Back in 2008, when I made the commitment to post regularly on this site, I was not really sure whether there would be enough to write about. It turned out that the business of digital signage involves so many disciplines, so many characters and so many challenges that having enough material should never have been a concern. I try to write about what I find intellectually stimulating, what gets me fired up, what amuses me and what I think might matter to the folks who take the time to actually read what I write. I have a tag cloud of keywords that reminds me graphically what gets the most attention. It appears that software, industry associations and advertising seem to get the most play. While I make an effort not to talk about other companies (especially competitors) very much, a quick review indicates that this whole VUKUNET thing has inspired me more than a couple of times. I even wrote a satirical post on it at World Cup time, but did not publish it in the interest of being nice. Nevertheless, gird your loins, here we go again.
Let me begin by saying everything written in November of last year remains valid nearly a year later. I’ll try not to repeat the key points. The news that spurred this post was that Graeme Spicer has left the reputable and entrepreneurial environment of Adcentricity to take the reins at VUKUNET. I like and respect Graeme, and wish him every success. But after reading his initial interview with Gail Chiasson of The DailyDOOH, my reaction is that I hope for his sake that the money is really good. After ten months of having a new division effectively led by a marketing person, NEC went out and recruited Spicer, who brings an understanding of digital signage, advertising and the challenges incumbent in each. Whether his perspective, contacts and ideas can salvage the effort remains to be seen, as the interview raised more questions than ever. It is worth dissecting the message to look for new direction.
It did not take Spicer long to get on board with the historic positioning statement for VUKUNET, an ironic and misplaced message of noblesse oblige from the benevolent NEC:
“Pierre Richer (NEC president and COO) is altruistic but isn’t a media man himself. However, he is enthusiastic about the growth potential of the DOOH industry. He saw that someone needed to step up and help. He gave me an offer I couldn’t refuse: carte blanche to go out and evangelize and do everything we can to make it easier for the players in the industry to do their jobs and grow the industry.”
Wow. How will we ever get anywhere in this industry without being shown the way by an altruistic display company? How did we get this far without their noble guidance?
Sarcasm aside, can we skip to the part where the enlightened self-interest is revealed, along with a value proposition?
Spicer starts the session by proclaiming that VUKUNET’s goal is to become the DOOH version of DoubleClick. It is good to have goals, but there may be some complications. DoubleClick sells and serves ads for websites and reports on their performance. This is possible because the endpoints in the ad networks are relatively homogenous: browsers. The DoubleClick service is easily invoked by participating websites and end users are essentially oblivious to its presence. DoubleClick was bought by Google, a California-based company with some experience in online advertising, in 2007. It may not be so easy to imitate DoubleClick’s success in DOOH. Here are a few reasons why:
- The endpoints are far from homogenous. The commonly accepted digital signage software solution count exceeds 300 these days. There may only be 10 to 15 that actually matter in terms of addressable market. Even so, the variances in operating systems, architecture and function are fairly wide. It is hard to imagine that any DOOH software provider is going to let NEC install VUKUNET on top of their own software, thereby controlling both a critical process (content playout) and critical customer data. What would be in it for them? Higher maintenance and support costs? More finger pointing? Oh, by the way, when we last inquired, VUKUNET was Windows-only.
- The value proposition of DoubleClick relates to ad sales. Spicer was quick to reverse the early statements of VUKUNET that positioned it as an ad seller, saying, “Vukunet has no intention of competing with the software companies, nor does it plan to sell advertising.” So if you can’t bring ads to the networks, where is the value? To my knowledge, they are still offering their appropriately priced free software to customers, so I suppose Graeme and I have different definitions of competition.
- The business model is in flux. Since they don’t plan to sell ads, which is in all likelihood an admission that they couldn’t, VUKUNET plans to extract a percentage of the value of ads sold by others and served via VUKUNET. When asked whose pocket that would come out of, the reply was, “This is still being finalized.” I don’t doubt that.
- For it to work, all industry participants must trust and believe in the solution. For the first time, someone from VUKUNET framed an actual business problem correctly, when Spicer says, “one of the biggest problems in the industry is the difficulty in getting proof of performance in a harmonized way.” Suffice it to say that I doubt many of the 300 solution providers (never mind the agencies and networks) are going to abdicate the solution of that problem to a display company. In my opinion, NEC would better serve the industry by hosting a lunch with their display competitors and emerging with a common method and protocol for serial communication with digital displays. That would be refreshing and productive.
I finished reading the interview and was left wondering what the plan was. Spicer says he’ll be talking with networks and software providers. His challenge in those talks will be that for both entities, unless VUKUNET becomes a pervasive, de facto part of the ecosystem, its value proposition crumbles. As a one-off ad serving add-on, it would just exacerbate the stated problem, rather than solve it. Clearly, some thought has gone into challenging the model that they started with. The addition of Spicer is certainly positive. But there are several more tweaks required to get to something that can be monetized and accepted. Here’s a hint: this is not the web. I promise that when they get it right, I will celebrate their breakthrough. Until then, my tag cloud will prevent me from taking on the topic for quite some time.