In our connected world, news, marketing messages and opinions move at the speed of electrons and mouse clicks. It doesn’t take long for a properly positioned industry-related press release, blog post or presentation to be reported, re-tweeted, re-posted, or otherwise regurgitated. If the content is backed by a marketing and PR budget, it becomes almost impossible to ignore. The digital signage community is no different, and content-hungry web sites and blogs snap it up like shrimp cocktails at a wedding reception. Little if any filter is put on the news, which can cut both ways. Two very different examples of recent industry items provide some insight into how buzz is an important element of modern day marketing and brand management. They also serve as a warning to an industry: define yourself or get defined.
At last week’s Screenmedia Expo Europe 2010 in London, Intel and Microsoft continued their joint campaign that started at the NRF Big Show in January, which we talked about here. They announced “the availability of an embedded technology platform developed specifically for digital signage applications that includes Intel chips and Windows software.” More specifically, the Intel chips refer to the latest generation (read: higher cost, higher margin) from Intel, the Intel®Core™ i5 and up. The Windows software referred to is the newly released Windows Embedded Standard 7, the deemed successor to Windows Embedded Standard, f/k/a XP Embedded, which is still fully supported. From a disclosure perspective, our company markets media players with Intel processors and offers Windows as an OS option. They work really well, so it is surprising to us, and I am sure to many competitors that run very nicely on Intel Atom™ and lower powered Core™ processors and/or on XPe, that the technology giants consider this new combination to be specific to the digital signage industry. Their agenda is clear and honorable: they want to move software developers and customers toward newer, higher margin products. They would have you think that if you are not running this processor/OS combination that you are somehow not enabled for the future. To a certain extent, if your goals include futuristic applications such as the traveling prototype that Intel has displayed this year, they may be correct. However, based on what I have observed at trade shows and in the marketplace this year, network operators have placed an incredible amount of emphasis on cost-effectiveness and TCO, especially as it relates to capital items, such as media players. As such, fanless Atom™ and Core Duo™ boards or other lower cost processors seem to have more traction with buyers. Similarly, network operators are taking a long look at the lower cost of Linux OS solutions versus the Windows alternatives. The buzz created and carefully managed by Intel and Microsoft is extremely effective, and opens the door for making a case for a higher cost option for network operators.
A very different type of buzz was generated by Wireless Ronin’s quarterly earnings announcement, also last week. There was a time when the Ronin announcement was eagerly awaited, as analysts, bloggers and investors alike wanted to dive into the financials of the only pure-play public entity in the digital signage technology space. It was interesting and instructive. You could count on commentary, tweets and even breathless optimism on the Ronin’s Yahoo Finance message board. That just isn’t happening anymore. While Wireless Ronin is nominally a competitor, I can only recall one situation in the past 6 years where we were competing for the same deal. As such, I don’t take any great joy in watching or commenting on their travails. In fact, Ronin’s very public struggles don’t make it easy for anyone in the business who seeks to raise money. A large portion of declining revenue appears to be coming from a web-based app built for Chrysler, not core digital signage. Cash burn is “down” to just over $23,000 per day, which probably does not warm the hearts of those who participated in the most recent secondary round(s). Executive changes seem to be regular events. The market has pummeled the Ronin shares since the announcement, yet its market cap, net of estimated current cash, is roughly $15 million. That’s about 4X the declining revenue run rate, which is pretty rich by any standard. In fairness, the company has taken some steps to slow the bleeding, and current management probably rues the day that a prior regime saw fit to pump up the KFC deal beyond what it was at the time. Some positive buzz would go a long way for them. But they are saddled with the reporting requirements of a public company, so any real progress is tempered by the reality of the numbers. The takeaway here is that is very hard to generate positive buzz when any forward-looking statements have to be carefully vetted and tempered by disclosure rules. Buzz is more easily managed from a position of real or perceived strength.
Good marketing and well-orchestrated buzz can close the gap between market realities and buyer perception. The perception-altering power of social media, blogs and industry portals can make even trivial announcements seem important, even when no opinion is added. By the same token, absence of buzz in these important channels presents a very real marketing challenge. In the case of Intel and Microsoft, their market-moving power and PR machines created a groundswell of tweets, verbatim press release postings and general adulation for what in reality was a barely newsworthy, but well-timed release at an industry event. In the example of Wireless Ronin, their ability to generate positive buzz is drastically lowered by their financial reporting requirements. It makes a bumpy road that much harder to travel.
The Wintel/Ronin dichotomy is really a microcosm of the challenges that DOOH faces as it grows, fueled largely by relatively small and entrepreneurial companies. There is a danger that the bigs may well define the market, because the smalls can’t seem to. As an industry, DOOH gets plenty of generally positive buzz, but not all of it is coherent. An outsider would have a tough time understanding the DOOH ecosystem. This is the result of so many entities trying to define what the industry is, and what its drivers are in a manner that suits their needs. This in turn creates a playing field begging for structure and leadership, if not some consolidation. You can bet that if we don’t get our self-image, semantics, agendas and objectives straight pretty soon, they will end up being defined in Santa Clara and Redmond, where they have all those pieces clearly defined to meet their purposes, along with the money and power to spoon feed it to us. Open wide, you are about to be assimilated.
This “industry” seems to be caught up in it’s own “little” swirl of buzz, acronyms and intrigue. Meanwhile, is seems like those on the fringe of the swirl (where the size of the pie will be grown), could 1) care less about it, and 2) are under-served when it comes to the dissemination of knowledge and best practices.
You are one of the best writers I have found in this industry. Perhaps you could back up a bit (as your readership grows) and walk some of us newbies through the basics.
Your name is not on your posts on this new blog?
Thanks for the feedback. I generally try to provide commentary on the industry as a whole, or things that interest me at any given point, but your idea of stepping back a bit may be worthwhile. I’ll try to provide a bit more context, and have been working on a piece for an industry magazine that you may find useful if I ever finish it!
I think Bruce makes a fine point in commenting that many “industry resources” are not geared toward new entrants and those who seek digital signage education. Much of this can be tied to the frequent “re-posting” of press releases across websites and blogs. There are a multitude of “me too” sites that do little more than spit out the same information. What’s necessary is providing commentary, as Ken does very well, on industry developments.
So not to be caught in a deluge of press releases, it’s critical to follow those bloggers and analysts who you come to trust. Follow Twitter and other social media channels to identify those in the industry who engage in conversations rather than just broadcasting news.
There’s little to no value in following anyone who spends all of his team promoting his company’s products. Once you pinpoint a few “trust agents,” ask them who they trust within the industry to offer them unvarnished insight. Before you know it, you will have a network of trusted industry insiders to look to for valuable, actionable information.
Excellent blog Ken and well written.
I believe the M&A season is well underway and this industry will have fewer players a year from today.
Network owners like myself spend too much of their day looking for the few dollars available to support the insatiable appetite of its vendors.
I believe you are correct in that Silicon Valley will take the best and brightest ideas and players and cast the rest back to where they came from. Recent evidence is Kleiner Perkins entry.
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