When Will Digital Signage Go Mainstream?

Posted by on Jul 1, 2011 in DOOH

“The 5th Screen” has yet to reach the mainstream. No, I have not taken simple random samples or done market research, but I spend a lot of time talking with people. In that time, I find that virtually no one has a single clue what ‘digital signage’ even is. As a result, I generally give them a patchy elevator pitch and leave it at that. My skewed reality is that digital signage has not reached the masses—not even by a long shot. It’s only been within the last couple of years that the industry has decided on a name for itself. Oh, and by the way, digital signage audience metrics guidelines are not yet six months old. In fact, when it comes to advertising, DOOH is still the “red-headed step child.” Yes technologies and some industry leaders have been around a long time. But, in a very real sense, the industry is still very prepubescent. And while many tout the industry ‘buzz’ factor by citing recent statistics, or talking about broader market acceptance, we must realize that many of our large friends in this industry are still surviving, if at all, on what’s remaining of venture funding. The question bears down, “are we really as cool as we think we are?”

All of us involved truly hope so. What I am talking about may be more palpable by considering for a moment on some of the small business requests made for digital signage. They might sound something like the following:

“We are looking for a way to put advertisements and information on an LCD screen in our lobby. Is that what you do?”

Or

“We want to be able to make different zones on a plasma screen and charge for advertising space on that screen? From what I can see on your website it looks like you have software for this sort of thing. Is that right?”

Or (and this is my favorite)

“I’m new to this digital signage thing and I can see an opportunity here. Can you help me out with some of the questions I have?”

Currently, large network deployments make up a majority of the digital signage marketplace. Eventually the typhoon will have passed and the flooded market will need no new entrants, especially in the enterprise sector. However, when digital signage can finally become a household name in the minds of small business everywhere, then will industry vendors be empowered. As yet, ‘cream skimming’ is the most relevant phrase that comes to mind in describing what is happening with current industry margins. Again, the rhetoric: “when do we get to the milk?”

The 85%

Is not our market made of small business? My memory tells me that the statistic is somewhere around 85%. If true, then infiltrating digital signage to the masses is going to be where the industry can really start milking the cow. It may be difficult, otherwise to sell a $2,000 per player license to a local coffee shop. It’s just not going to happen. There is a market for small business, but it will require innovation, adaptation (in development and marketing), and a keen eye for market trends. Continuous innovation is necessary for continuous functionality improvements, but cost cutting is necessary for penetration. This is especially relevant in the here and now.

I read an article recently about the $100 laptop project. The project’s purpose was to successfully build a computer for $100 that could be taken to third world countries. The slogan was “a laptop for every child.” This idea was revolutionary, partly because at the time, the screens themselves started at $100.  The organization was finally able to get the cost of the computer down to $150. The sad part: no one, not even the venerable computer giant turned philanthropist Bill Gates wanted to participate. Gates himself is quoted as saying that the project was, “just taking what we do in the rich world and subsidizing its use in the developing world.” Although usefulness for the effort was in question, no one can refute the success of the effort. The last time I checked the project has distributed just under a million laptops to developing countries worldwide.

Low margins? Absolutely. But the laptop effort is filling an unmet need. So, when some inexpensive digital signage solutions are spurned, as a natural result of competition, I can’t help but think, “you can’t stop that, that’s where this whole thing is going.” There are a couple of important questions that need to be raised at this juncture. The first: how fast are we headed in that direction? And, what steps can we take to ensure the transition is pulled off smoothly?

In the current market situation (which is annoyingly woven into almost any store of late), we are moving mainstream very quickly. Solution pricing must drop because even large deployments are moving toward much tighter budgets. In short, as market discipline returns pricing for digital sign solutions must follow. The precise speed that the digital signage industry will make it to the mainstream sector is not known, but the steps to get there are relevant indeed.

Raft the Mainstream

Firstly, to get digital signage into the mainstream, its solutions must be in the minds of mainstream individuals. An education of digital signage, both the good, the bad, and the ugly will be necessary. Education and widespread adoption are almost always slow when it comes to newer mediums. While this is true is, as in any industry, the expensive and difficult hurdle that must be cleared to take a particular solution to the masses is not necessarily education. It is most often industry leaders themselves. Working on different ways to take digital signage to the 85% of the market must be at the forefront.

The second Increase in usability. Decreasing COGS is important, but continuous innovation to make the product experience one that is as user friendly as possible will be paramount for mainstream acceptance. Can grandma use it without pulling her hair out? Why is usability so important to the mainstream? Mainstream customers, although we love them due to mass appeal, are often cost conscious and stupid. Give them something usable, reliable, and cost effective.

We could easily apply marketing to the mainSTREAM to a river. It works only when we look at what are customers want and how they are reacting to our offerings. In any event, we must be like a flowing body of water to our customers and follow the path of least resistance. Where are we receiving resistance from our customers? Is it usability? Is it the high price, brought on by our excessive start-up costs? When it comes to the customer, follow the mainstream. This does not necessarily mean the path of least resistance for your company, but it will mean making the purchase and acceptance process by a customer as easy as falling off a log. Make it easy for them and revenues will most assuredly increase.

When will digital signage be recognized by a more broad audience? It may take some more time, but as prices fall, small companies who were initially reticent or unaware, will begin to get on board, only helping the cause of mass acceptance. At that point, the masses will begin to recognize “digital signage” as a household name. When this occurs, will you be ready?

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