOOH. The shift in ad dollars forecast in my 2009 Top Ten occurred as predicted and is still trending for 2010. The success of ad networks in 2009 (brands looking to reach the consumer in more relevant ways) was remarkable, and 2010 will find even more networks being built to serve the relevant markets. Expanding networks will find that the business models they worked so hard on refining are going to pay off in viable, profitable operations in 2010. This, in combination with the proof behind us, will help new networks sprout and ad dollars flow.
It takes hard work, relationships and proof of audience for any network to be successful. The average engaged national brand took one year to make a buying decision on large networks. Thanks to these pioneers, however, these same brands are now hungry for more similar opportunities.
One other major factor is the cost of building networks is way down. To build the same network that was built in 2005-06, including the experimental business models, mistakes and software and gear, is far less than half of the original investment.
Keith Kelsen is CEO of the 5th Screen and author of the first digital signage industry book dedicated to content, “Unleashing the Power of Digital Signage – Content Strategies for the 5th Screen” (Focal Press, 2010). Kelsen will celebrate the launch of his new book at Digital Signage Expo 2010, where in a free workshop presentation he will offer insight into the critical factors of digital signage content, including what works and what doesn’t. To contact him, email keith.kelsen@5thScreen.com.