You Decide: Tipping or Tripping?

You Decide: Tipping or Tripping?

There are teachable moments, and in our age of social media, there are bloggable moments.  Today a bloggable moment occurred regarding the article written by Garry McGuire, CEO of RMG, entitled Why 2011 Will Be Digital Out-of-Home’s Tipping Point, posted online at iMedia Connection. The article was essentially the text version of Mr. McGuire’s keynote speech at the Strategy Institute’s 5th Annual Digital Signage Investor Conference last month in New York. You can read ScreenMedia Daily’s keynote coverage here, complete with a familiar graphic. The Tipping Point article was very well presented, and predictably drew a number of positive Twitter call-outs within the digital signage community. Only in mid-afternoon did I see a dissenting opinion, that from Stephen Ghigliotty (@ScreenVox), who said he was tired of hearing about it every year. I took note of Stephen’s dissent, and quickly received tweets of skepticism from fellow bloggers Bill Gerba and Adrian Cotterill. Bill says the industry just isn’t there. Adrian questioned Mr. McGuire’s motivation in predicting digital signage nirvana. I have a hard time refuting any of McGuire’s key points, since I’ve noted several of them myself. Maybe everyone is right, I think you just need to consider source and context. That sounds like a bloggable moment to me.

Stephen is right: industry cognoscenti have been crying wolf over consolidation and the arrival of truckloads of ad dollars for years. It always seems to be imminent, and investors, network owners and vendors have all had to extend the blade of their hockey stick charts much further than planned. In some cases, that has caused businesses to fail, and more will follow. Why should we believe it now?

Bill is right: the vast majority of networks and the industry infrastructure itself is still in flux, and not “ready” to make ad buyers feel safe just yet. There are a bazillion digital signage platforms in play, and now an emerging food fight on the media planning/ad buying side. Not exactly the stability buyers crave. I heard a story yesterday of an ad campaign being offered to a network based upon a media kit that claimed 100 locations. The network operator informed the ad buyer that the 100 represented how many locations they could roll out if enough ads were guaranteed. C’mon, man!

Adrian is right: there is a method to Garry McGuire’s madness. RMG is the most heavily funded network operator out there at this time. They have what is reported to be a 9-figure war chest for doing acquisitions. Their investors, Kleiner Perkins and DAG Ventures, make big bets and plan for big exits. As CEO, McGuire does not have to spend any time worrying about capital formation, although to be fair, the care and feeding of VC Board members is a non-trivial task in itself. He is focused on business development and execution of the strategy 24/7. He has assembled a strong team to deal with tactics and operations. His job is to position RMG as a great vehicle for ad budget dollars, as an assembler of network assets, and eventually as an IPO offering (the big exit). His well-reasoned arguments for seeing a tipping point in 2011 serve all three purposes very well. The Investor Conference venue was a great place to test the ideas in front of DOOH insiders and a few investors. The iMedia Connection article was aimed squarely at marketers and agency types. While it is evangelical for the industry itself, it is of course consistent with RMG’s message.

And Garry is right: despite the ongoing fragmentation in the business and some hard work that remains to be done, the industry is showing fundamental signs of growth and maturity, and has improved in terms of attraction to advertising professionals. His arguments relate to the readiness of certain networks to take on ad dollars and meet the targeting, delivery and reporting needs of the buyers. He is accurate in reporting all of the major points he makes. In some cases, it is a matter of degree, but on balance he is not wrong in making the observations. At question is whether these observations set the stage for a true tipping point for digital signage, or just one he expects for RMG. Only time will tell. I agree that 2011 will be a landmark year for our industry across the board, for the reasons McGuire details and several more.

Technically, I am not sure you can identify a tipping point without the luxury of looking backward. But I know we can all agree that it would be nice to look back a year from now and say we saw one. What’s your take?

One Comment

  1. Paul November 30, 2010 at 9:30 pm - Reply

    Great post, Ken. I want to add one more thing to think about: Garry is the one who will do these things. How many times have we looked at ANY market and seen a major player do something that we didn’t realize we needed until it was done? I absolutely do not believe any company in this industry would create a challenge just to meet it, but when you look at the outstanding positioning that Garry/RMG have built, it’s hard to ignore that he can achieve those things because RMG can. I’m not sure there’s another company in a better position right now than RMG, and it’s their game to lose, so it’s not far fetched to see these tipping points as Garry’s “to-do” list.

    And maybe that’s what we need – is a big giant tipping point (or points) to get moving again.

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