The Digital Signage ExpertBackground
Florian and Oliver Schwede founded their consulting company in Munich, Germany over 10 years ago. They have worked across a varied spectrum of industries. With the introduction of the digital signage industry, the have focused on this area specifically over the last 4 yours.
Their work and concept has placed them along the leaders even when looking from a global perspective. Their customers are true blue chip.
Concept
They walk their clients through to success by addressing the four fundamental pillars every corporate depends on.
1. Consulting
2. Research
3. Communications
4. Events
Omit any one of these factors can seriously impact on the outcome. Their work is almost done in real-time. No regurgitated figures but pure hard cold facts. They are the navigators who will tell you when to fly and what areas to avoid.
Invidis and OVAB Europe
* First Pan-European DOOH association
* Cooperation with OVAB US (DPAA)
* Founded 2008
* 20 member and growing
* Outlook for the digital signage industry is positive and is already well on the way to becoming a major sector. Awareness is growing and it is thanks for OVAB that this is being underlined.
Pointers
Florian provided a wealth of information worth a fortune. No speech notes were shared nor slide shows. Much of the research quoted was proprietary and if you had a photographic memory you would walk away very wise.
Growth
A medium growth rate in DOOH of 20% CAGR was experienced between 2002 to 2007. It is interesting to note that traditional OOH and advertising in general grew at a growth rate of 7% and 5.8% CAGAR respectively during this period. Thus pure advertising has been the slowest growing sector over the last five years and losing market share.
Digital Signage has had an overall growth rate of 27.5% recently. However seen from the static advertising markets vantage, this is still small. The only stronger sector was Online/Mobile with 37.7%. The figures make this at present one of the fastest growing media sectors. Globally the market is expected to reach $10.65 billion by 2012.
A supporting forecast is that ad spend for Europe is expected to reach 626m Euro this year. The core trend to support this outlook is DOOH’s high market share from 30% in 2008 to an expected 45% in 2013 based on the US market trend.
Sales
The main issue from a sales point of view is that those in the trenches still speak a technical language. The advertising market does not understand the jargon used. The result is resistance. It would be advised to change the approach.
Recession
In 2009 not a single EMEA country registered growth, this understandably pulled DOOH down also, and strongest losses were felt in Russia, Spain, Italy and the UK.
DOOH
Digital Out Of Home could produce 3 to 10 times more revenue than static formats, however the costs are on average 6 to 7 times higher. This, together with tech-speak, needs to change for the industry to prosper.
OVAB – DBCI
Invidis is very active in the above noted associations. Each year about 300 companies take part in meetings and round table discussions to share knowledge. The recent debt crisis has been a factor stopping growth this year in the Mediterranean countries. Scandinavia was still a major leading growth area.
The DBCI (DOOH Business Climate Index) is calculated by invidis on a quarterly basis on behalf of OVAB Europe. The data is assembled from 350 leading European digital signage market players under regular survey of market conditions within their companies and 6-month expectations. The index is consulted by private equity fund managers for placements.
Italy
The latest spanner in the works has been to introduce a Digital Signage Tax. With the debt crisis in full swing, Italy’s prospects look dim. It is expected that Spain and Portugal to drop in the next quarter.
This didn’t fare well in the industry because of the economic climate dropping from January Q4 to April Q1 by over 40 index points. Althou8gh orders remained on the books; the sign-off will be with marked delays. The general debt crisis is no doubt the major influence in this run sparking over to Span and Portugal as well.
UK
OOH ad spend is at 10%, however when one factors out DOOH then we are looking at only 1% of the total market, this provides plenty of scope for expansion. Invidis numbers show however that within that sector in the UK the growth rate is phenomenal at 45%
The Future
* DOOH as an industry isn’t established yet
* Media buyers unsure of the industry
* Industry sales teams don’t speak media-talk
* metrics and media currency not yet set up
* DOOH complex to plan and buy
* DOOH is being affected by four market forces. From the top we are now experiencing the entry of the giants, that is Microsoft and Google, who will try to domineer this sector. The arrival is expected in 3 to 5 years. Because of generally falling prices and buying power, orders for hardware and software will be very price sensitive. The strong threat from the mobile market is already rising because of low CAPEX and established infrastructure. Extreme competition from the supplier sector will distort projects. The industry is already boiling with a mixture of pure software vendors and hybrids of every kind.
* Trends are for a 23% in digital signage costs (Screens, hardware, equipment & Network management), with 50% drop since 2004 already factored in.
Top 10 trends for 2011
* aggregation
* Saas dominance
* separation between CMS and distribution
* Hardware CAPEX falling
* Venue pricing – CPM replacement
* interactivity
* mobile interactivity
* Entrance of specialists
* RSS out, dedicated content in
* Retail, Outdoor and Mall growth
Summary
Invidis proves that with proper research and awareness a coherent battle plan can be drawn up. With a partner at your side that understands all aspects of the industry you will feel confident in weathering the storm.
At the moment the EMEA DOOH market is unaudited, probably due to missing measurement standards on which to measure. Thus assumptions and forecasts are based estimations from best practice.
One of the idioms of the marketplace is that the technology in question is not purely used in a retail setting. Thus private internal communications networks are often even reported in the press. As they carry no advertisements, little is known of their performance.
Invidis let’s the numbers talk. The word is, EMEA DOOH will grow, but in single digits in 2010, whereby traditional advertising channels will drop equally. The question here is, are we in a pole shift? Will this be the watershed year?
Want to talk to invidis?
Contact;
Florian Rotberg
Managing Director invidis consulting GmbH
Florian.Rotberg@invidis-consulting.de
+49 89 2000 416-11
James van Etten, Executive Editor, CLIPPINGs