Published January 2009
By R. David Read
Nascent AV powerhouse presents challenges...and vast opportunity.
One of the 1500 kiosks that iDealTech is producing for Design Build Marketing.
Photo Credit: iDeal Technologies, Inc.
Digital signage is a major potential growth area that has been getting a lot of attention of late, as evidenced by the success of last year’s Digital Signage Expo [see “Digital Signage Wins Big,” April 2008]. This writer decided to try to offer more insight into this phenomenon. At first, it appeared to be a simple matter of uncovering a client (end-user) that had a particular digital signage need and then tracing the steps required to complete the project; a typical case study seemingly would fulfill the need. It wasn’t that easy.
After talking with dozens of people involved in one way or another with the digital signage industry, including clients, content providers, manufacturers, network providers and systems implementers, the only conclusion one could reach was, “There’s no such thing as a typical digital signage project.”
As AV designers and system implementers are acutely aware, every project has its own “personality”: unique attributes, site-specific demands and challenges. This is precisely why the AV/IT industry is populated with talented, resourceful designers and implementers. However, in most cases, some form of precedent is available for study and adaptation. For digital signage projects (perhaps because of the relative newness of this subset to the AV/IT industry), no patterns or precedents are quickly ascertainable. It is still very much a “roll-your-own” development process populated by a myriad of by-and-large fragmented suppliers. As a still-emerging industry, there is little in the way of standards, consistent definitions, available guidance or overall, firmly coordinated business models.
Trying to identify just who the buyer and the seller are in any given situation varies. In the established AV/IT marketplace, it is relatively simple to identify the players in the supply chain that will participate in a concept-to-completion project. In the digital signage field, however, it is not that “cut and dried.”
From what can be gathered, in the digital signage market, there are three broad categories of how any particular client might employ the technology:
• As an in-house distribution network: Systems of this nature tend to be used for a specific, dedicated purpose. In the case of a transit network, academic environment or corporate entity, the primary purpose is to display pertinent information to the client’s employees, customers, visitors or student body. In many cases, this takes the form of being a “bulletin-board” type of application.
Even this can vary. For example: A transit authority might elect to display information not specifically related to its schedules and add on public service announcements and weather/news data for its customers’ edification. For revenue-generating purposes, advertising material from outside, unrelated vendors might be spliced in.
• Narrow-casting information specifically related to the client’s activities: In the retail environment, a chain of stores might elect to display infomercials that deal almost exclusively with in-house merchandising efforts. A large, nationwide retailer might elect to display information (with some geographical/demographic emphasis) that is germane to merchandise that complements its individual sales goals. This might or mightn’t include advertising from vendors.
A bank might display its services and tout current rates for loans, currency exchange values and returns paid for investor capital.
An automobile dealer, for example, is loath to display “off-the-air” programming simply to avoid showing competitive material from other like vendors. Digital signage programs in this type of environment are more apt to concentrate on the dealer’s models and in-house services. This is an increasingly lucrative market for the digital signage provider and lends itself well to the incorporation of “interactive” consumer-oriented “select your options and build/price your next automotive purchase.”
• Advertising-driven signage: The subtle distinction between the described narrowcasting network and the advertising-driven model is primarily the composition of the product content and the funding distinctions. In this business model, generally speaking, the host location’s digital signage network is used to display an AV message whose product content is an amalgamation of the host’s products/services, unrelated outside vendor infomercials, news/sports/weather data, etc.
A digital signage network solution involves three major elements: creation, distribution and on-site solution result.
Along these lines, the increasingly popular gas pump display or cashier queue line displays are intended to diminish the customer’s perceived waiting times, and provide revenue for the host location’s owner. Not surprisingly, the host will exercise some control to restrict competitive advertising.
Consequently, unlike TV or print matter, a one-size-fits-all advertising campaign is not a workable solution. This forces the content provider and the network provider to tailor their offerings to fit a myriad of distinctly different end users over a broad range of geographical locations.
Narrowcast signage usually is funded and purchased by the site/host owner, whereas ad-driven signage frequently is funded by the product content provider, i.e. advertising medium. Consequently, a concept-to-completion service provider (depending on the range and scope of its activities) might find itself dealing with the end-user, an advertising agency, a manufacturer/developer, a network provider or some combination thereof.
Adding to the confusion, as many we interviewed remarked, “Many clients [perhaps the majority of end users] that embark on a digital signage solution are understandably confused and not apt to have a firm grasp of what their concept is intended to produce.” Therefore, the service provider’s initial hurdle is to guide and define the customer’s objectives. Then, and only then, can a specific solution be devised. No one wants to be placed in the position of having devised and installed an expensive solution that the client unhappily discovers is not in keeping with what it had perceived.
Analyzing The Situation
After a prospective client has been identified, the first and foremost step facing the service provider is to assist the client in assessing objectives. This might necessitate asking some hard questions:
• For whom will I be working?
a. Is there a mandate and attendant dedicated support from upper management?
b. What department within the client’s organization will provide direction for the project?
c. Is the program being driven by the client’s merchandising staff, an outside ad agency, the IT staff, some nebulous others or, worse yet, all of these?
d. Can the client identify a sole individual (project manager, owner’s representative) who has the authority to guide the process?
• What are the client’s objectives?
a. Are the goals subjective in nature or are they directly tied to the client’s ROI?
b. Are the goals readily ascertainable and definable?
c. Has the scope of the project, i.e., number of locations, site selections and budget, been established?
d. What is the time frame for completion of the project?
e. How will the success of the project be measured?
• What are my responsibilities?
a. As the service provider for the project, what products and services will I be expected to provide?
b. What in-house resources do I have available?
c. Will I be expected to develop and/or repurpose the product content?
d. Will the service provider be responsible for ongoing network management and monitoring?
e. Who will be responsible for the ongoing upgrades to the product content?
f. What partners, manufacturers, etc., will be required to complete the project within the given time frame?
g. How much capital and/or line of credit will be required to complete the project?
h. What are the terms of payment?
i. What arrangements will be required to perform the onsite installation and testing procedures?
NOTE: Up to this point, we have not yet even mentioned the technological factors that will influence system design. In most cases, the client probably doesn’t give a hoot about the technology, but is vitally interested only in the result.
With the advent of digital signage, transit facility information boards have evolved into much more than just schedule listings.
Photo Credit: Ingram Micro
Only after these questions have been answered satisfactorily, and you have your ducks in a row, will it be time to start the system design. As shown in Chart A, a digital signage project is comprised of three major elements:
• The product content development element (creative).
• The network distribution/scheduling/monitoring element (software).
• The on-site AV/IT hardware/software installation element (hardware).
The individual systems integrator’s skills and expertise will determine how much of the scope of work can be assumed in-house and/or will be farmed out to experienced partners. From what our investigation can determine, there are few, if any, single entities that (without partners) can lay claim to being a sole-source, end-to-end supplier.
Let’s examine a case study. Design Build Marketing (DBM) of Yorba Linda CA is the publisher of trade magazines aimed specifically at the roofing industry market. Subscribers are primarily roofing material distributors and contractors serving that specialized marketplace. Understandably, advertisers are vendors catering to that market.
As Vickie Sharples, president of DBM, explained, “We were already publishing seven regional editions of our magazine for subscribers in all 50 states; we had created a website (www.rooferscoffeeshop.com), and were looking for additional ways to expand our advertisers’ image and extend their exposure. I was discussing this with one of my colleagues and he brought up the rather novel idea of using digital signage as a medium.” She laughingly noted, “I spent the next six months studying up on the subject.”
As chance would have it, one of DBM’s neighbors in the Yorba Linda Business Complex was iDeal Technology Inc. (iDealTech), a systems integration firm with a division that specializes in developing digital signage solutions. As Sharples put it, “We struck up a friendship with Bijan Chavoshan, director of digital signage for iDealTech, and his staff, and they proved invaluable in helping us refine our ideas and goals, and guiding us toward a workable solution.”
The chance encounter between DBM and iDealTech evolved into a business relationship, and a program started to take shape. The concept took the form of placing digital signage in roofing distributors’ places of business, which would be accessible by the contractors that frequent that type of establishment. Using DBM’s database, and by interviewing roofing distributors, the company was able to identify some 1500 locations throughout the United States that would agree to participate in the endeavor. DBM would place kiosks, at no cost to the distributor, and throw in a value-added free coffee service to extend the “dwell-time” at the kiosks.
A deal was struck, in which iDealTech would fabricate and place in service the prescribed 1500 kiosk units. In addition to providing the necessary hardware, iDealTech would assume responsibility for repurposing DBM’s existing advertising content and website materials and helping to create new content to fit a digital signage format. Additionally, iDealTech would assume the task of being the sole-source provider for the project and, as such, would provide and guarantee all of the necessary elements for a workable solution.
Although a financially stable organization with an in-house technology staff experienced in digital signage, the prospect of installing, maintaining, and providing warranty and necessary upgrades for 1500 nationwide installations was a formidable task. As Chavoshan noted, “iDealTech has the in-house capabilities to do the repurposing and creation of advertising content; we have the necessary network savvy to conquer the IT integration challenges, and the [within reason] onsite installation capabilities within our local geography. But our ability to provide installation services across the country on an accelerated time frame was, quite simply, not a good employment of our resources.”
Fortunately, iDealTech had formed an alliance with Ingram Micro (see sidebar, “Ingram Micro Technologies”). According to Chavoshan, “Ingram Micro brought to the table those elements that we were lacking. Within their framework, we discovered a myriad of options that could be offered to our customer without having to create individual relationships that, in many cases, would involve inventory commitments with a variety of vendors.”
iDealTech carefully analyzed its strengths and weaknesses. According to Chavoshan, “We needed solid and honest feedback and information regarding the multitude of available options.” iDealTech turned to the resources of Ingram Micro’s Solution Center for guidance in designing the best combination of products to achieve the client’s objectives. “[Ingram Micro’s] impartial, no-axe-to-grind suggestions were a valuable asset,” said Chavoshan.
It was agreed that iDealTech would supply those elements best suited to its core abilities and resources; Ingram Micro would assist in product procurement, price and delivery negotiations with the manufacturers, and provide the necessary nationwide installation and support coverage. The rollout for the program involved the fabrication and installation of 1500 units throughout a widely diverse geographic range spanning the United States (including Alaska and Hawaii), all within the space of 18 months. iDealTech made an arrangement with Ingram Micro’s Services Network (IMSN) to provide the onsite labor and local logistical support with the capability of providing three turnkey projects per day.
Current, Future Plans
As of this writing, a pilot project within easy geographical range for evaluation by DBM and iDealTech was completed successfully. Progress on the initial rollout of 50 units was proceeding throughout the Southern California region. iDealTech is gearing up to fabricate the remaining 1450 kiosks (see sidebar, “Equipment List”), and Ingram’s Business Development and IMSN Groups are marshaling their forces to meet the installation deadlines.
When asked, “What’s next?” Sharples responded, “DBM intends to take the next step by introducing interactivity to our offering. This will take the form of installing larger-screen displays at some 400 or 500 locations; the larger screens will be the attention getter, and existing kiosks at those locations will be converted to have touchscreen interactive capability.”
Editor’s Note: Beginning next month, Sound & Communications will be addressing digital signage in every issue. Watch for “Sign Age!”
Design Build Marketing Kiosk Equipment List
1 iDealTech kiosk manufactured from wood and metal materials
1 Lenovo ThinkCentre A61e Desktop 2.0GHz 1GB RAM 80GB HDD Combo DVD/RW
1 Samsung SyncMaster 19" Widescreen LCD Monitor 700:1 1440X900 black 5MS
1 Samsung 320PX LCD Monitor 32" LCD
1 Zyxel wireless USB 2.0 adapter
1 Zyxel wireless internet sharing router
Information provided by iDealTech.
iDeal Technology Inc.
iDeal Technology Inc. was formed in 2004 along the lines of a typical systems integrator serving the Southern California AV/IT marketplace. The founding partners and current staff, in one way or another, have been involved in some aspect of the AV/IT industry since 1991. A combination of shrinking profit margins in product sales, the greater need for employing a more value-added concept to its business plan and the need to differentiate its company from an ever-increasing field of competitors led it to explore the possibilities in the emerging digital signage/networking markets.
Bijan Chavoshan, director of Digital Signage, noted, “At the end of 2006, we started exploring the possibilities that digital signage might enhance our business and allow iDealTech to carve a niche market in what appeared to be a lucrative, emerging marketplace. We started by doing our homework and honing our knowledge of IT networking and digital product content production and distribution.”
After analyzing its strengths and weaknesses, it was also realized that teaming up with strategic partners would be necessary. The company began evaluating relationships to identify how various alliances could best complement their effectiveness.
Today, by investing in the development of its in-house resources and forming strategic alliances with other suppliers, iDeal Technology, as the present case study details, can approach prospective customers with total end-to-end, concept-to-completion solutions.
For more information, go to www.idealdigitalsignage.com.
Ingram Micro Technologies
Ingram Micro Inc. (IM) formulated a Digital Signage Division focused on accelerating partner growth and establishing new revenue streams. According to the company, its services are unique to North America, and it is claimed that the new division enables solution providers to sell, service and support complete end-to-end digital signage solutions successfully.
Kevin Prewett, vice president, vendor management, Ingram Micro U.S., stated, “Digital signage offers a wide variety of flexible and highly customized IT solutions for the communication needs of virtually any marketplace. Today’s business owners are searching for smarter and more efficient ways to brand, broadcast and communicate in real time with their employees, clients and customers.”
According to Prewett, “The company, by forming strategic alliances with a number of manufacturers, network providers and carefully selected solution/service providers (systems integrators), is positioned to offer a variety of options that can be tailored to fit practically any client’s digital signage program.”
For additional information, go to
Contributing Editor R. David Read has been tracking developments in the digital signage industry for several years.