Content Rules: Digital Signage Isn't About Signs
The fact that digital signage is a booming market doesn't guarantee fat margins. Companies need to embrace a turnkey business model if they're going to succeed.
Advertising ultimately is just another type of content, which is something that a growing number of integrators are adding to their signage portfolio. "Selling the hardware and network without considering content is like installing plumbing in a house and not hooking it into a water source," says AVI-SPL's Vogt.
Name: Vince Faville
Title: Digital Signage Market Development Manager, Advanced AV Location: West Chester, Pa.
Need to Know: The AV integrator long ago set up a unit that handles digital signage. It used to refer clients to a thrid-party content provider but now sells that partners services under the Advanced AV brand.
Credit: Mike Morgan
"Four years ago, we started a content division, and that's been growing steadily," says Alpha Video's Hutchinson. "We've had another record year with that. We probably wouldn't close 50 percent of the business that we close without our content division."
Why? Although small businesses might seem like the most likely candidates for outsourcing content–and they are–integrators offering this service say that midsize and large enterprises also are highly receptive. One reason is that, especially in this economy, those enterprises often prefer not to add or retask staff for tasks that don't generate immediate revenue.
For clients who are deploying an extensive signage network, another reason is that they want the content to be impressive from day one, but they don't have anyone in-house who is capable of producing a splashy launch. In some cases, they'll pay their integrator to create the initial content set and train their staff to take over creation and management six months or a year later.
Like their clients, integrators also have to decide whether to hire content experts or partner with a company such as a graphic design firm. Advanced AV of West Chester, Pa., went the latter route: After initially referring signage clients to the third party, the integrator now partners with that firm and offers its services under the Advanced AV brand.
"That gives me an opportunity to say, 'Sure, we do content," says Vince Faville, Advanced AV's digital signage market development manager. "It's been very successful for us."
Such partnerships can also help position an integrator to expand into the advertising market itself. For example, an advertiser or its agency might not understand signage's unique requirements. Having a partner serve as the technical intermediary can make it easier for both the integrator and the advertiser or its agency.
"If I go to an advertiser and say their ad needs to be 1368x1080, they're not going to know what that means," Faville says. "Then I've got to explain to them computer resolutions in the digital signage space and what clients are expecting out of digital signage."
For integrators, content creation and management also provide both a recurring revenue stream and one that helps offset commoditization on the display side, where competition–including from consumer TVs–as beaten down margins.
"It's a good ongoing revenue generator," says Alpha Video's Hutchinson, whose custom software sits atop products such as digital signage specialist Scala's platform and handles tasks such as importing content streams for display on the signage network. "A large degree of our profitability is in our software."