Earlier this week I had a serious case of déjà vu while talking with a leading digital signage industry consultant. As he was sharing with me a growing concern that the digital signage industry was losing momentum, I was reminded of my experience with the birth of another industry nearly 20 years ago.
In the early 90’s, cellular data technology — wireless data as it was called then –was brand new. With the technology’s creation, industry associations were formed, conferences were produced, magazines were started, consultants emerged and wireless data startups were launched at a break-neck pace.
The country’s leading market research firms quickly forecast the wireless data industry to be worth billions of dollars. At conference after conference, industry pundits, of whom I was one, spoke of the business-changing potential of wireless data.
Every new wireless data deployment became a poster child of the technology’s success. Despite a decent number of wins, however, the industry never seemed to fulfill its growth potential. That didn’t dampen the industry’s optimism though. The beginning of every year brought with it the same familiar cry: “This will be the year wireless data takes off.” But it never really did – at least not for a very, very long time.
The lack of meaningful progress finally caught up with the industry. Company after company failed. Those that survived were absorbed by larger, more established entities. Consolidation was rampant. The most common explanation for the industry’s shortfall was this: “They (the prospects) just don’t want to take the time to understand it.” (This, by the way, is what I hear today from many within the digital signage industry.)
Looking back, the problem with the wireless data industry was two-fold: 1) There was no “killer application.” 2) The market was distracted.
Oh yes… the “killer app.” Wireless data had no killer app; that one thing that would make its adoption a “no-brainer.” Without a killer app, vendors struggled to convey a value proposition that customers could easily understand. Because prospects couldn’t easily understand it, they largely avoided it. (What was true then is still true today: Prospects are busy and don’t have the time to be educated/convinced that some new solution is their savior.)
It is often said that timing is everything. Unfortunately for the many companies that were selling wireless data applications, the timing was bad. Concurrent with wireless data’s emergence was the beginning of the Internet. The Internet, unlike wireless data, had an easy to understand value proposition and accommodated literally hundreds of killer apps. The market was distracted. Wireless data was not nearly as exciting and compelling as the Internet so companies largely avoided wireless data while putting their money on the Web.
It was not until Apple’s concurrent launch of the 3G iPhone and the iTunes app store in June of 2008 that wireless data really took off. (See my Mobile Trends white paper for an explanation.) It took nearly 17 years and the launch of the mobile eco-system before wireless data opportunities exploded.
The parallels between digital signage and wireless data are, to my view, almost identical. Most digital signage implementations lack the killer app and heaven knows that advertising sure isn’t it. Digital signage is also being launched at a time in which the market is being distracted by – get this — wireless data (e.g. smartphones and mobile apps.)
So based on the lessons from the past, what does a digital signage company do? I believe it’s as simple as this: If you can’t beat them, join them. That means, look to mobile for success. I am.