Creating a Digital Signage Network (21. Making Money)

                                                             

The Entrepreneurial Model (Accepting Advertising)

Will we develop an entrepreneurial model?  That is a Siren’s Song to many organizations.  Very seductive, alluring and tempting!  Certainly digital signage has untold potential to monetize the real estate on a digital sign.  Full blown ads, sponsorships, tickers, crawls, bugs and logos!  Yet, you have to realize that that will require a lot of specialized effort… even a sales team or public relations firm.  We put a lot of thought into this potential.  Numbers were calculated and there is no doubt that revenue can be generated.  Revenues could be used to off-set the cost of salaries, network maintenance and for future network growth.  These are valid considerations that need to be explored at some point because I can assure you that you will be contacted by eager people (inside your organization and outside your organization) who want to advertise their own messages on your digital signage network.  Digital signage on a university campus has a very captive audience that number in the tens of thousands.  You have the capability of pushing your specific message to them without any standard competition for their attention.  The questions are simply whether you want to permit other peripheral messages to dilute your main institutional message and what can be reasonably gained (revenue) in doing so.  It is a double edged sword, of sorts.

In addition, you have to determine if the addition of advertisements on your digital signage will overpower your intended organizational messaging or create a conflict with key organizational sponsors (think Coca Cola vs. Pepsi).  You should consult the “legal beagles” of your institution to see if any contractual obligations with official sponsors or vendors preclude certain advertising, or even if you are obligated to permit them access to your digital signage medium if others are given the option of advertising.  As well, you will need to guard your brand when it comes to outside advertising… we have all seen advertisements that were questionable as regards appropriateness.  You will be letting advertisers have an impact on your brand, so be clear with them about “editorial control” of such content.

Below you will see an example of a page that could generate revenue by selling the “real estate” for the placement of corporate logos for Papa Johns Pizza, Nike and Coca-Cola.

If you choose to investigate an entrepreneurial model you need to be sure that the software platform you choose has a software management module included that can provide the data you need for “proof of play” for each advertisement, a billing method and advertisement scheduling.  At this point in time WVU Information Stations are not pursuing this type of entrepreneurial model and are focused completely on our organizational messaging and internal brand management.  We have recognized the value-added benefit of digital signage to the institution and see the goodwill our message brings to the university public over the long term.  Our student population, like most of us, is bombarded by a wide array of advertising in all sorts of media combinations.  We have chosen to protect our campus digital signage from being watered down with ancillary messages that would distract from our mission.  The 45,000+ people intercepting our daily messages know that the information on our digital signage is all about WVU and our WVU community.  A well informed public learns about the institution through our digital signage medium and forms an affinity for it over time.  First impressions are lasting impressions. Protect the brand!

December 2, 2011

The whole Return on Investment vs. Return on Objective  (ROI vs. ROO) argument remains a mystery to many digital signage network “owners” in the past and in the future, in my opinion.  Certainly there is potential to generate revenue by selling real estate on our many pages of content across nearly 100 digital signs, video walls and wayfinding deployments on our West Virginia University campuses.  But I would caution anyone doing this in a college or university setting to look at the “not so obvious areas of potential angst, wailing and gnashing of teeth” in such a model.  There are positives and negatives that need to be weighed against each other.  The old adage of “Be careful what you ask for; you may get it!” applies to this entire discussion and lust for money.  Let’s consider a few thing in the discussion:

Facts of The Matter:

1)  Advertising opportunities for a university or college can be in the fashion of full-screen ads, partial-screen ads, logo displays, branded “bugs”, sponsored RSS feeds, etc.

2)  Someone could also sponsor and brand an individual display screen / monitor on the external surface on a deployment.

3)  In our West Virginia University (WVU) loop of content information (currently about 24 minutes long) some pages play for 1, 2 or 3 minutes a couple times per hour 24/7/365 on each of our almost 100 monitors.

4)  The amount of potential revenue that could be generated can be backed into by determining total number of plays per hour, per day… and extrapolated from there.

5)  You would need to determine if there was a “Prime-Time” and “Non-Prime-Time” pricing shift for advertisements during certain hours of the weekday and/or weekend.

6)  To keep it simple, I would suggest using the figure of $1.00 per-play-page as a baseline for a starting point for each screen / monitor to just see what could be generated in potential revenue.  You can always adjust that $1.00 figure up or down once you grasp the dynamic of the base equation you will use.  (It frustrates me that it is like pulling hen’s teeth to try to find what other people are charging for per square inch real estate on digital signage.)

7)  Pricing adjustment could be easily multiplied or extrapolated once you determined this baseline information and create a simple equation.  Then you could create your Rate Sheet for sales.

8)  In higher education institutions “man hours” devoted to a digital signage network support team will need to be factored into the discussion on Return on Investment (ROI).  Our network is 5 years old and has approximately 100 deployed digital signs on our campuses.  We are also displaying our content on 3,800 dorm room televisions on a Standard Definition and a High Definition channel.  Our team consists of three full-time paid Professional Technologist positions (Manager, IT and Graphic Design).  We are housed within the WVU Web Services department and have access to additional web designers, if we need assistance.  We also have access to a couple Electronics Engineers from our sister unit of WVU Television/Video Productions.  (I do not have to pay the Engineers or additional designers for their occasional services since we are all housed within the University Relations division of the West Virginia University.  It should be noted that those occasional services rendered do have great value to us!)

9)  I maintain several budgets.  (Salary, Operating, Centrally Funded Projects, Self-Funded Projects, etc.)  Central funding pays for our formally proposed expansions in specific phases when presented to senior administrators and upon their approval of a larger project .  Self-Funding is used if an individual college or building on campus comes to us for a deployment at their site and that they are paying for it themselves.  Operating Budget is for normal expenditures for maintenance, travel, R&D, office, certain equipment, etc.

10)  MTF (Mean time to failure) on most commercial grade monitors is around 5-7 years.  We are just getting into that period of our evolution and are preparing our budget for some anticipated replacement costs in the future.  We have not had any significant failures at this point in our 5 year experience… but we know they are coming.  We also know that we will have to pay for replacing a monitor or computer from time to time and reflect that in our budgetary process.  Having a great relationship and respect for your main equipment and software vendors pays huge dividends in this situation.  Find and pay for a quality product.  Expect and demand great service; if you don’t get great service you need to fire them and find a vendor who will attend to your needs.  I tell every vendor up front what my service expectations are… and what the consequences for poor service will be on the first instance.  Given that we include an Emergency Messaging feature on every page of every digital sign, we have the committed support of our university administrators and they have always supported our budgets without a doubt… and they know our team produces results.  With any Emergency Messaging feature, failure is not an option.  We keep a couple back-up computers and monitors in our shop in the event of an equipment failure.

11)  Introducing an Entrepreneurial Model (ROI) begs the next question, “Who is going to be the salesperson?”  Every one of the people on my team are far too busy to add that function to their job description nor are they interested in selling advertising.  So, I would need to employ a salesperson or sales team.  I would have to wonder, “Can I cover my sales costs with enough advertising in this unique market of students, faculty and staff… and still cover costs I want to cover (let alone turn any sort of profit)?”

12)  Potential advertisers on our campus would be the various food courts and vending areas, banks, non-campus student housing apartments, local restaurants, bars, downtown and area stores, local malls, cell phone companies, bookstores, pharmacies, medical and dental services, pizza shops, student tutoring services, employment opportunities, etc.  Here is where things can get VERY ugly.  Most higher education universities have “official sponsors” and contractual agreements with certain vendors (Pepsi, Coke, Nike, certain banks, etc.) and now, if I go to the ROI model, I have to put up with the drama of figuring out who I can sell to and who I cannot sell to, without getting myself in trouble.  You would have to develop a comprehensive sales model so that every client was treated fairly and in the same manner.  Administer that sales model with an urgency to turn over sale after sale.  Again, I would ask myself, “Will I make enough from the advertising sales to offset my effort and misery in the university area environs?”   You can plan on several interesting discussions with the university attorneys about all the myriad of university contracts they administer… bring tissues… they will make you cry.

13)  You will also have to deal with another layer of drama when it comes to the discussion of, “Who will determine and exercise the editorial control of all those sold ads?”  The advertising client will be demanding and have their own “concept and expectations” for their message on your digital signage.  Once you release your screens / monitors to public advertisers I predict that sooner or later you will have an advertisement that might not be in the best taste for your university audiences or may not reflect well on the institutional brand, message or values.  I constantly remind my team that WE are the guardians of our institutional brand and message.  (Do not discount or forget that small and impressionable children and prospective high school students on campus tours will be seeing your digital signage on any university campus visit or in the university medical and dental facilities.)  Everything on that screen / monitor is something that our University President should be able to point to with pride.  With over 45,000 pedestrians intercepting our 100 digital signs multiple times per day you can see that the total “impressions” become exponential quickly.  Someone, for darn sure, better be a good gatekeeper for the university brand… the last thing you need is to get a call from The Office of The President telling you that some Mommy is ticked-off that she had to explain what a condom was to her 6 year old daughter while sitting in a doctors waiting room on your campus because that advertisement was on your digital signage network with a provocative graphic design.  (Don’t ask… has happened several times… I had heartburn for days every time… I didn’t get an actual call from the President only because I made an unpopular command decision as soon as I became aware of what was coming… but I did endure several spirited telephone conversations with people above and below my pay grade on what is appropriate advertising and why it is NOT appropriate advertising for some messages to be on our digital signage.  Joy.)

14)  The digital signage software you purchase to drive your content will need to include a robust Content Management platform so that you can track “proof of play” data so that you can accurately invoice and assure your advertisers that they are getting what they pay for.  Often, the Content Management platform is an add-on cost to the software and it can be expensive on the front-end or the back-end of any software purchases.  Do not be surprised if your Content Management software costs several tens of thousands of dollars if you go this direction.  Every associated cost to create the Entrepreneurial Model has to be included on determining the ultimate Return on Investment tally historically.

15)  If you are going to pursue an Entrepreneurial Model, I suggest you have some top-notch graphic designers that you can use to create great designs for your advertisers (if you have to create their ads).  If I am paying for an advertisement I would expect high quality work.  (I have seen some ads at other universities that look like some third grader slapped it together.)  Remember, no matter if YOUR team designed the ad or if it was designed by others (professional, or not)… that advertisement is a DIRECT reflection upon your institution.  I have rejected many items that people within our own university want to put up on our digital signage that look like… well… (for lack of a better phrase)… a piece of JUNK.  Anything that goes up on those screens / monitors on MY watch will add value to the network, or it won’t get put into our WVU Information Stations content loop.  Period.

16)  If you chose to pursue an Entrepreneurial Model, the network Manager of Operations will have to have broad shoulders because they will be accosted from every conceivable direction, from above and below them in the food chain, to eventually put up some advertisement that does not best reflect the values of the institution, is in conflict with an existing vendor / official sponsor contract, or is flat-out in poor taste.  That Manager needs to have the implicit support and confidence of their Supervisor to make a tough and final decision… whenever it needs to be made expediently.  When it comes down to protecting the brand of the institution in this situation, a “decision committee approach” spells disaster in the long run.  Looking the other way or “letting something slide” is the proverbial camel’s nose under the tent flap… pretty soon you have an entire stinking camel in the middle of your team’s tent… and you may set a precedent you will regret for a long time to come.

17)  To be sure, there is money to be made and your costs can be somewhat offset in pursuing an Entrepreneurial Model and seeking Return on Investment (ROI).  West Virginia University has chosen to follow a Return on Objective Model (ROO) because of some of the things I mentioned above.  I think the discussion has to start for anyone getting into a digital signage network initiative with, “What are my objectives?”  “What do I want this digital signage network to perform for the institution?”  “Do I have to offset the network costs by selling advertising, ad infinitum?”  WVU’s objectives are first and foremost to provide a digital signage network spanning our three main campuses with an Emergency Messaging feature that can alert our campus audiences within 9-20 seconds of a bad situation in our portion of the world.  A second objective is to use the digital signage network to positively promote the WVU brand to all of our public audiences, inform our public audiences of all the great things WVU has to offer the world, and to be seen as reliable and credible communicators with every message displayed about our university life and events.  If we meet those objectives 24/7/365 we can rest well knowing that the funds we invest in the WVU Information Stations digital signage network over the years have been well spent and quite cost effective yesterday, today and tomorrow.

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About swgraham2

Mountain Mists is an opportunity to develop some thought processes individually as I journey through this wonderful world; as someone who values highly effective management techniques and the art of leading teams; and through my association with West Virginia University as a professional technologist and network manager specializing in digital signage.
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