In collecting my thoughts for the upcoming Digital Signage Investor Conference next month in NY where I’m talking on a panel, I revisited one of the slides I presented at Screen Media Expo Europe last April in London (that deck is on Slideshare here).
What Gartner calls The Hype Cycle of Emerging Technology maps market expectations against time. When technology is in its infancy, the market tends towards a “Peak of Inflated Expectations” as the market experiences a fool’s gold rush and invariably early adopters pay the price for being early. The market adjusts downwards towards a “Trough of Disillusionment” at which stage companies can actually release products that now exceed users’ expectations. At that point, the market can start to move up the “Slope of Enlightenment.”
From its earliest narrowcast beginnings, the Digital Out of Home market maps very predictably to the hype cycle. I hope we can say we have seen the Peak of Inflated Expectations and are currently at or near the bottom of the Trough of Disillusionment.
Of course not all companies moving through these cycles will reach the Slope of Enlightenment. The trajectory of the Internet, as it evolved into the web was a perfect example of the Hype Cycle of Emerging Technology. Early incumbents like AOL, Prodigy and Compuserve weren’t threatened by young whippersnappers like Amazon and Google. Pundits where happy to write those crazy startups off when the bubble burst, but we know how that story played out.
And like the web, many DOOH companies won’t make it to the Slope of Enlightenment. Some DOOH companies have bet on the wrong architecture or business model, have been too early, or too late, and the Darwinian way is for fitter companies to displace them. The fitter companies survive by betting on the right technologies at the right time, the deep pockets of their investors, or street smarts.
Here’s my bet (and it is literally my bet, as an investor and entrepreneur in DOOH).
DOOH platform companies will fail if they don’t minimally enable connected users, cross channel media (easily and with less friction) and real time measurability (i.e. it’s the web, not broadcast). The gold isn’t in commoditized content management systems, hardware, or cap-ex laden networks. The DOOH gold is in the real time connection to audiences (of ad networks) or customers (of marketing networks).
In other words, like the web, companies that address the opportunity of “connectedness” will have the best chance of succeeding.