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Digital Signage Bandwagon: Room for the AV Pro?
Type: Article, Report or Whitepaper
Topics: Digital Signage
Date: July 2012
By Mark Mayfield, Special to InfoComm International®
Digital signage has been a hot-button issue in pro AV for more than a decade. And that makes sense: The final link in the digital signage chain is usually some sort of visual display — and sometimes an audio system — and that’s the expertise of the professional AV systems integrator.
But over the years, other professionals have sensed the opportunity and jumped on the bandwagon. Signage specialists saw their market shift from print to electronic displays; many of these companies are now digital signage suppliers. Realizing that “content is king,” advertising agencies have claimed their seat. After all, many digital signs (if not most) are used for advertising in retail environments.
Retail applications of digital signs have also attracted product merchandizing experts to the market. And because one of the key attractions of digital signage is that content can be managed remotely on networked displays, IT service companies, network providers and related installers have forged their links in the chain, along with IT vendors, distributors, VARs and other channel partners because in the big picture, we’re talking about a digital medium that employs a variety of media players and purpose-built PCs. Many deployments — especially for retail applications — consist of large numbers of displays that must be installed quickly across vast geographic areas. Who are those customers going to call, if not the armies of supply-chain services and national “rollout” specialists?
You can go to a half-dozen digital signage trade shows, join about a dozen associations and read several dozen trade publications, each with a different digital signage focus. The question remains, where does the AV professional fit in? And is it too late to find a role?
What is Digital Signage, Really?
After considering all the industries on the digital signage bandwagon, a reality check is in order. It should be recognized that digital signage is not really a single, unified or discrete “market.” Digital signage, strictly speaking, is a product application — used in many vertical markets — that combines a number of technologies for specific communication objectives. Digital signage conveys advertising, branding, entertainment and information to its target audience, using a network of one or more digital displays, over which content can controlled, managed and updated either remotely or locally. So by its real-world nature, digital signage belongs to all industries, each of which brings its own area of expertise to the successful deployment.
With this understanding of digital signage, the role of AV professionals becomes a little clearer. AV pros wear many hats, are conversant in an unusually wide range of technologies and vertical markets, but more than anything else, they are experts in audio and video presentation. No other link in the digital signage supply chain can make that claim.
Once the content is optimized, digitized and transmitted to its final destination across a well-designed network, the final success factor is how good the message sounds and looks. The “quality of presentation” is ultimately determined by the AV system integration and installation, and that’s the unique selling proposition of the AV professional.
Digital signage is more than just designing systems with media players and displays and installing them, although that’s certainly a large part of it. It’s big business. A recent study by IMS Research estimated that hardware supporting digital signage, such as media players, PCs, displays and LED video arrays, generated nearly $5.5 billion in revenue during 2011. Of that total, LCD and plasma displays for digital signage generated revenues of nearly $2.7 billion worldwide, representing 22.5 percent growth over 2010. Media players and PCs for content playback accounted for nearly $1 billion.
Information and analytics provider IHS iSuppli has reported that some 15.4 million large format displays for digital signage and other professional applications were shipped in 2011; that number is expected to reach 17.3 million by the end of 2012. These days you can’t go anywhere in public without seeing one or more display holding forth advertising, information or entertainment. And frankly, it’s nearly impossible to say how many of these displays were installed by AV pros,
Adjusting to the Market
To get a piece of that business, integrators need to make some adjustments to their model. For one thing, because applications with multiple screens often reside on a network, it requires significant networking know-how and the ability to talk to the network keepers within end-user organizations.
“Networking expertise is absolutely a necessity in digital signage. The convergence of AV and IT is here,” says Vince Faville, digital signage market development manager for West Chester, Pa.-based Advanced AV. “It’s realistically what we deal with on a regular basis. There’s not always an AV contact anymore; it’s somebody in the IT department who is making these decisions.”
Advanced AV has a dedicated team that focuses on technologies like digital signage, streaming and other network-connected AV systems. “It gives us a leg up when we’re in a meeting with an IT guy who’s ready to say ‘no’ to whatever you tell them,” Faville says. “Once you start using all the right terms and let that IT person see that you understand the network, the ramifications of what we’re trying to do, and the effect it’s going to have on that network, they’re absolutely more willing to listen to us.”
Networked digital signage means the number of actual sites can be nearly unlimited. Especially in retail applications, the ability to reach vast numbers of store locations with targeted messaging makes digital signage an attractive marketing strategy. But, deploying systems to a large chain, like Wal-Mart’s 4,400 stores in the U.S., is not something AV integrators are always equipped to deal with, since most are locally or regionally focused.
“For the most part, I believe the larger deployments are more often handled by the content providers,” says Jay Rogina, principal and owner of Spinitar, a California-based full service AV integration firm. “The content providers are selling the content first and the ROI, as opposed to focusing on the hardware.”
Over the past decade, many ad agencies have added digital media content development for their clients’ web sites, as well as digital signage. So is it necessary for AV integrators to provide content-creation services in order to be successful in digital signage? Not necessarily, says Faville. “Our business is predominantly higher education and corporate, who are pretty good at doing the content on their own. They may already have a communications department doing all of their images, logos and messaging. We do offer content-creation services, but it’s not something we do a whole lot of,” he says.
Spinitar has been offering digital signage for many years. But Rogina’s not sure the company has exploited the opportunity to the extent it had originally hoped.
“We, like most AV integrators, are doing digital signage deployments for existing customers, typically smaller projects,” Rogina says. He compares this dynamic to the large national rollouts common in the retail industry. Consequently, for most AV system integrators, Rogina says, digital signage has not been a major part of their overall revenue. For example, AVI-SPL, the industry’s largest AV integrator, says that digital signage sales contribute only about one percent to the company’s overall revenue, although they’ve grown 300 percent over last year—a sign that AV integrators can still increase their take of the digital signage business. Even for a company like Advanced AV, with staff focused on the application, digital signage accounts for around 10 percent of revenues.
Where AV Pros Fit In
So where do AV pros fit into the digital signage value chain? It depends on the type of deployment. Digital signage deployments can be divided into several categories, but in the aggregate, they’re broadly defined by the type of content they’re meant to carry. The two main content categories are advertising- and marketing-oriented messaging, and information-oriented content.
For advertising-related content, the emphasis is on timely delivery, sometimes over expansive networks of displays. Tracking and auditing the content is a critical element of managing these types of digital signage networks, since their main purpose is exposing a paid marketing message to the largest audience possible. To date, because of the scope of advertising networks (which are really more like national, regional or local broadcast networks) and the role of incumbent players, it’s been harder for AV integrators to find their niche in digital signage networks built for advertising.
When it comes to information-based content, timeliness is also important, but the emphasis is on the accuracy of the message, therefore the quality of the audiovisual presentation — readability, intelligibility, etc .— is more critical. Also, information signage networks are typically smaller and confined to more closed systems, such as a corporation, hospital or university campus — key vertical markets for many AV integrators. They’re also likely to fall under a larger AV systems contract or a client-integrator relationship already in place. Therefore informational digital signage is lower-hanging fruit for the AV industry.
Still, even the most successful digital signage suppliers — regardless of who they are and they types of content their networks carry — require a roster of installation partners and service providers to manage systems once they’re installed. KeyWest Technology of Lenexa, Kan., is a full-service digital signage provider. Its core product is software that runs messaging on networks. But to make their “full-service” strategy work, the company relies on partnering.
At KeyWest, 60 percent of business goes through resellers that are primarily AV integrators. Another 30 percent goes through specialty VARs, such as Oldsmar, Fla.-based Spectrio, whose main offering is audio message-on-hold services. For installations, says David Little, KeyWest’s director of marketing, “We prefer to use an integrator, because we really do need local IT-oriented people for support. The way most installations occur is through the reseller or VAR channel.”
Identifying companies like KeyWest, Four Winds Interactive, Digital Display Group (part of Alpha Video and Audio), and even Cisco Systems, which make some products in the digital signage chain but also handle end-to-end integrated systems, is one way to find partner opportunities and build a digital signage practice.
It may be that the best chance of success in digital signage is for AV pros to focus on the market segments they already know, and to partner with other digital signage supplier in niches that are less familiar to them. AV integrators who lack the national presence required by some larger clients can seek partnerships with other qualified AV suppliers outside their regions, through resources like InfoComm’s Certified Professional Directory.
Certain end-users, such as high-end, image-conscious retail stores or prestigious law firms, may be more likely to value a high-quality customer viewing experience. To these clients, an AV integrator’s “quality of presentation” expertise may be the competitive advantage that ultimately wins the business.