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Our current outlook for the Digital Communications Network market ("DCN") is generally positive. Many new programs are being considered in various markets and industries. Yet activity does not necessarily lead to revenue, and we remain conservative in terms of making market-growth predictions.
I am writing this muse following a wonderful week visit to the U.K. During this time, we met with many industry participants. In the U.K., the apparent failure to generate significant advertising revenue streams has blunted new retail deployments. We believe that our British friends could benefit from proposing non-ad supported business models to their clients. Notwithstanding, inroads in some ad supported verticals in the U.K., such as hair salons, pharmacies, non-governmental managed post offices, malls, and pubs, for example, are being made. We see this same pattern in ad-supported businesses developing in the U.S., where broad-based ad programs are not materializing, but specific verticals with a more localized focus appear to be gaining traction.
Retail deployments in the U.S. in general, while active, appear to still be moving slowly. We believe that this situation will reverse itself, but not necessarily before 2008. This opinion is being driven, in part, by the fact that we see a slowing in the U.S. economy, and believe that DCN's will be losers in the retail quest for budget allocations.
Other markets, however, are more robust and beginning to open. South Africa, China and India present interesting opportunities. Industries beyond retail, such as governmental, financial services, and out-of-home, also have promise. In addition, many large, well-capitalized multi-nationals, with lots of clients in-tow, are starting to get serious about DCN's.
We suggest that resource investments be carefully considered by market and industry. The "we do it all", "we provide an end-to-end solution" approach will not, per se, lead to the Promised Land. In addition, for now, we generally suggest avoiding putting all of one's energies into the U.S. market, and in tradition retail markets, specifically.


It's the Economy, Stupid

By Steven Keith Platt Another year ends; anew we begin. A time for parties, resolutions and, of course, predictions. So from an office in a small suburb of Chicago, Illinois, USA, I here advance my thoughts on the direction of North American digital communications industry for 2008. Year after year, we hear that same old self-serving song: “next year is the tipping point” for adoption and deployment of digital communication networks. I am not myself sure that I know what a tipping point is, having never seen one. And, I note, with a degree of skepticism, that the majority of these choral members are industry vendors. Yet the question remains: what will happen in 2008 in the DCN industry? For starters, we here at PRI are extremely busy. Going into 2008, we have a huge backlog of very cool global projects for some major enterprise players. Most of the knowledgeable industry folks that we talk to are similarly busy, be it proposing to prosp

Platt Retail Institute Expands Research

Steven Keith Platt, Director, Platt Retail Institute, Hinsdale, IL continues to believe that the long-term prospects for the Digital Communications Network (“DCN”) industry are outstanding. “As the industry matures, each deployment success and failure leads to a greater understanding of short and long-term sector deployment prospects. For instance, while the outlook for deployment in governmental applications is outstanding, recent events indicate that such opportunities will not mature for a long time. Similarly, we have advocated that traditional advertising messages will not work in the vast majority of retail environments, whereas promotional content does. As a result of this ad model focus, the uptake for various retail applications is lagging. On the other hand, such advertising can be successful in various out-of-home (“OOH”) environments. Due to this and other factors, DCN deployments in the OOH market are accelerating. “...

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Bringing Research to Retail

Economists define a recession as two consecutive quarters of negative growth of Gross Domestic Product. Before this officially occurs, it can sure feel like a recession. Like right now. Our economist friends won’t officially pronounce that the  U.S. economy is in a recession for another couple of months. But putting lipstick on a pig does not alter the fact that it is a pig, or a recession.    You might now inquire as to how we managed to find our way into this (or, as stated by two other noted economists in 1930 “this is another fine mess you have gotten me into,” MGM Films). The next logical question is, of course, how deep and how long? At the Platt Retail Institute, we like going out on a limb, because economic forecasting is not our day job, and we can’t get fired if we are wrong. Hey, at least we take a position. In any case, our response is a very straight forward: not very deep and not very long. Here is why to both.

It's Not All Out-Of-Home

As advertisers begin to shift dollars to digital communication networks ("DCN"), issues concerning ad effectiveness and pricing arise. To address this, some DCN operators are advocating that traditional media metrics be applied. The rationale for this position is that such measures are well established, and that rates currently exist for comparing media. Thus, it is presumed, advertisers will be more inclined to purchase time on a DCN due to familiarity of metrics and ready comparisons. But this one-size fits-all approach fails to consider that different DCN networks should be evaluated differently. Some DCNs look more like out-of-home mediums then others. For example, digital signs in a bus or at an airport are clearly out-of-home, and should be so measured. But in-store signage is a different, more consumer segment driven medium. When considering a DCNs impact inside a store, bank or certain other retail outlets, better measurement models are available. And applying ol

This month, we kick off our monthly muse for Digital Signage Weekly. For the May issue, we are introducing our Fifth Working Paper, titled Impacting the Customer Experience at a Bank Branch through a Digital Communications Network. The Working Papers Sponsors include the following: Digital Retailing Expo; DigitalView; Diversified Media Group; GlobeCast; NEC Display Solutions; POPAI; Reflect Systems; VideoMining; the JC Penney Center for Retail Excellence at Southern Methodist University; and the Center for Retailing Education and Research at the University of Florida. The retail banking business is extremely competitive. Compounding this, consumers consider banking products and services to be commoditized offerings, essentially all being viewed as somewhat the same. Due to the competitive nature of the industry on the one hand, and the homogenized view of its product and service offerings on the other, retail banks are challenged to develop meaningful marketing activities to ensure ne

Networking Capital

The 4th Digital Signage Expo held this past May in Chicago was, by all accounts, a huge success. Attendance was up over 60% versus 2006, and 110 companies exhibited, for a 20% increase versus the prior year. Adoption of Digital Communication Networks (“DCN”) is growing both in the U.S. and internationally, and new markets, such as out-of-home, are becoming more active. Another interesting indicator of the overall health and direction of this industry is the amount of capital that is now finding its way into these businesses.

DSW For April 2007

We have received a great deal of interest in our market research offerings. We are working with the Platt Retail Institute, a leading retail research and consulting firm, located in Hinsdale, IL, to offer PRI's research papers. A brief description of these Working Papers follows. Interested parties can email me at dkeene@nbmedia.com