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The major forms of communications for business owners and advertisers have generally been via radio, television, newspapers/magazines, and static outdoor signs. There is a constant hunt for new and better ways to reach audiences. Realizing that the previous forms of communication seemed to have had their day, digital signage is now emerging as a key avenue to connect with viewers.

Consequently, advertisers are giving up their TV-centric approach and taking their advertisements to locations where consumers socialize, are most receptive (like check-out counters), and make actual purchasing or brand decisions.

Within the past five years, a form of digital media that enables targeted “out-of-home” communication of advertising, branding, entertainment, and information using a network of displays, and where contents may be remotely controlled, managed, and updated, has emerged. The new wave of digital signage includes applications whose business models are based on advertising, branding, or a combination of both.

Now, Sundrop Systems, a Florida-based company, is shaking up how the world sees advertising, reaching a target audience while they are out of their homes. “Touchcast™ arose out of our beta testing with a 250 unit micro-network called the Community Marketing Network™ (CMN),” says Travis Priest, Founder of Sundrop Systems. “The CMN is built on a platform of 17” LCD monitors with card readers driven by a micro-CPU.”

The beauty of this system is that during ad rotation, the network gathers opt-ins to on-screen advertising through a swipe of the viewers’ Florida Drivers License, which contains name and address information encoded on a magnetic stripe. “We’ve found that direct response is critical to the local advertisers to which we cater,” says Priest.

“Although no user information is gathered from the DL that could compromise an individual’s identity, we experienced consumer pushback at this entry point. The truly remarkable thing was that the pushback was minimal. We gathered thousands of leads from this channel and continue to do so daily for our advertisers.”

Mr. Priest began his career in information technology in 1993 as a computer systems analyst at NASA Langley Research Center. In 1996, he co-founded Unified Research Laboratories (URLabs) with a group of fellow NASA employees. URLabs then developed patented Internet filtering technology and sold its software products world-wide. In July 1999, Symantec Corporation acquired URLabs for $42 million in cash, returning over 17X to URLabs’ outside investors.

While at Symantec, Priest joined the team focused on expanding Symantec’s product offerings to the world’s leading telecommunications companies. In January of 2007, Priest founded Sundrop Systems which gave birth to the successful Community Marketing Network consisting of Touchcast™ and Showcast™. “I enjoy technology, am familiar with it, and enjoy making it serve business purposes,” says Priest. “Digital signage and SMS mobile marketing are two ways for me to make technology serve business.”

Build it and they will come
While going out on a limb with hopes of providing better marketing for advertisers, Priest welcomed the excitement that his products produced. “We learned that people WILL opt-in at a local terminal, but they were suspicious of swiping their licenses. Touchcast™ was born out of this need for an interface that was completely controlled by the user.”

Touchcast is a digital advertising tool that places a 19-inch touch-screen inside a hosting store, typically near the checkout line to capture the attention of customers waiting to pay. The touch-screen rotates ten advertisements from other businesses in the community and allows the viewer to interact with the advertisement so the advertiser can contact the viewer.

With the advent of low-cost all-in-one LCD screens with touch capability, Touchcast is a locally dense network of these devices installed at checkout counters and waiting areas of local businesses that allow direct consumer response to any onscreen ad (really a web micro-site) via a touch interface.

“Showcast™ developed as our customers demanded larger format digital signage for their own use. These 42’’ displays are sold to local retailers, restaurateurs, and medical offices to up-sell their own products and services. The screens are divided: 2/3 dedicated to the hosting venue for their promotional messages, and 1/3 dedicated to third-party content and sponsorships to keep eyeballs on the screens. This is a turn-key, completely managed service for the hosting business, which pays a low monthly fee.”

Sundrop operates a 250-unit network that is being upgraded from 17’’ LCD technology to 19’’ LCD Touchscreen technology. Their network is very well-received: in an area with a population of only 250,000 residents, they reach 500,000 monthly. This means that, on average, they reach every resident at least twice per month. This reach and frequency is important to the local advertisers.

As with most business start-ups, one of the greatest challenges for Priest was capital. “Building a narrowcast network is capital-intensive. Almost weekly you can read press releases about another company that’s started their own network; however, embarking on such a journey with a ‘build it and they will come’ business plan can be deadly. Balancing advertiser acceptance though education with network growth is essential, but challenging.”

Sign shop diversification
Sundrop offers a licensing program that allows affiliates to provide the Showcast digital signage solution on either an exclusive or non-exclusive basis. The program bundles in sales training and product support in customized amounts: licensees can perform their own site surveys and installations or subcontract to Sundrop. Sundrop also offers graphic design work if the licensee does not want to do it themselves. Their back-end scheduling software allows these networks to operate seamlessly side by side, giving them access to their library of third-party content and “cross-network” sponsorship opportunities. Licensees can become as involved in operations as they like, or simply remain more distant sales outlets.

The future and beyond
Building a business like Sundrop Systems requires insight, patience, guts and a willingness to embrace change. Says Priest: “Obviously we are bullish on the industry or we would not be in the business. While we don’t expect to see, or consumers to tolerate, a world like ‘Minority Report,’ we do believe that the cost savings, flexibility, and attractiveness of digital signage will represent solid growth opportunities for years to come.”

According to Priest, digital signage is in a feeding frenzy right now. There’s a tremendous amount of blood in the water and the initial boom will be very reminiscent of the cut vinyl signage boom of the 90’s. At that time Gerber came out with a vinyl cutting platform that was driven off a PC. The old analog style of sign painting was revolutionized overnight. Paint was out, vinyl was in. 3M drove the market with “High-Performance” self-adhesive vinyl in a dizzying array of colors and styles. Suddenly, every guy who had a brother-in-law with a computer and a buncha’ software was in the sign biz. Cost of entry was low and so was the retail price of their product and service.

“Then our old buddy, ‘reality’ checked in. Vinyl sign shops began to close their doors in droves and the market made a natural retraction.”

“I believe that in the next five years, we will see the same thing in the digital signage industry. Droves of people will enter the fray to participate in the burgeoning market. The vast majority will be under-capitalized and fall-out within the first two years of their existence. The upcoming format wars will drive out another sector and the remaining hardened few will consolidate the carnage into a lean, mean channel for mass marketers and retail organizations.”

Priest believes that if prices continue to fall as they have the cost of entry will be low enough that he sees Touchcast-style networks forming similar to the local magazine offerings of today.

“Go to any local retailer ­ not necessarily a chain ­ and look at the amount of advertiser-supported free literature available: local magazines, newsletters, and the like. Development and vision will be the final arbiter of the victors. In ten years the channel will be mature and stable, discounting of course, the inevitability of emerging technologies to challenge digital signage for pre-eminence in audience delivery for this sector.”

Doing things the same old way with the same old technology is a sure recipe for failure. A sign company cannot make it big (or perhaps survive) without keeping up with technological advances and applying them to their shops. They have to constantly search for new and/or better services to offer customers. As Priest put it, “Innovate or die.”