Selling Digital Signage

October 14, 2010 by Dave Haynes

Guest post

Selling Digital Signage Can Be Difficult … But It Doesn’t Need To Be As Difficult As We’ve Made It

Much has been written about digital signage in the trades, industry-sponsored whitepapers and countless blogs. We can rapidly reach information overload when searching for best new hardware technologies, current trends for network and content management software, or best practices for project integration, or content design.

Perhaps this is due to the fact the industry suffers no shortage of hardware manufacturers or software developers, and recently content providers are beginning to proliferate too. But search for help with the one thing the industry needs most, sales, and you’ll get zip, nada, bupkis.

Now I can understand not wanting to cough up confidential company info, but the industry as a whole can do a whole lot better at selling digital signage. Let’s explore why we do some of the things we do, the way we do them.

In The Beginning

Digital Signage has been around for nearly two decades now, perhaps even longer. Because digital signage evolved into existence it is difficult to pinpoint a specific date, but arguably it got started in 1988 when Digital Vision AS introduced the first InfoChannel product. But the who, and the when are for another discussion. For the purpose of this paper, we can agree a product identifiable as digital signage has easily existed for at least two decades.

Year after year, for at least the latter half of those 20 years, a growing number of industry pundits have regularly proclaimed “this will be the year digital signage sales take off” with predictions of unprecedented customer acceptance and industry growth. Although growth has been steady… the long-predicted growth spurt has yet to materialize.

Over that time, it seems the industry has spawned as many new software companies with applications for managing content and networks as it has customers. In spite of accelerating industry consolidation over recent years, it is estimated there are currently about 400 companies offering some kind of a digital signage solution … in a marketplace that can likely support only about two dozen or fewer.

So, “what is it that those on the supply side of the business (us) are seeing, that those on the demand side of the business (customers) are missing?” There are many contributing factors, first, a little more history.

The Technology Trap

Thirteen years ago the convergence of two new technologies and relatively easy VC money established the model for selling Digital Signage still used widely today. It began like this; the first commercially available color plasma display was released in 1997; a Fujitsu 42 inch model with a list price of $14,999! (and that was 1997 dollars). Philips and Pioneer also introduced comparable products at similar price points. This was a great new technology, with gi-normous potential for widespread consumer acceptance, however, at $15,000 these TVs appealed only to a very small subset of consumers.

The challenge for the screen manufacturers was to find a viable commercial application for the screens; one that would significantly increase production, and in turn lower costs making the product affordable for the mass consumer market.

Looking for commercial applications for these screens, and the buyers able to afford the new technology, display manufacturers identified digital signage. In the late 1990’s there was a growing number of emerging technology start-ups, infused with truckloads of venture capital, and focused on building large digital signage networks and/or the software that made such networks possible – the display screen of choice was the sexy new plasma monitor. It was a true win/win if viable end-users could be identified. Display manufacturers actively pursued partnerships with the digital signage software companies to pursue the market together.

The software developers and screen manufacturers found cash-rich customers with a commercial application; advertising supported digital signage networks. Many of these were in grocery stores or c-stores. These ad-supported network start-ups had an attractive new product with profit potential; and managed to convince tech-centric venture capitalists that if they built the network, the advertisers would come; and the digital signage industry began in earnest.

Although most of the networks that came into existence because of this early collaboration have since been acquired or failed altogether, mostly due to the ad-based business model that was ahead of its time, they leave as a legacy what I term “The Technology Trap”.

To put it another way, the digital signage industry was born during an unprecedented frenzy of venture capital investment in the technology sector. Its pedigree traces back to two technology based parents; electronic device manufacturing and software engineering. And it was cared for and nurtured by visionary tech-savvy entrepreneurs. Because of this heritage, a common mistake in digital signage sales still exists today. There tends to be a focus on the technology as the solution without identifying and addressing the customer’s key business challenge that digital signage can solve. That’s The Technology Trap.

Part 2: Lessons on selling

(Mark Emmons is a Portland, OR-based industry veteran. You can read more about him here: http://www.sixteen-nine.net/?p=3736)

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