I've been doing a lot of reading lately. When am I not? Generally, I reserve digital signage-specific opinion to this blog, but I have read a few things lately, including an article in the NY Times by Warren Buffett, which have caused me to think and which I feel are worthy of some reiteration. 

Buffet makes an analogous comparison of carbon emissions to "greenback" emissions. It's the "small equivocations in one make large deviations in the other" argument:

In nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.

To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

I want to emphasize that there is nothing evil or destructive in an increase in debt that is proportional to an increase in income or assets. As the resources of individuals, corporations and countries grow, each can handle more debt. The United States remains by far the most prosperous country on earth, and its debt-carrying capacity will grow in the future just as it has in the past.

But it was a wise man who said, “All I want to know is where I’m going to die so I’ll never go there.” We don’t want our country to evolve into the banana-republic economy described by Keynes.

Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.

It is highly unlikely Congress has the leadership and/or willpower to reign in the massive deficit spending. Such a policy would require active and fearless leaders as well as supportive constituents who understand that a little sacrifice now is necessary for future stability. With the unmet need of decisive leaders, inflation is--according to Keynes--all but certain.  Hence, the trick is to invest in assets which will perform equal to or at a greater rate than the of inflation. In times of inflation, fixed assets are generally the exceptional choice.  Otherwise, wealth erodes as hyperinflation gains its footing.

Bold steps will be required to ensure the sustainable viability of our economy, else we'll become the "banana republic" Buffett speaks of: a sordid version of our former self, where the dollar is equal in value to the ruble.

What do you think?

When it comes to digital signage hardware we generally think of a few specific pieces of the whole pie. We generally consider the display, the player, the wiring, the connectivity, and--if required--a measurement device. Simplification of the installation, content creation, and scheduling processes will continue to occur and become increasingly necessary as the industry expands. In many cases, the simplification process means decreasing the number of applicable pieces in an install. One way of doing this is by combining the two most important, most cost-intensive pieces of the deployment: the display and the player. Let's delve into some of the benefits of combining the display and the player into an all-in-one unit.

1. Easier Maintenance and Support

Some might argue the antithesis of this statement, but I believe all-in-ones are easier for maintenance. Most displays that have the media player built in, give easier access to the motherboard, which is where many problems initiate. And, since the motherboard can be removed more easily from an all-in-one than from a small form-factor player, it only makes sense that fixing the motherboard and it's components will be easier. And, I guess it goes without saying that since the motherboard is not as restricted to size as a media player would be, you don't have to pay more for smaller components. You can get more bang for your buck, much like purchasing a tower versus a condensed lappy.

2. More Turnkey

Software and its associated hardware is meant to simplify our lives, not make it more complicated. However, it seems that there are often so many components in a signage installation that it can be overwhelming, especially for a customer who's not familiar with terms like "signage media player" and "Client Management Software." While gear heads don't need whole products, mainstream customers do. As signage continues to simplify and move toward "mom" and "pop" shops, we'll continue to see digital signage players embedded in the rear of displays. Because the unit is all-in-one, it is "plug-n-play." Installing a separate media player implies "plug, plug-n-play." Got it?

3. All-in-Ones are More Secure

You will not have to worry about having a security device for your valuable media player when mounting it to the display. Why? Well because your media player resides with the same encasing as the display, allowing for easy access by those who need to reach the motherboard, and security against those may try stealing the hardware. It's like having a security device already built in. This can also save money by eliminating the need to purchase a security device for the player.

4. They Can Reduce Costs

This may sound ludicrous, but all-in-one displays can really reduce costs--especially when we are talking about scale. There are a couple of reasons for this. The first, I already innumerated earlier. That is, that the player components are not as restricted to space and thereby can be larger. Larger generally always means cost savings when we are talking about computer hardware. The second way compy+displays save costs was also outlined previously: it is not necessary to purchase additional security mounting devices for your media player. Finally, scale will simply drop the prices even more. Some of the current offerings for all-in-ones are still fairly steep, but as they reach a tipping point, world domination is inevitable.

5. All-in-One Displays Make for a Cleaner Installation

Forget all the wiring that comes from connecting the media player to the display and the media player to the power. You simply plug and go. And, if you integrate the motherboard with a cellular card, much like MediaTile, it's even more simplified.

I have heard mixed opinions on the integrated/all-in-one digital signage units. It seems there are those who're bent on their small form-factor compys are all against all-in-one signage display units. Personally, I can see why some are in opposition. Apple would be opposed, of course, since they are still making clams from companies like Nanonation and Helius who provide the mac mini as a digital signage player. But even Apple knows that combining and integrating generally always has great benefits--hence Apple's hold on the software + hardware combo...But that's a thought for another day.

A friend, external to the industry, made the statement, "it seems to me that digital signage is one of those 'bleeding edge' industries that is getting a lot of hype at the moment." While many of those who actively pay attention to the industry information portals would disagree, I believe I am not too assumptive in stating that digital signage is still on the "bleeding edge." Not that the technology is particularly new, or that we're seeing only "gear heads" as industry champions, but because it's an industry still in its infancy--an industry which still subsists on VC and angel funding.

If you're wondering what constitutes a "bleeding edge" technology, you may wish to consult with Wikipedia:

Bleeding edge is a term that refers to technology that is so new (and thus, presumably, not perfected) that the user is required to risk reductions in stability and productivity in order to use it. It also refers to the tendency of the latest technology to be extremely expensive.

The term is formed as an allusion to "leading edge" and its synonym cutting edge, but implying a greater degree of risk: the "bleeding edge" is in front of the "cutting edge".

Problems with the "bleeding edge"

Unproven, unproven, unproven. Not unproven in the eyes of industry leaders, but more importantly--unproven in the minds and hearts of customers and clients. And, isn't the customer always right. [George E.] "Scott has done in the country what Marshall Field did in Chicago, Wannamaker did in New York and Selfridge in London. In his store he follows the Field rule and assumes that the customer is always right." Hence, thinking a technology is proven, when in fact, it is not (think of who's right again) is dangerous because you're blinded from seeing things as they really are. A great example of not getting the full picture was pointed out by Dave Wienfield in his recent critique of an OOH investor on ABC's "Shark Tank." To understand the bleeding edge further, let's consult with Wikipedia once more:

A technology may be considered bleeding edge under the following conditions:

• Lack of consensus — competing ways of doing some new thing exist and no one really knows for certain which way the market is going to go.
• Lack of knowledge — organizations are trying to implement a new technology or product that the trade journals have not even started talking about yet, either for or against.
• Industry resistance to change — trade journals and industry leaders have spoken against a new technology or product but some organizations are trying to implement it anyway because they are convinced it is technically superior.

The rewards for successful early adoption of new technologies can be great; unfortunately, the penalties for "betting on the wrong horse" (e.g. in a format war) or choosing the wrong product are equally large. Whenever an organization decides to take a chance on bleeding edge technology there is a good chance that they will be stuck with a white elephant or worse.

And, then there is the proof of effectiveness. I have a good friend who worked for five years as a creative at Disney in Orlando, FL. About three years ago, Disney decided to do a small television network which would act as a corporate communications device to employees. These screens were placed in all of the break rooms across Disney's wide complex. For about four months my friend was responsible for extremely regular updates to this small internal signage network. He would create new content and perform a sneaker net upload to the screens several times a month. Once he complained to superiors that no one was watching the screens and that his efforts were going to waste (he had an interest in them and thus would watch and see if anyone was looking while in close proximity). Because he was not a Disney "yes man," voicing his concerns brought a negative response from his superiors, "Of course they're effective, people love them!"

As a personal experiment, this pal of mine decided to perform his own survey of the Disney employee break room visitors to see what information he could glean. While his survey was probably contained errors and lurking variables and was not a simple random sample, it did give some interesting insight. He found that although people knew the screens were there, almost no one watched them and an even less than half of one percent could even perform any type of recall at all. Talk about disheartening!

His mind is still not sold on the idea of digital signage being a 100% effective tool 100% of the time. But, interestingly enough, he now spends a good majority of his time focusing his content creation efforts in the digital signage field.

Ironic huh? I think the greatest issue digital signage faces is not the economy, but the proof. Prove to me that XX% saw the loop and that their view time was XX:XX. I know that even the most effective content, coupled with a proper installation, along with a proper loop length will still only reach a hyper small fraction of what has often been referred to as the captive audience. And then there are the recall rates--whose percentages shrink the effectiveness down even further. Not to mention the actual sales revenue increases that effective signage supposedly can offer. I could go on, but I'm sure those of you who actually read my posts are probably a bit angry at me by now.

Bandaging the "bleeding edge"

Now you can say Nate Nead is a pessimist. I would much rather hear "realist." However, over-optimism can be a precursor for bankruptcy court--something none of our friends in the industry want. I recently watched--for the umpteenth time--"Rudy" with Sean Astin. I simply love that movie. At the end of the movie Rudy decides to give up his dream of performing in at least one game of Notre Dame football because he doesn't make his complete goal. In other words, he shot for the moon, but hit the stars. His older friend, the landscape manager, gives him a few words of advice, which I believe are fitting here. "You're five foot nothin', a hundred and nothin', and you've come out here and played football with the best team in the land! In a hundred years you don't have to prove nothin' to nobody except yourself!"

This is how I feel about digital out-of-home. Proof must come from within before we reach out and try to force others to believe. Pilots with feasable numbers must become more frequent. Case studies need performed on many more projects, and pilot program stats need to be performed more by those from without and shouted less by those from within. If the medium works, it will prove itself in time. If it doesn't, all the shouting will may just make us all horse.

Because I feel we're sometimes dealing with a luxury item, and that digital signage is more often about increased ambiance, it's hard to see the current economic situation as a lighted candle. However, we DO seem to be surviving through the drought. Although it seems as though this survival is somewhat unnatural--given the fact that venture funds seem to currently make up the industry's "revenue"--it may be a good thing that champions from without see potential in owning digital real-estate for when the dearth abates. Otherwise industry maturation may bring your organization to its knees in a veritable business seppuku. My advice: husband resources, reduce costs within your organization, reduce prices without, keep moving, and don't assume that the touted 100% growth in five years means your company is going to experience it along with the industry at-large.

DigitalSignage.com has never claimed to be the premiere industry news and information source. However, we do, by virtue of where we sit on the various search engines, glean quite a number of monthly leads and eyeballs for from those seeking solutions. As a result, we are now opening our site up for partnerships for advertising and lead sharing to anyone within the industry that wishes to expand their existing business. 

We realize you can choose to advertise elsewhere. And we feel it is necessary to utilize several ad methodologies. However, let me use some salesman tactics on you for a moment. 

• A single trade show can cost between $5,000 and $100,000 (depending on the size of the show and your particular involvement). Trade Shows are great for both brand recognition and lead generation. But how many viable leads have you received from trade shows? 50? 100? Imagine receiving 100 + leads monthly for a few bucks a day. 
• People who search for "digital signage" solutions on the web, don't click through to page 2, and especially not page 3, unless they are really doing some digging. More eyeballs mean more brand awareness. But awareness + contact information means you'll have more sales. Which is the ultimate end to justify your advertising means. 
• While Google PPC can be effective, it's also clicked on about 1/10th as much as organic search results on the Internet. Pay-per-click is also an expensive method for driving traffic in our industry. You can see some information on "digital signage" keyword competition here. 
• You may say, "well, many of my pre-existing leads have been drying up due to recessionary trends." While this is certainly true, keep in mind that when things start to pick back up, you want to be top-of-mind to those who have investigated this niche previously. Meaning, you not only need to advertise now, but you also need to be interfacing with potential customers now. To do that, you need names, emails, and phone #'s, which we are offering on an unlimited basis for a flat monthly rate. 

The quote in the title of this post was originally attributed to Henry Ford. In his day, Mr. Ford was known for his innovation in production and manufacturing. Ford was not a success because he necessarily had the best quality product. But, Ford held a strategic advantage. Therefore, he had the ability to limit aesthetics because his prices flat-out beat the competition. Contrastingly, when there is no strategic advantage, wide arrays of products--with competitive prices--put power back in the hands of the consumer. Digital signage vendors are no exception to this rule. With so many more options for software and hardware to choose from, the days of "you can have any signage media player you want as long as it's ours" are over.

Separating Hardware and Software Sales

At times I feel digital signage software companies are unable to grasp the business principle of specialization. I have said it before and I'll say it again, "a specialist always beats a generalist." This is a fundamental principle not practiced enough, especially in our industry. And those who provide screens, mounts, players, software, content, and the frosting are spreading themselves too thin. They're not focusing on a single core competency. 

Perhaps this widespread issue can be blamed on systems integrators used to working out all the project nuances. If you are an integrator, you know of what I speak. The problem I see is that too many companies have the mindset of let's make money from every possible angle. And, with the way the general market is looking it may be tempting to "milk" the leads for all they're worth, but it can be simultaneously detrimental to lasting success. 

I've been reading a great book lately entitled "Value-Added Selling." The book goes over some very interesting points about how markup in specialization is much more profitable for the masses than markup in generalization. Specialization allows you to focus on keeping costs low for your niche, thus making a greater profit while selling at a competitive price point. The takeaway is this: specialize, specialize, specialize. While it is counter-intuitive to think this way, sustainable longevity requires it.  

Biz Models, Not "Model T's" 

Of course we could always play the devil's advocate here and argue that Apple is a good company to mirror. Since Apple provides both the hardware and software for their customers, digital signage software providers can mimic. That's a decent argument, except when software eventually transitions to the cloud. Has anyone heard of digital signage moving to the cloud? I sure hope so, because that is where we are going. 

While the "Model T" approach worked at the outset of the automobile manufacturing era, it would be foolish to adopt such a business model today, unless your prices were able to match those of the early automobiles. Digital signs are no exception. If you're reimaging a small PC, clients are going to know that 80% of the $1,500 MSRP is markup. They will quickly be on the horn, looking for products elsewhere. They know they could get a hosted solution for four years and a economic media player from a specialized vendor for less than your MSRP. It's true that "whole products" are reserved for the mainstream, a market segment I've spoken a lot about lately. However, "whole products" doesn't mean you provide the display, the mount, the player, the software, and the content creation. It simply means, you make procuring those necessary pieces easy and cost effective. 

Rules of Thumb to Follow: 

• If you are a software development company, develop and sell software. 
• If you provide media players and other peripherals, keep it up. Leave software to the software providers. 
• If you are an integrator, integrate (these saps are the ones who're bringing it all together). 
• If you focus on displays--do displays.