Digital billboards and digital signage networks in retail are driving the rapid expansion of outdoor/out-of-home advertising, rivaling the Internet as the fastest-growing advertising medium. What’s fueling this growth? The ability to reach the elusive consumers while they are out of home, and especially while they are shopping. And the ability to customize each message to audiences at any location and even at any area within a location is another unique value that it brings to marketers.
That said, a number of challenges still prevent the digital out-of-home from joining the ranks of mainstream media. While screens are the most visible component of digital signage, the critical part of any network is the software that powers it.
One of the obstacles to faster growth has been the lack of software platforms that could accommodate all the functionality without being cost-prohibitive to network owners. There are several hundred digital signage software providers whose product description says they can meet all the requirements, which confuses the buyers and delays the request for proposal process. Only a few dozen applications are actually deployed to operate networks.
Lean and Mean
Since digital signage is still in the process of searching for standards and efficient business models, even the most evolved software products are not perfect yet, but there are a few providers that lead the way and have a sizable market penetration. Growing networks will help settle the dust and only big software players will remain. Who will they be and which distribution model will they use?
The current enterprise software applications for digital signage can be grouped as follows: applications that are built in-house, software-in-a-box (“shrink-wrapped”) and third-party hosted solutions. In early deployments, many network operators tended to be a one-stop shop, doing everything from IT to content creation, media distribution and ad sales.
The trend, however, is toward “lean and mean” media companies, and many of the legacy in-house software products are now being replaced by third-party applications as digital network operators focus on how to serve their end users with superior content and advertising solutions, much the way the traditional TV broadcast networks do.
Looking Ahead at Challenges
If we extrapolate the current digital signage trends into the near future, we’ll see that managing networks and their technology the old way is likely to get even more expensive:
- Networks will become bigger, more complex and more targeted.
- The complexity of managing the media space inventory, targeting and scheduling content, multi-versioning and a broad variety of campaign scenarios will require richer functionality, higher stability, reliability and security.
- Competition will force network operators to focus more on making money on the media space and less on maintaining the network.
- Network growth will put increasing pressure on in-house support and maintenance (for users of on-premise software).
- Integration with third parties will require more in-house resources (for users of on-premise software).
- Network operations roles will be more diverse and more narrowly defined (role-specific tasks), and the difference between media management and technical jobs will be more pronounced.
- Fast pace of change in digital signage as a medium, along with development of standards and metrics, will require frequent updates.
The concept of Software as a Service (SaaS) has been gaining ground lately as the model that best meets the cost-cutting and efficiency demands of expanding digital signage networks.
Let’s see how a SaaS solution can resolve the typical challenges of digital signage networks:
- Networks don’t have to invest in additional IT infrastructure; the software company has already done that for them.
- Networks do not need to manage a server, content distribution, or a database, which incur high hardware, personnel and bandwidth costs.
- The Software as a Service approach significantly reduces deployment costs, maintenance overhead and time to market.
- Operators can focus on their core business and not worry about technical aspects of a network.
- Networks are always using the latest technology and business methods, as software upgrades are included in the contract at no extra charge.
- The SaaS model breaks up the upfront software licensing cost into low monthly fees.
All of the above is corroborative evidence that quality SaaS platforms are capable of satisfying operational requirements of rapidly evolving digital signage networks, while offering a significantly lower cost of ownership than other software models.
Brian Dusho is the executive vice president and chief strategy officer at BroadSign International. David Womeldorf is the company’s executive vice president, marketing and products. BroadSign is a provider of hosted solutions for managing digital signage networks.