Sizzle... or Fizzle?

For reasons previously discussed, we took a small space at The Digital Signage Show in New York this week, bought a new pop-up display, and gave it a shot. It was a good decision and a good use of time and money, but that is a topic for another post. We were sandwiched between Samsung's large booth (super nice video wall and some neat content) and what appeared to be a new display vendor, VUKUNET. One wall of their booth faced us directly, sporting a gorgeous 80" HD display in portrait mode with breathtaking still images rotating throughout the day. There was also a large format LED display, a projector/screen getup that looked nice, and a bunch of conventional LCDs. I was not observant enough to figure out the hardware was all NEC, so I was really caught off guard when someone laid a press release on the table and revealed that VUKUNET is in fact NEC, and they were introducing VUKUNET as their entry into the advertising market. After pausing momentarily to schedule a snipe hunt for next week, I read on. The press release was remarkable in its restraint, waiting for the third paragraph to say that this will "...address all the issues in this space..." All righty, then.

I think Dave Haynes captured the gist of most peoples' reactions in his post here. Suffice it to say that there is every reason to be skeptical of a display manufacturer stepping simultaneously into the worlds of advertising and software solutions. It may actually be a good piece of software, although I am told that demos were not forthcoming and that screen shots would have to suffice. But no matter. This venture raises more questions than answers, solves the wrong problem, solves it in the wrong way, and will likely be a tree falling in the forest with no one to hear it. Here's why:

1. Solving the wrong problem. VUKUNET purports to be the game-changing solution that allows digital signage networks to make themselves more attractive to advertisers. This is accomplished by becoming part of a network of networks, from which advertisers can buy of as many or as few screens as their campaign warrants in a single transaction. A fine idea, but not a new one: I think it is known as aggregation. VUKUNET approaches aggregation as a delivery vehicle (more on this later), whereas others have approached it as sales vehicles. The problem is not ad delivery, at least not today. The pervasive problem in digital signage is ad sales. There is an ad sales problem because advertisers are concerned about issues such as measurement and compliance. Our industry has a lot of work to do to make advertisers comfortable with operational standards across platforms, network owners and verticals. The ad buyers care much more about whether the ad plays properly when and where it was promised than how it got there.

2. Solving it the wrong way. VUKUNET claims to be platform agnostic, as long as the platform is Windows-based and is open to installing their software on the media player, and giving over certain controls to that tool. They apparently believe that their solution is so compelling that network owners will retrofit and maintain their media players with this plug-in. Here is what they don't seem to understand: Google AdSense, who Mr. Haynes posits as NEC's aspirational role model, works using a plug-in inside published content. You sign up, paste the code on the appropriate web pages, and it works. And it is truly browser- and publishing tool-agnostic. The VUKUNET paradigm is to insert proprietary software tools across numerous software platforms, most likely running on numerous versions of Windows. (That they ignore Linux platforms is a minor transgression in the scheme of things.) If I have read the release and web site correctly, they are suggesting that their software will have a role in the critical function of playlist playout. This is core function, folks. The chances of a rational vendor allowing third party software to coexist with its own software at that core level are quite low. I may not be widely regarded as rational, but I can only imagine the fingerpointing that would ensue when the first software hiccup or version change occurred at the player level. I will have to use my imagination with that scenario, because it won't ever happen here.

The right way to solve the problem would be a twofold approach. First, I believe that a third party certification service will have to emerge that would give the equivalent of a Good Housekeeping seal to participating networks and software providers. They would take on the task of vigorously measuring and monitoring operational and technical compliance, and thereby assure advertisers that they have a very good probability of getting what they are told they are buying, and that the post-campaign reporting is accurate and complete. Second, the cross-platform delivery "problem" will not be solved by a silver bullet software plug-in. It will be solved by establishing a standard format for ad placeholders that can be updated/changed/skipped dynamically within a playlist. These steps work to solve the existing problem first, and then create a standard content format that allows each software platform (even those that run under Linux) to properly receive ads from a cloud-based server and track playout in its own environment. NEC's apparent need to own both delivery and verification inside someone else's environment is hard to understand. Making the content smart is a better approach than trying to interoperate with dozens of software platforms.

3. More questions. Why will this approach to aggregation sell more ads? It won't, because as noted, delivery is not the issue. Yes, NEC promises to field plenty of ad sales professionals to fuel their planned network of networks. But they will learn two things very quickly. First, that there are plenty of unemployed ad pros available to hire (for a reason); and second, that the agency game is a relationship business, and despite the fact that NEC is a great company with terrific products, their imprimatur brings no sell-side credibility to the advertising world.

If getting other software providers to play nice is potentially important to the strategy, why offer free content management software to VUKUNET participants? A cynic might respond that the decision was taken after an intensive evaluation of the NEC CMS product. Or perhaps that they are hedging their bet with regard to software vendor cooperation. Or that perhaps they are aiming at the large number of small networks who run on proprietary platforms or some sort of pseudo-freeware. Or maybe they are trying to overcome hardware pricing and currency advantages that their Korean competitors are enjoying. In any case it is a puzzling piece of the story.

While the announcement caused quite a bit of buzz, a closer look at the strategy reveals that the concept, which has merit at a high level, did not translate into a transformational solution. The approach demonstrates an apparent lack of understanding of both the fundamental problem and the digital signage landscape itself. I wish I could buy into this as the fire starter for a frenzy of ad placement activity in the space. That would be great for everyone. Unfortunately, it looks a lot more like self-immolation from here. For a contrasting approach to strategic thinking, listening to customers and leveraging internal strengths, read about Christie Digital's introduction of MicroTiles display technology.

NCR-Netkey: Another Brick in the Wall?

News of NCR's deal to purchase the assets of Netkey is of course an interesting, but not unexpected development. While it is still early, and details have not been provided or leaked beyond the official press release, it is worthwhile to examine what we know and to assess the implications.

NCR has a long history and a longer client list in retail as a result of its core business. After all, NCR once stood for National Cash Register, which dates it somewhat, since the term "cash register" disappeared from the retail lexicon long ago. Today, a cash register is an electronic cash drawer with limited capabilities. The vast majority of retailers of any scale moved decades ago to "POS applications", which are intelligent, connected and integrated with other core retail systems. NCR, of course plays in the POS space now, and they understand store-level integration as well as anyone. They also play heavily in the kiosk and ATM space, and have significant market share and presumably existing relationships that could be leveraged for additional business. NCR has made other kiosk-related acquisitions in the past, including Kinetics (airports), InfoAmerica (QSR) and Tidel (ATMs). The Netkey deal would position them more solidly in the retail space, where Netkey has garnered quite a few nice kiosk clients. Given that, the deal makes great sense for NCR from a kiosk perspective.

While the Netkey website now refers to itself as "NCR Netkey", the guess here is that the Netkey brand will disappear completely once the current client base of Netkey is appropriately notified, stroked and otherwise assured that they will be served as well or better than in the past. NCR has learned over the years that it prefers to leverage its own brand and sub-brands rather than integrate the brands of its acquisitions. This is common practice and Marketing 101 for big companies. The structure of the deal, an asset purchase, is similar to the structure of the Tidel deal, in which NCR did not buy the company, but rather the Tidel Engineering subsidiary of Tidel Technologies. This deal structure would appear to leave some element of the acquired company (perhaps any existing debt?) in the hands of Netkey shareholders, although it may merely be the preferred form of transaction for NCR from a taxation perspective.

The fit of Netkey's kiosk base is obvious. The plans for the digital signage pieces, which Netkey added when it acquired Webpavement in 2007, may be a bit murkier. Given that the NCR headline refers to a solution that includes both kiosk and digital signage capabilities, it would seem that they now own the digital signage assets outright, and plan to go to market with them. However, this leads to a few additional questions that will probably be answered in the coming weeks. First, the NCR site already touts digital signage as an offering, reportedly utilizing Cisco's solution. If that is the case, is NCR about to change digital signage horses, or go with two entries? One would assume that NCR would make a switch based upon a belief that it hitching up to a stronger, faster horse. Further, if they are going to go exclusively with the Netkey offering, will they limit themselves to combined kiosk-digital signage deals, or attempt to compete in pure play digital signage deals? Will NCR invest in the ongoing development of the digital signage tools, or focus on the kiosk software that it clearly coveted? How NCR spends its marketing dollars post-acquisition will be telling.

Netkey shareholders presumably made a deal that they found to be both timely and palatable. The Netkey team members that I have met are good folks, and hopefully come out of the deal in good shape. NCR added to its arsenal in the kiosk space, and will now grapple with its go-forward digital signage strategy. In any case, this is another brick in the digital signage consolidation wall, as Netkey leaves the ranks of the independents. As long anticipated, both networks and solution providers are now beginning to be rationalized. Having a huge technology company like NCR buy into the space is yet another sign of an industry approaching a critical stage in its development, and that can only be a good thing. There is an argument to be made that this was more of a kiosk software deal than a digital signage deal. Nevertheless, watch for more action in the coming months. Big companies tend to react to the moves made by other big companies.

Can We Take It Up A Notch?

I try to use this space to offer opinions, insights and discussion points of possible interest to all participants and observers in the digital signage space. I have a point of view, but I do not consider myself the voice of anything larger than myself. That being said, lately I have found myself shaking my head in disbelief based upon the actions and behavior of others around the industry more often than usual. We work in an industry that is growing rapidly, while still struggling to define itself, its semantics, its leaders and its future. As such, there is sometimes a real Wild West mentality out there. People think they can define the rules of the road to fit their needs, since there is no sheriff in town. The behavior of the bad guys casts a pall over the industry, impeding its to advancement.

I am not talking about lesser, all too common transgressions that occur routinely: ridiculous and misleading claims related to market share and deployments by software vendors; bad mouthing of competitors in the heat of battle; rip-off pricing for services and content foisted upon unknowing clients. I am talking about questionable ethics and lack of class that begins to stain our entire industry. It is time that people get called out for such behavior, and that we try to take it up a notch in the integrity department as an industry. Here are a few examples, some of which I have observed from a distance, one of which I have experienced first hand. They touch all elements of our space.

We have a reseller partner who takes great pains to reinforce the fact that his company is “vendor agnostic” and tries to match each potential deal to the vendor/partner who is most appropriate. In reality, that means whoever brought him in, or whichever vendor provides the greatest opportunity for margin (as opposed to success) in a given deal. Not shocking at all, and rather common behavior. Recently, we had an existing customer who was preparing to launch a new network. As the good negotiators they are, the customer took the opportunity to look at all the competing offerings, and agreed to let us provide a proposal once they had all the others in hand. An unusual situation, but one that is being handled with respect and open communication. Frankly, we aren’t worried. Lo and behold, we find out that our aforementioned “partner” has proposed a solution to our customer with a competing vendor. Certainly that is their right, but where I come from, a person with integrity makes a phone call, acknowledges the situation and acts, well, like a grown-up and a partner. Not this guy. He went slinking in, trashed the incumbent (that would be us) and proposed something that makes me laugh. We found this out from our customer. With friends like this guy, who needs enemies? Digging a little deeper reveals that this is his typical M.O. His goal is not to add value, it is to skim dollars from the unsuspecting. Good luck, pal. You have one less arrow to shoot now.

This past week, the intrepid Adrian Cotterill of The DailyDOOH exposed what appear to be ethically-challenged practices at DigitalSignage.com (link omitted intentionally). The web site operates as a so-called portal for digital signage information, and supports itself (at least in part) by selling “leads” that come through its site. The issue raised is that Nate Nead, who owns the domain and operates the site, is also employed by Helius as National Accounts Manager, according to his own LinkedIn profile. This fact is not disclosed on the web site, or in sales pitches to prospective lead buyers. Helius, for the uninitiated, is a digital signage solution provider. It also appears that Mr. Nead has, or at least had a position at Deploid, another solution provider and advertiser on his site. This too, is not disclosed. Prospective lead buyers would almost certainly be interested to know of such a clear conflict. For someone who describes himself as “obsessed with knowledge”, Mr. Nead clearly does not feel the need to impart relevant information when money is at stake. Smug and off-point comments posted by Mr. Nead’s lead salesmen (sic) and Mr. Nead’s silence on the matter to-date speak volumes. Caveat emptor. Caveat lector.

I was recently speaking to a person responsible for making decisions on hardware, software and services for a potentially large network. In the course of reviewing our proposal he was open about which vendors were “in” and which were “out” at that particular point in the process. One company who was identified as “in” surprised me, and upon questioning, he revealed that he was impressed by one of their qualifications. It turns out that they claimed responsibility for one of the larger and more visible networks of another company. They told him that they “did” the network “through the other vendor”. It was easy for an industry insider to see that their claim to the network is that they currently employ one of the other vendor’s former sales engineers, who worked on the network in question. The case didn’t involve my company, but I was furious. That is just slimy. I suggested that he call one of the executives at the company that actually owned the deal and ask for a comment. That ought to be interesting. Doesn’t anyone think that people will find out when you flat out LIE? I am still shaking my head.

Finally, there is the case of the wannabe aggregator. This person has designs on aggregating networks across a certain vertical. Suffice it to say that if the ringleader was that good, he’d still be at his last job. The scheme here is to present the networks as a single buy, and to utilize his “considerable” expertise in ad sales to bowl over the advertising community. He approached network owners that I know with his pitch, his outlandish claims, and one of the funniest, semi-literate contracts I’ve ever seen. His aggregated networks included public failures, small and unattractive properties, his own network that is “still under development”, and one that claims to have hundreds of sites, yet has many fewer actually working. The best word to describe the core properties is “distressed”. He needed the network owners he approached to add actual deployments and credibility. Unfortunately, when you lead with distortion, sleight of hand and delusions of grandeur, credibility will always be a stranger. His pitch fell on deaf ears.

We all exist in a very competitive environment in a tough economy. But it would help everyone if people redoubled their efforts to act with integrity and honesty. Some people just don’t have it in them, but most do. It is time for the good citizens to stick together, even if they compete, and to acknowledge integrity when they see it. It is OK to tell a prospect that one of your competitors is honest, or a good person, or that they have a worthy offering. Customers would rather hear respectful assessment than rote bad mouthing. Let’s resolve to take the discourse and the integrity level up a notch. It will make the bad guys easier to identify for everyone. And they will get run out of town.

Passion Trumps Skepticism

There is a lot to be said for persistence. The folks at JD Events, the conference organizers of KioskCom and the Digital Signage Show, have been after us for years to participate, attend or otherwise acknowledge their conferences in New York and Las Vegas. Our stance had consistently been that there were size, venue, timing and relevance issues. We felt that we didn't want to be lumped in with interactive vendors or those who claim to be the world class in both interactive and digital signage. There wouldn't be enough attendees focused on digital signage.

When Lawrence Dvorchik finally tracked me down this summer and scheduled a phone call to discuss the matter, I felt well-armed and had every intention to make it a brief conversation. However, when confronted with passion, energy and differentiation, I become a good listener. Those are three qualities we try to hang our own hats on around here. And to give props where they are due, Lawrence has all three. When the call was over, we had booked a small booth on the exhibit hall floor and agreed to participate in a couple of sessions. How did that happen?

The consistent theme that Lawrence leads with is that quality trumps quantity, both in attendees and content. They take the concept of qualifying attendees very seriously, effectively barring non-exhibiting vendors, rogue marketers, and other hangers-on from getting into the show. They want buyers on the floor, and no one else. They promise to bounce anyone who slips through the process and starts distributing sell sheets, producing media players, displays and other hardware from backpacks, or otherwise sub-optimizing the selling time for exhibitors. Basic trade show math says that if you source and close one decent lead from a show like this, then you have generated ROI from the effort. Anything beyond that is gravy. Having spent so much time at so many trade shows through the years listening to non-buyers and other vendors, my interest was piqued by their approach.

On the content side, sessions are closely vetted for content. To be fair, I think this is increasingly the case in all trade shows. Here, I am told, anyone observed doing any "selling" in their session is barred from future opportunities. Sounds right to me, and will hopefully become common practice.

The fact that the show is in New York at a pretty good time on the calendar actually removed some "risk" for us. We can always connect with customers, partners and prospects in the NYC area if the need to get a bang for our travel bucks surfaces. We hope to do all of the above at the Javits Center.

The size of the Digital Signage portion of the show (small) made it logical to take a smaller space than we normally would and still have presence. Anyone who is there to narrow the field of digital signage vendors will have the opportunity to visit all relevant exhibitors and have meaningful conversation. We welcome the opportunity and the context.

While we are there, we will try to add some value in the content portion of the show, presenting a Tech Talk on the Show Floor on Tuesday. On Wednesday, I will be moderating a panel on "The 5 W's of Advertising on a Venue's DOOH Network", with Leslie Armour of Tween Brands and Rob Hoyt of Seventh Generation providing their perspectives. Looking forward to great interaction with the audience at both venues.

Lawrence's passion and energy has turned us from doubters to engaged participants. It is a lesson in persistence and believing in your product, something we can all internalize. There is still a distance for them to travel to make a major splash as a pure digital signage marketing vehicle, but building a base on quality is one way to get there. I have a feeling it will be a busy and worthwhile two days. See you in The City.

The Third Leg of the Stool

In this space and in other articles and blog posts, the increasing signs of industry acceptance and maturity have recently been trumpeted and applauded. Most of the discussions have centered on flow of capital, corporate interest, technology advances, and consolidation of network and technology players. For an industry whose future is so highly dependent upon its acceptance as a legitimate competitor for advertising dollars, relatively little time has been spent looking at the mechanics of that side of the business. The same level of noise that exists on the network and technology sides exists in the advertising side of DOOH. Changes are inevitable if we are hope to win the hearts, minds and wallets of agencies and brands.

On a trip to New York City last week, I had the opportunity to meet with two people who work for digital agencies, both of whom have had significant exposure to the digital out-of-home space. A good conversation starter was Lyle Bunn’s timely piece, which conservatively estimated the number of unique ads playing on DOOH displays at 1,080,000. My opening position was that a million unique ads would seem to indicate that we have some serious traction and mind share. Both agency types responded the same way: the number may in fact be conservative, but it is hardly reason to pop champagne corks just yet. The issue, they said, is that from their perspective, the vast majority of the unique ads playing on DOOH displays today are actually local ads rather than national ads. The big national dollars that can flow to an entire network with the stroke of one pen are just beginning to look at DOOH in a serious way. We are talking about the brands that we all see on TV, on the web and in print, and these are the brands represented by the agencies, and they are still treading carefully. Media buyers are not risk takers by nature.

When pressed as to why the big brand dollars are flowing slower than anyone hoped, three themes became apparent: network profiles, channel conflict and execution. The addressability and targeting capabilities of digital signage networks is a two-edged sword. The fact that advertisers can buy, as Mr. Bunn puts it, “based on demographic profile, Designated Market Area (DMA), geography and even the activity in which they are involved (shopping, transit, café, workout, attending a game, etc.),” means that savvy media buyers are able to cherry pick venues even down to the zip code levels… and they do. Networks with locations of varying quality and value are finding that they can’t sell the whole network. In fact, they are finding that the incremental locations they deployed just because they could are actually becoming overhead rather than revenue generators. Networks need to consider what they are selling when planning their deployments. More is not always easier to sell. Quality DMA coverage, identifiable (and desireable) demographics and sustainable traffic need to be part of any decision to deploy to a specific location. Operators need to have a strategy as it relates to location selection, and some may have to rationalize what they already have to get maximum ROI. It is better to “own” a region, DMA, neighborhood or demographic than it is to shotgun several. Without doubt, the network aggregators have served a great purpose here. They are able to present multiple networks (or segments of multiple networks) efficiently to the buyers, which reduces the potential pain of making dozens of individual buys. But they have their own pain, as we will see.

The second theme is that of channel conflict. In their urgency to generate ad revenue, many networks have enlisted both direct sales teams and multiple aggregators and rep agencies. The major aggregators, Adcentricity, SeeSaw Networks and rVue, are joined now by PRN, which is clearly repositioning as an agency of record (AOR) for DOOH, leveraging what is left of their now-ravaged model. Other rep agencies, such as Immersion OOH are making progress, and we are seeing some attempts at venue-specific alliances, some with value and others that are actually loose affiliations of the damaged, dying and desperate. The result of all this is that some networks have four or more people representing them, often to the same prospects. The value proposition, sales approach and often the prices are different. Buyers become confused, and confusion drives them back to the comfort of existing traditional channels. Somehow, this channel conflict needs to be resolved. All of the reputable aggregators will be very quick to tell network owners that they are not designed to be the “go to” sellers of ad inventory. In fact, their job becomes easier if the networks create some scarcity (and price firmness) by selling a good percentage of their inventory directly. Networks who try to go direct after an account is opened by an aggregator ignore the fact that the original sale was in the context of a multi-network buy. But there are cases when a buy is network specific, and the appropriate action is to go direct. So the answer is not to dump the direct sales force or the aggregators, but to communicate, work together and even team sell when appropriate. It will make everyone look better to the buyers.

Even with better communication, the time is drawing near when networks will have to choose one aggregator or rep agency and grant them exclusivity in order to reduce the potential for channel conflict and media buyer confusion. Very much like the networks and the solution providers, this would be a driver for the consolidation in the aggregation business, or at least the clear definition of winners and losers. The ad buyers want this. Ignore them at your own peril.

The third theme is execution, which falls back upon the networks themselves. Graeme Spicer recently posted a series of observations on the Adcentricity blog, and echoed the sentiments I heard in New York. He noted that “(Agencies) have high expectations of the DOOH industry to deliver campaigns as contracted, and they are becoming increasingly vigilant in ensuring that they are getting value. This means physical venue audits by the agencies are now becoming commonplace, and the results aren't always casting DOOH in a favorable light." What this means is that agencies are unlikely to simply accept location counts and playout affidavits at face value. They want some assurance that the displays are properly placed, functional and turned on. We will see agencies auditing network locations before and after campaigns in order to create assurance of value beyond affidavit numbers. Media buyers see this as a requirement for their own credibility and job security, and you can't blame them. Networks will need to be able to demonstrate high levels of compliance, not just playout records. Compliance means that displays are on when they are supposed to be on, content plays when it is supposed to play, sound is on and audible where appropriate, and errors are corrected before they have material impact on a campaign. This goes well beyond reporting playout data in a vacuum.

One of the challenges the agencies see, and clearly a pain point for the aggregators as well, is the huge disparity in the technical and operational capabilities of the various networks. Large numbers of networks run on home-grown applications of varying sophistication. Others run on any number of commercial applications, again with varying ability to support ad-driven networks, especially to the satisfaction of ad buyers. At the same time, the ability of network organizations to execute campaigns and manage their assets varies widely. Just as agencies are auditing venues to see what they are actually getting for their ad dollars, so too will they (and the aggregators) go through a process of vetting networks and software providers for accuracy, completeness and compliance. Dollars will flow to where there is confidence.

When the industry deals with rationalizing networks, channel conflict in ad sales and technical execution of ad campaigns, we will be a lot closer to the comfort zones of ad buyers. That evolution of this critical facet of our industry has to take place. We already know DOOH works. Now we have to make it easy for ad buyers and brands to invest with confidence. All three legs of the DOOH stool: networks, solution providers and ad sellers will need to work together. Those who remove the pain points for ad buyers will see more ad revenue sooner.

Winners Can Monetize

There are a few digital signage companies out there offering “free” digital signage software. The goal, it is assumed, is to grab a huge market share comprised of people who value mission critical software at zero and then convert them to premium products for a fee. Good luck with that. The model for monetizing a free service is Google, who made themselves the top search engine with a great tool, and monetized it with ad dollars and applications. The difference, of course, is that Google positioned itself as a premium offering against other free services, and had a better product. They also faced off against a bigger market.

Yesterday, the increasingly omnipresent Twitter, a non-revenue company, achieved an implied valuation of $1 billion when two venture capital firms agreed to provide $100 million in cash for what my math skills compute to be 10% of the company. Reactions varied from a scoffing reply from Dr. Evil to a hilarious “so there” press release from 37 signals. More serious people observed that the VCs are betting that there will be a liquidity event, most likely an IPO, which would value Twitter far in excess of $1 billion. But first they will have to win the bet that Twitter can monetize their groundbreaking micro-blogging platform. Here is one man’s roadmap to monetization:

1. Interstitial advertising in free accounts: Twitter could sell ad tweets that are placed on the home page of non-premium users. They would have to figure out what a reasonably frequency of ad tweets would be without upsetting free members, but still providing value to advertisers. Their ability to micro-target users based on keywords, locations and frequency of use would drive ad rates higher. Maybe 5 bucks a year buys you out of ads. If Twitter reaches a 100 million accounts, I bet they’d love 5 dollars from 10% of that base! Twitter founder Biz Stone has already gone on record as saying there will be no ads this year, but it is already October.

2. Develop a premium product that users will pay a nominal annual fee for: Here are some services that might be worth 25 bucks a year to me:

• Real spam filtering: The spammers may actually pay to gain access to all users, so Twitter will need to take a more serious approach to identifying and purging spammers from the premium twittersphere. If they were getting paid to do it, they would likely be more diligent than they are today.
• Search result filtering: I have “digital signage” as a saved search term that allows me to monitor all tweets with that phrase in them. You would be amazed at the drek that shows up along with some terrific insights and news. The ability to tag users as useful (show me their relevant tweets) and useless (never, ever show me their tweets) would be a nice feature. It would also be nice to never see tweets in search results from people you have blocked.
• No ads: (see above)
• Voice mail tweets to other premium users: The ability to send a short audio tweet to a phone might be very useful. It is also consistent with the roots of Twitter as a cell phone-centric tool.
• Upgraded Twitter home pages and page view tracking: Provide premium users with enhanced home page features and let them monitor how often the page is visited, and by whom.
• Longer message lengths: I know, tweets are limited to 140 characters to accommodate cell phone constraints, but many users compose and view all their tweets on computer screens. Maybe letting premium members have 180 characters to spew their thoughts would be of value. Cell users and non-premium members would see truncated tweets or perhaps a link to a web interface for viewing the full tweet.

3. Develop a premium RSS feed service: Twitter feeds are emerging as a new source of user-generated content on digital signage networks. Others are using dedicated Twitter accounts to transmit information to a network. The ability to filter, preview or edit RSS feeds, and a new, custom interface to provide more features to business users might be something businesses would pay for.

4. Develop and sell TwitterChips: We have already seen how people are developing hacks using Twitter to make devices report on their status. Why not develop Twitter-ready chips that could be embedded in smart devices and appliances that would have dedicated accounts and the ability to tweet vital data to owner or monitor accounts. Think about cars tweeting their maintenance needs and operating parameters to owners (and dealers)… office printers tweeting when toner levels are low… TiVos tweeting when there are programming changes, recording conflicts or special events… swimming pools and hot tubs tweeting when water chemistry is not optimal. The possibilities are endless, and Twitter could easily partner to make this effective and inexpensive enough to be everywhere.

5. App Store and applications: It seems that Twitter already missed the boat on the opportunity to build the first app store for its platform. oneforty.com was unveiled his week (I was made aware by a tweet from @manolo_almagro), sporting access to over 1,300 free and not-so-free applications and tools for Twitter. Even in beta, is already creating a community and gathering a fan base. Look for Twitter to buy or mimic this Guy Kawasaki-advised start-up. Twitter could also start building add-on applications itself.

With a rapidly expanding user base of over 15 million in place world wide, and the ability to move markets, governments and businesses, Twitter is in a good place. Now they have to build a good business. Some users will be put off by attempts to monetize the Twittersphere, but if it is done right, better features will appear for all users. I doubt that any of these ideas are original (isn’t it said that there has only been one original idea, ever?), but it seems certain that something has to happen to justify the huge implied value. Stand by, and think up the other features you might pay for, because you can bet its coming. As for the free digital signage guys pulling something like this off... not so much.

Model Behavior

Yesterday, I sent a tweet saying that markets fix broken business models, not government dollars. I was reacting to pieces I had seen related to newpaper and (of all things) VC bailouts. Today, two pieces of news arrive that restore my faith in capitalism and the power of the marketplace.

First, related to the newspaper business, I read (courtesy of the eagle eyes at DailyDOOH) of the Knight News Challenge. The John S. and James L. Knight Foundation, the legacy of the Knight brothers of Knight Ridder fame, will award $5M in a contest seeking “innovations that use new or available technology to distribute content in local communities”. The contest dictates the use of digital (and open source) technology, among other requirements. This is a great example of how innovation and market forces can work together to reshape a chronically ill newspaper business. And it is being funded by a fortune made when newspapers were innovative and highly relevant. Kudos to the Knight Foundation, and good luck to the participants. Somehow I think out of home digital screens may be part of a winning formula.

Second, and even closer to home in the digital signage-sphere, is the revelation of a poorly kept secret: TargetCast Networks has purchased Ripple TV. We had speculated that the plug would be pulled back in July. Yesterday the rumor went from coast to coast that the consideration was one dollar. I am not sure I am buying into that idea, since the deal effectively has one VC (Claremont Creek) offering a lifeline of sorts to a failed deal of others (DFJ and Trinity), which would imply a deal more complex than a cup of coffee. There is probably some equity, contingent payments or earnouts that can bring some value to the VC investors at Ripple down the line. You can bet that the Ripple employees and early investors are out of work and out of luck, respectively, as the Grim Reaper removes human redundancy and his step brother, Liquidation Preference, ensures that any of the limited dollars coming back go to the preferred (VC) investors. So it goes: execute or prepare for execution.

The Ripple TV model was broken for a number of reasons. Their famously busy screens were difficult to view at times, and their placement in the venues that I have been in have left much to be desired. Clearly, the concept was not resonating with advertisers, despite the roster of highly visible venues, which is a mixture of coffee shops, bagel places, and Borders. I am not aware of what kind of arrangements they had with their venue owners, but it is reasonable to assume that some kind of revenue sharing was in place. They are left with lots of flat screen displays in high traffic, low dwell time locations, some sort of technology base, and a bunch of content partners. A diamond in the rough? Probably not, but at the right price, a great footprint and an opportunity to utilize a different approach to monetize it.

The press release indicates that TargetCast plans to “rebrand existing Ripple TVs in fast casual locations, integrate the content and advertising delivery into a single format and use its patented TargetCaster hardware and software products to scale growth into new locations”. Given TargetCast’s model, and the fact that they are the surviving entity here, it is a good bet that the Ripple screens will now show live TV framed with the TargetCast “L-bar”, and powered by TargetCast’s box and software. This makes sense because part of the power of TargetCast’s model is that it uses TVs that are already in place (the bar TVs at Chili’s, TGI Friday’s, Applebee’s and others) and leverages the free content from broadcast TV, leaving the only content investment to be made for paid advertisers. Whether you believe in the model or not, it has quite a bit more leverage than models that require the acquisition of compelling, relevant and targeted content on dedicated displays (a/k/a digital signage or narrowcasting). So, it’s a big buh-bye for the content partners of Ripple as well.

And then there is Borders. The press release refers to rebranding casual dining locations, which would not seem to include Borders. I never understood why Borders wanted Ripple or vice versa. The guess here is that TCN will support the Borders locations as is until the contract term runs out, and/or try to sell it. Borders is not a candidate for the broadcast TV/L-bar content strategy, and TCN won’t want the expense of running the Ripple technology platform for any longer than they have to.

So some of the takeaways here are as follows:

1. The market works, and good business models trump bad business models
2. VCs are not afraid to cut their losses when more cash is not the answer
3. There is usually a buyer out there when there is value to be salvaged

Our industry marches on. As it should be, the market decides who wins and who loses.