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 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.