As I begin to write this, the sun is re-appearing after a once in a lifetime event. No, not display vendors agreeing upon a standard for RS-232, but a total eclipse of the sun.
TLDR warning: It’s 2,000 words worth
Even though I have written exactly one post since last year’s prediction post, traditions die hard. The tradition here is a touchdown and an extra point worth of predictions as the football season kicks off. That’s seven for those of you who think football is played with a round ball. We do it now to get a jump on the usual year-end predictions, which tend to get as much attention as leftover giblet stuffing.
Another tradition is to own the previous year’s predictions, which generally falls somewhere between eating humble pie and establishing spotless credibility. Let’s have a look at how things panned out this year.
1. Solutions Overtake Products
I pointed out that it takes more than devices and software to effectively operate a digital signage network, and that vendors offering full solutions would eventually crowd out those pitching the next big thing. I believe this trend has indeed begun. RFPs seem to always include services, integrated technologies and a preference for one throat to choke. Few, if any decisions hinge on display technologies, and nearly none hinge on media players. Software platforms are generally differentiated at some level either by price, function, architecture or focus, but they no longer exist in a vacuum. As further evidence, there is more activity than ever of hardware vendors trying to align with software and services vendors to work together. Score this one a hit.
2. Consolidation Continues
Another hit… OK, I had an edge on this one, as our company was already in talks to be acquired by STRATACACHE when I wrote it. That tap-in putt notwithstanding, the wave of deals in the vendor and network spaces has continued across the globe. This is how marketplaces work, and it is healthy. On the flip side of the M&A activity is the slow march towards death of others who have hung in there. As some drop out, we move toward a more sustainable ecosystem. There’s more to come.
3. Android is Dead, Long Live Android!
No question that this one proved prophetic. The marketplace has gone from Android zealotry to strong preference and has now receded to “will it work for me?”. The zealotry was driven by opportunistic vendors who trumpeted a game changer without knowledge of how it would work at scale, and in league with a trade press eager to fill columns with unsubstantiated puff pieces. The challenges posed by lack of hardware reliability, OS version variability and device management issues drove cost of ownership higher not lower. And as predicted, Intel has responded with lower cost, reliable x86 products such as Cherry Trail that have closed the gap. Android won’t die, but it will be forced into niches.
4. Display Manufacturers Can’t Suppress Their Desire to ‘Go Wide”
Yes, many display manufacturers continue to push their own software and hosting solutions either in stealth mode (a/k/a screwing partners with plausible deniability) or quite openly in order to try to increase their footprint on deals of scale. Their challenge has been trying to convince people who know better that their proprietary OS, rudimentary software and no-way-out commitments are a good idea. It will never work out, but we are talking about a very stubborn bunch. I thought we’d see a display company buy a software platform to market around, but that did not happen. Nevertheless, I score this as a hit.
5. Standards Come to Programmatic
I suggested that the struggle to bring programmatic tools similar to long-established online versions to digital signage would continue, with some solutions breaking through, driven by widespread adoption of standards and best practices. The first part is certainly true, led by the emergence of Vistar as a potential powerhouse, but driven more by its own evolution than by industry adoption of standards. It feels like this space will have room for a few players, but it seems clear that standards will become important so that buyers can work across multiple platforms with familiar terms of art, metrics and processes. I still believe the DSF’s new, Global DOOH Council will help get us there. I will call this a miss.
6. The Battle Goes Outdoors
I suggested that the battle of the drive-thru was on, and that at least two major users would place their bets on solutions during the year. Despite a huge amount of activity, evolving enclosure designs and dozens of parallel tests, those bets have not yet been placed. So this is a miss, largely due to timing as in the programmatic prediction, but a miss nonetheless. Keep watching the outdoor space. There is too much business driving through those lanes to not invest!
7. Mobile Integration Starts to Make More Sense
I suggested that this would be the year that digital signage would find ways to embrace mobile that works for end users. Without doubt, mobile has continued to be the predominant element of overall digital strategies. There have been good examples of mobile integration with digital signage, but that bridge to make it a seamless and persistent part of the experience still seems to be lacking. We will get there, and I continue to clutch my NFC pearls. But the scorekeeper says it’s a miss. Note: Between the first draft of this piece and the final, STRATACACHE (parent company of RDM) announced the acquisition of Walkbase. It is a mobile-DOOH game changer in every way, and makes my miss on this prediction a near miss based on timing. More on Walkbase another time!
In summary, four hits, two misses and a near miss if you cut me slack on number 7. That is better than last year, so I feel a lot of pressure to improve once again. Here we go… strap on your VR goggles and fly into the Grand Canyon of guesswork with me:
1. The Checkbooks Are Out: Different Targets
This year’s version of the consolidation prediction goes something like this: I believe that there is still plenty of money on the sidelines getting very, very interested in the DOOH and digital signage space. I think very little of any VC/PE money will find its way into the vendor space, although one can expect a few M&A deals. However, my guess is that there is renewed interest in network properties that lend themselves to scale and the ability to leverage emerging technologies for targeting ads. The Outcome Health deal is the poster child for this, and it won’t be the last such deal.
2. Interactivity Sparks More Interest Than Video Walls
This is not to say that video walls are dead…. far from it. But it says here that buyers see greater benefits from interactivity in more places than from iconic deployments in fewer places. Interactivity itself has taken on meaning beyond traditional touch. Gesture, AR, VR and mobile-based interactivity are all in play. In the end, interactivity and large-scale walls serve different purposes and create engagement in very different ways. Look for more interactive deployments in the coming year.
3. So Niche To See You
As our industry (gulp) matures, and success stories from all corners of the space become more well publicized, it seems clear that most vendors and networks will run toward defensible niches that offer growth opportunities. It becomes harder to sell product into verticals without vertical expertise to build credibility and confidence. From the network side, it becomes harder to raise money or sell advertising without a good amount of evidence that the market being addressed can be segmented and targeted. Look for increased movement toward specialization and niches from companies large and small.
4. Industry Events Start to Evolve
In line with the concept outlined in #3 above, it makes sense that both buyers and sellers look harder at how they invest their time and money in industry trade shows. There is still a huge need for education of people and companies new to the space (and there are many). Several conferences, notably DSE and InfoComm, do a fine job on that. Yet there is also a great need for matching (educated) buyers with (qualified) sellers, and trade show floors are not meeting those needs. Quasi-events like NYDSW, coming up on Halloween, have less educational value, but greater ability to have buyers and sellers self-select by interest and focus. Finally, vertical shows such as NRF, NACS, NRA, FMI, HIMSS, and the like need to do a better job of embracing OOH technologies as their members gain interest. The prediction here is that event mangers will take a long look at programming and how they manage their show floors in order to remain relevant to both attendees and exhibitors, both of whom will likely be budget conscious in the coming years.
5. Beacons and AVA Assume their Proper Roles: Measurement & Triggering
I’ve written on the fallacy of beacons as a push technology in the past. Not much has happened to change my position on that. Yet they are not useless. They do a great job of collecting data from mobile device pings, and that can be used by savvy software to measure traffic and even engagement. You will hear less about the silly push schemes and more about big data from little beacons. Anonymous Video Analytics (AVA) burst on the scene years ago as a way to prove the value of advertising CPM rates. As time has passed, AVA has begun to be more valued for measuring engagement, identifying demographic trends, and perhaps most importantly, driving relevant content to screens via triggers. Relevancy is the most important aspect of content if one is hoping to engage, and the ability to increase relevancy based on what you know about viewers is very valuable. Tools will evolve to meet the needs of network owners AND viewers.
6. People Start To Worry About Leadership
You may have noticed I gulped when I mentioned a maturing industry in prediction number 3 above. Digital Signage has shown many of the characteristics of a maturing industry: attention from consulting firms, large-scale investment of private money, a strong industry advocate and association, and ongoing innovation. Yet where we are lacking is the development of new (read: young) talent that will become the next generation of leaders in the space. A customer recently asked me to come up with some names for an executive position with some pretty strict guidelines. It was not easy. The pioneers of this industry are not getting younger and we need smart, entrepreneurial men and women to step in and step up. We need the current leadership crowd to take mentoring seriously. We need to create jobs to attract leaders. If you aren’t worried about this, you ought to be. My guess (and hope) is that many people and organizations will take action on this in the coming year.
7. International Efforts will Start to Bear Fruit
It has often been noted that there are many lessons to be learned by sharing ideas, technologies, lessons and pain across international borders. To be sure, the challenges in India are different than those in Mexico, but the manner is which challenges are met are very instructional. So much more than cricket and rugby happens in the geographically isolated technology test beds of New Zealand and Australia that many Yanks would benefit from understanding their insights. International efforts, such as the Digital Signage Federation’s Global Digital Out-of-Home Council, with North American and European groups sharing ideas and information will be a vanguard of advancing best practices and standards across borders. There will of course be other vehicles for such sharing at trade shows, conferences, and various communications vehicles. As companies from all ends of the marketplace examine how others have succeeded in very different environments, it will make them better, faster and stronger. Next year should see increased activity on that front.
That’s it for this year. Business and the creative process are such that we’ve seen a total eclipse, two major hurricanes and two Kardashian pregnancies since I started this post. I hope the next post takes less time. Please feel free to provide feedback and your own predictions in the comments section.