December 5, 2019
By Andy McRae
When asked a year ago about the developing trends for 2019, the author was forecasting a definite convergence of the digital signage and audiovisual (AV) industries as an obvious trend. In looking back at the past year, this was definitely the case.
This was certainly not the only trend, however. There has also been industry expansion, significant technological advancement, increased merger and acquisition (M&A) activity, maturation and, consequently, many exceptional digital projects resulting in continued growth.
Throughout 2019, there was a marked increase in the number of projects that combined digital signage and audiovisual; however, these blurred lines have expanded to also include mobile, digital out-of-home (DOOH), and place-based media—or to be more specific, revenue-generating networks. The industry is seeing the arrival of a visual communications industry that includes all channels of communication whether digital or static, internal or external, informational, or revenue generating. As a logical consequence, there was some significant consolidation in the industry as companies acquired others to offer as much of the visual communications pie as possible.
Another indicator that the industry has matured is the increase in the number of renewal projects many companies have been seeing. In fact, this year, the author’s company was asked to work on many projects to replace end-of-life equipment, supplement existing audiovisual devices to include digital signage components, or help develop an ongoing content strategy to better take advantage of equipment that had already been installed. It is a welcome change to see companies renewing their networks instead of turning them off.
Clients understand the technology and have fully embraced the concept of developing a content strategy based on measurable business objectives to ensure they get the best network for their needs. As a result, many spectacular digital installations the author’s company anticipated last year have now become a reality.
System integration and the introduction of many effective measurements, including those that are mobile-device based, allow clients to truly determine the value of their networks. The sophistication of many projects has increased. System and data integration are now a part of every deployment. In addition to some of the old standards, like really simple syndication (RSS) feeds and emergency messaging, the industry can now include integration with internal systems, which allow for real-time content changes based on customer key performance indicators (KPIs).
For example, this past year the author’s company deployed several networks for property owners that included employee and customer communications, audiovisual, and a revenue generation component. More and more of these companies are looking to programmatic ad buying as an opportunity to generate those elusive ad dollars without turning over the whole network to a third party. While significant progress has been made, no system is bulletproof. Effective reporting, a lack of creative standards, and management
of the approval process are just a few of the challenges that are being dealt with.
In a previous article, the author discussed the importance of getting to the point where costs of the solution are low enough and the capabilities of the technology great enough to make digital visual communications must-have, not nice to have. In 2019, the industry has hit this point as more and more conversations are based on the value of the overall solution and not entirely on the cost of the components.
There was plenty of concern about the impact of trade wars and tariffs on the industry at the beginning of the year, and it would be difficult to say this has not happened. There has been some price increases on products from China, and the uncertainty has almost definitely caused some delay in the sales cycle. In fact, Display Supply Chain Consultants’ (DSCC’s) Quarterly Display Supply Chain Financial Health Report, released in September 2019, paints a picture of declining revenue over the past several quarters for the major display manufacturers; however, this is likely caused by a myriad of factors, not just trade wars and tariffs. That said, most signs do point to continued sustained growth in the digital signage market and certainly in the out-of-home (OOH) and DOOH industries.
According to new research from PQ Media, global OOH advertising revenues, including all digital, traditional, and ambient media platforms, increased an estimated 7.5 per cent to $55.99 billion in 2018, the fastest growth rate in 11 years. To complement these numbers, in PQ Media’s Global Out-of-Home Media Forecast 2019, analysts anticipate a further 8.5 per cent growth surge in 2020.
Looking forward to 2020, the market will continue to see more advances in the technology that benefits the industry’s businesses. The continued rollout of 5G (the next generation of mobile broadband that will eventually replace, or at least augment, the 4G LTE connection) will lead to much improved connectivity and an expansion of Internet of Things (IoT)-enabled devices triggering content. Hand-in-hand with the growing sophistication of digital networks, the industry can expect to see an increase in deeper system integration that triggers specific content based on real data.
Significant development in display products like flexible light-emitting diode (LED) and liquid crystal display (LCD) panels will allow the industry to deploy networks in physical locations that were previously thought to be impossible. Quantum light-emitting diode (QLED) 8K signage using artificial intelligence (AI) upscaling technology has also entered the market, delivering stunning visuals and a much more immersive viewing experience. Content creation is also developing alongside technology. More instances of augmented reality (AR) and virtual reality (VR) are being seen as networks become more and more focused on the customer experience.
The incredible will become the norm, and the impossible will become the incredible. Prices continue to drop as technology continues to advance. The outlook for the industry is continued growth, ongoing M&A activity in the sector, and further expansion of the visual communications industry.
Andy McRae is general manager for Dot2Dot Communications, a full-service visual communications company that designs, develops, and manages immersive digital signage experiences. For more information, visit www.dot2dotcommunications.com.
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