The impressive growth in events and participation at the recent New York Digital Signage Week (NYDSW) indicates two notable trends. First, it’s a clear sign that digital signage has emerged as a maturing industry after nearly two decades of foundation building. Second, it’s clear that the place of this Olympic style event of events on our autumn calendar is permanent. Both are of course good things. Any opportunity to gather this many players with varied interests and perspectives on common challenges is a win for all participants. Whether the topic is technology, investments, M&A, content, ad selling, measurement or other pieces of our increasingly complex puzzle, conversations spark ideas and innovation. The well-planned events enabled their sponsors and attendees to explore matters of interest to each. The slow march toward making the purchase of ad campaigns across networks as easy and automated as it is on the web was certainly a topic that came up at many of the week’s events. A related topic, credibility, was not openly discussed but needs to be confronted with more urgency regarding the issue of programmatic ad buying within our industry.
The concept of aggregating network data, including available ad inventory, and creating a vehicle for ad buying and delivering campaigns is hardly new. The carcasses of early entrants like SeeSaw Networks, Adcentricity and rVue lie along the yellow brick road toward ad selling Oz. Each of these companies struggled with a number of issues, not the least of which was the astounding number of disparate software platforms running the end points. The quality and availability of needed data was highly variable. The credibility of the playout data was uniformly suspect. It made their job of creating, supporting, and most importantly selling, a viable platform very difficult. Today, there are many next generation platforms for programmatic buying in digital signage. I am not here to evaluate any of them. However, what we are seeing in programmatic today seems oddly parallel to the pattern we are still struggling with in the world of content management platforms. There are lots of entrants, more coming every day, and not much (if anything) in the way of standards that would reduce buyer anxiety.
Here are a couple of simple truths we should probably wrap our heads around:
- Programmatic platforms built by and tied directly to a content management platform are by their nature self-limiting and a bad idea both economically and strategically. Despite the hubris of those taking this route, buyers do not want to limit themselves to networks tied to a single CMS. Neither do they want to be forced to use multiple platforms to complete their desired buys. I chuckled when I was told that one speaker at a large NYDSW event suggested that the best way to solve this problem was for everyone to adopt his technology. I checked, they were not serving brownies flown in from Denver at the event.
- The end game here is going to be two, or at most three, platforms serving as hubs for programmatic buying. Anything else ignores the dual problems of making things easier for the buyer and the fact that there simply is not enough volume to support more. The battle to be one of the winners will play out over time. Along the way, the CMS platforms trying to play the programmatic game will simply have to capitulate to their network operators and provide standardized data to the independent platforms that support more networks. Platforms without the critical mass of networks and engaged agencies will not survive. This consolidation will likely happen faster than it has in the CMS world (where it is ongoing) because the barrier to entry is higher.
The Elephant In The Room
One of the sessions I enjoyed during NYDSW was a panel during DSF’s Coffee & Controversy breakfast event. It was called DOOH: The True Story, and featured four very savvy speakers from different parts of the ecosystem. During their session, the panelists became very engaged when the topic turned to measurement and standards. One of the panelists suggested that the solution might be to have a “standard API” that all the CMS platforms would have to adhere to so that data was delivered to the buying platforms in a common way. I do understand the thought process, but it occurs to me that such an approach does not get us closer to an ecosystem remotely similar to the online ad buying marketplace. It also ignores the elephant in the room.
The online world, for all of its programmatic superiority, still suffers from critical challenges: ad blockers on the front end and click fraud on the back end. The digital signage world, for all its lack of standards, will never have to deal with ad blockers, but we sure as hell have to deal with credibility on the back end. And that is the elephant in the room, because for all the positive and enthusiastic discussions at NYDSW, the shocking turn of events occurring at a digital signage poster child has us facing a critical inflection point as an industry.
Two weeks prior to NYDSW, the Wall Street Journal published a story detailing how Outcome Health (nee Context Media) allegedly misled advertisers with respect to how many locations and screens their ads had appeared upon. The timeframe of the alleged misdeeds coincided with the closure of Outcome’s landmark venture capital round that raised $475 million, and valued the company north of $5 billion. Predictably, the investors, led by super-heavyweights Goldman Sachs, Alphabet and the Pritzker Group, has sued the company and its founders for fraud. Fraud claims, if proven in court, come with treble damages. I have no interest in opining on the case, but its ramifications for the industry require action and leadership.
For the industry, whether or not Outcome is guilty of misleading advertisers and investors is of little consequence, because perception often becomes reality. The perception is now that Outcome, and by default the rest of the industry, has a credibility problem. The digital signage version of click fraud has reared its ugly head. Reportedly, advertisers have already cancelled 8-figure campaigns with Outcome. While that is unfortunate, it’s not surprising. Worse yet, I have heard from multiple sources that other networks, especially those selling ads in the pharma space, are seeing forward ad buys diminish by as much as 15%. The radioactive cloud of diminished credibility impacts network growth, employment, technology and services buys, and outside investment. In short, if you are reading this, it probably effects you. So what can we do?
Taking On The Problem
For starters, we have to recognize the problem and not try to spin it. No army of professional PR handlers, 140-character pundits or white paper-writing consultants can make it go away. The advertisers are smarter than that, and we need to be as well. We need people, entrepreneurs and organizations invested in this industry to come together to meet this head on with action. The result of such thinking should be something that addresses measurement, credibility and standards. It would be something that might excite that Coffee & Controversy panel. Anything less is a half measure.
Here is how I would suggest we take lemons and make lemonade (or Limoncello, if that is your preferred use of lemons):
A new, independent entity could emerge to create, monitor and be a steward for industry credibility. It would essentially become the trusted repository for network data such as changes in locations, online status, playout records, available inventory and the like. It would create and enforce methods and standards for measurement and verification, data formats and reporting frequency. It would conduct periodic and random audits to confirm data accuracy. It would store and manage the data in a secure fashion. On the other side, it would provide validated network data to programmatic platforms in a standardized format. The entity would be funded by the networks, who have the dual interest of selling ads and having their data verified as true; by the programmatic platforms, who want to solve for the staggering variety of CMS platforms and confidence in their data; and by the ad buyers, who need their clients to be able to compare apples to apples with assurance.
Make no mistake, this would be a business, not a committee. Whether it springs from an existing business with the chops to pull all the constituents together, or comes as a startup built from the ground-up, we need a neutral, trusted guardian of industry data and credibility. Once that exists, networks, CMS providers and programmatic platforms would either support it and conform to its standards and processes, or ignore it at their own peril. Maybe this is not the right solution, but it does recognize the problem.
None of Goldman Sachs, Alphabet or Pritzker were dipping their toes in the digital signage water for the first time with Outcome. Perhaps they might be interested in funding a properly conceived business that accelerates the next stage of growth in our industry. From challenges and inflection points come opportunities. For all that is positive and encouraging in our global industry, taking on this challenge once and for all needs to be job one. Let’s start the conversations.