Digital Signage Industry Influences and Outlook June 6 2012 BUNN
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Transcript of Digital Signage Industry Influences and Outlook June 6 2012 BUNN
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June 2012 Digital Signage Industry Influences and Outlook Abstract: This 13-‐page analysis by dynamic place-‐based industry analyst, consultant and educator Lyle Bunn outlines the state of Digital Signage in North America from the standpoint of four qualitative factors including Attitudes, Markets/Uses and Supply and Technologies. Four concerns are noted including their “remedies in progress” and commentary on the Outlook for the medium is provided. Digital Signage1, the umbrella term used to describe dynamic place-‐based, advertising-‐based or corporate communications display networks has continued in a double-‐digit growth path -‐ at about 23% compounding annually. This paper outlines qualitative factors that highlight the current status and outlook of the dynamic place-‐based message display industry. While some data is presented, the following is not a quantitative review, but commentary on the qualitative and contextual aspects of the current use and emergence of the medium.
The most successful applications of the medium, and its Critical Success factors reflect the convergence of:
a) Clearly defined business and communications objectives b) Technology infrastructure that delivers immediate and long-‐term outcomes
1 Other names commonly used for “Digital Signage” include “Electronic Display Networks”, “In-Store TV”, “Waiting Room TV,” “Enterprise Media,” “Narrowcasting.”
OUTLOOK
2. Markets Uses
3. Supply
1. Attitudes
4. Technology
The framework for this paper is as illustrated. Each influence is addressed, followed by the outlook for the sector at large. Some concerns are then presented with indicators of how the current remedies to these concerns could be expected to alleviate them and impact the use of the medium and the overall prospects of the industry at large.
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c) Content that is relevant to the viewing and location experience d) Ongoing optimization that uses insights to maximize benefits achieved
The following factors currently impacting the outlook for digital place-‐based display medium in contributing to effective, efficient and economical marketing and communications are:
1. Attitudes on the part of end users and their agents (i.e. ad agencies) 2. Market uses and application of the medium 3. Supply capability 4. Technology that enables targeted messaging and customer, patron and staff
engagement 1. Attitudes on the part of end users and their agents Attitudes are the primary drivers of digital place-‐based use and the market. Given that strong supply capability exists, and this continues to grow as markets advance, it appears to be the “attitudes” related to planning and advancing the use of the medium that are most impacting (i.e. impairing and advancing) growth. Though industry growth continues at double-‐digit levels (i.e. 23%) annually, this is clearly a much lesser level than could reasonably be expected given the broad benefits that are possible and are being experienced. “We’ve used it – it works – let’s go!” In recognition that the medium works well when properly applied, end user executives are increasingly charging their staff and advertising agencies with integrating dynamic place-‐based media into their plans, campaigns and their services.
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The “communications continuum”
High Engagement
High Reach
TV Cable Print Billboard Dynamic Signage Internet Social Media Mobile
PAID OWNED EARNED
“TRANSMEDIA” Multi-Channel, Integrated, “Omni Channel”
Marketing and Communications
Many Some Few One
By better linking “paid”, “owned” and “earned” media, marketers and communicators seek to gain greater value from their overall media investment toward “engagement” with targeted audiences such as customers, patrons, staff and students.
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The timing of this end user executive focus is coincident with agencies’ struggles. As agencies that offer niche services or are “service or mandate silo-‐ed” struggle with media integration and their contribution to multi-‐channel, omni-‐channel and 360 degree marketing, they are aware or concerned that their competitors are seizing new revenues through dynamic media while potentially moving into their service areas. Retailers that are operating or planning showcase locations are taping into a wide range of digital engagement technologies to benefit from a “wow factor”, increase destination traffic and generate public relations profile, while also experimenting and generating shopper insights on approaches that could be broadly applied for higher return on communications investment. “Us too” deployments are a natural industry driver because the value propositions “stand to reason” and it’s use is visibly evident by competing organizations. The “innovators” and “early adopters” who are sharing very little information about the business benefits that they have been deriving, are themselves a market force.2 Growth pangs: So, the market for digital signage is demonstrating the natural growth pangs typical of technology-‐enabled innovation. The drive to get more out of what is clearly capable of delivering more, is a natural force of end user desire and dynamic media commerce.
2 While award entries recognize innovation they rarely include metrics and analytics that would fuel the enthusiasms of competitors. Some case studies are available from vendors, in industry publications such as DigitalSignageWeekly, DigitalSignageToday.com, DigitalSignageConnections.com, as presented at industry conferences and at association websites such as www.dp-aa.org.
Dynamic Place-based Medium – Market “Stride”
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The Diffusion of Innovation Everett Rogers (1962)
End User Market Uptake / Application
Total Market Revenue
The “early majority” upswing in the use of the medium is in progress. Some markets, such as post secondary campus, quick serve restaurant, transportation and shopping centers are further advanced in their initial deployment of the medium, and are positioned for the growth in the number of displays and media channels.
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These growth pangs are based on Return on investment (ROI) analysis, the lack of which is often challenging project pace, investment, use and decision-‐making. Suppliers, in particular sales-‐persons and account managers, which offer input into many aspects of digital signage, are reluctant to provide specific input to the end user’s ROI planning or to get involved at this early stage and element of project definition/value. Also, end user project managers are often not thinking at the level of return on cost, time and ongoing effort required. The end user and the technology champion (CIO, IT or AV department) continue to have a hard time viewing projects holistically and with future-‐proofing in mind. In worst-‐case scenarios, a decision for technology selection based on the defined price/performance is resulting in higher end user operating costs or closing out the end users’ future functionality options. As the picture of this total cost of ownership including use becomes clear, operating personnel are often “ducking” while management express their frustration. Management requests for better analysis continue as future investment is considered. Provider John Ryan has published a report of the finding of a survey of retail banking executives about their perspectives of digital signage use. A summary of this report, noting that this survey of end user perspectives in the banking retail vertical market would reflect executive views in many other vertical markets is available3. Suitable executive involvement/perspectives4 does deliver successful and organizationally empowering projects. An excellent recent example of such success was illustrated in the many end user discussions that were held with project leaders from Zion Bank at the trade show floor booth of Broadcast International during the recent Digital Signage Expo. This project at Zion Bank was recognized during Customer Engagement Technology World in late March 2012 as the Digital Screenmedia Association (DSA) presented two Industry Excellence Awards5 to Broadcast International for its “first-of-its-kind” Managed Media Services Network; a digital signage network designed to accommodate the multi-channel marketing needs of financial institutions. Broadcast International, which has a demonstrated positive record of stakeholder engagement with end user organizations received awards for “Best Financial Services Deployment – Digital Signage”, and “Best Financial Services Deployment – Self-Service / Interactive Kiosks.” The next chasm to be crossed is one in which End User Management including marketing, human resources, patron experience, etc. and Project Managers including for example the Chief Information Office, Information Technology of digital media initiatives engage in facing cost and benefit analysis together. 3 See “additional suggested reading” section at end of this paper 4 For more on executive engagement see the “open letter to CEO/COO” at www.LyleBunn.com 5 The Digital Screenmedia Association (DSA) Industry Excellence Awards recognize the best self-service, digital signage and mobile technology deployments across all vertical market segments.
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Information and support is available. As noted, award entries and case studies can offer insights, but the greater benefit lies in the planning and review of the use of the medium specific to the mix of business and communications goals in a specific use scenario. Frameworks for ROI analysis are available from the Digital Screenmedia Association (to members) and in a 40-page whitepaper subtitled “ROI or Die” (see additional materials at end of this paper). 2. Market uses and application of the medium Dynamic place-‐based medium has earned its place in the Communication Continuum in part through “transmedia”, which enables the optimal development, testing and use of digital media across various communications devices (i.e. TV, print, internet, mobile, etc.). Numerous budgeting “buckets” within the framework of “paid”, “owned” and “earned” media are applicable to the use of the medium. More important, it enables transition to higher levels of marketing and communications value from “paid” to “owned” to “earned” through the messages presented in out-‐of-‐home locations where people shop, browse, travel, gather, work and study.
Multiple benefits, simultaneously: Every media must prove its value by “moving the needle” – by delivering clear and intended value. This typically includes generating action, improving the awareness of the brand and its attributes in generating brand aspiration, contributing to ambiance and pace through its use.
OWNED!Signage, Website!Building, Billboard!Packaging, Apps!
!!
EARNED!Social Media, Opt-in,!
“news”, Blogs!“Likes,” Referrals,!
Word of Mouth!
PAID!TV, Cable, Radio, OOH, Print, Mail,
Co-op.!
Media Currency!
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The use of Digital Place-‐based media typically starts with a narrow focus of desired/expected outcome, however through its use, the ways in which the medium can deliver value broadens and deepens. As such, the medium has grown in its use to deliver multiple benefits of engagement – often simultaneously. As illustrated, the ability to generate improved merchandising, branding, location ambiance and its ability to influence the pace or “energy” in an environment allows it to most fully deliver business value.
Ad-based Digital Place-based Networks: There are 369 ad-based, digital place-based networks operating on a for-profit basis in North America6. These networks carried $842 million in advertising in 2011 according to Pat Quinn in presenting to the Strategy Institute Brand Activation Summit on April 25. He noted that advertising growth using digital place-based media is about 17 times faster than the US economy at large. PQ Media said, “16.2% growth is projected in 2012 for advertising growth using digital place-based networks”. Quinn noted that the 10 largest networks deliver 62% of all advertising, while 84% generate less than $10 million in annual revenues despite their capability to reach highly targeted audiences and demographics. Ad-based networks face similar challenges in revenue achievement, investment attraction and operating efficiencies.
6 List compiled by BUNN March 2012.
Multi-Purpose Media – simultaneous benefits.
• Modulate pace • Vitality • Stimulation • Motivation
• Establish and Reinforce Value
• Aspiration • Audience
“Alignment”
• Destination Leadership
• Sense of safety • Reduced
Perceived waiting / dwell times
• Triggering ACTION • Merchandising • Engaging • Selling • Enrolling
Influence Ambiance
Energy Branding
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A monthly webinar series (free) supported by the Digital Signage Federation and sponsored by Intel, LG Electronics, NEC VUKUNET, Synnex Corp. and Scala was launched on May 23 to provide training and insights to ad-based network operators. The series, produced and moderated by BUNN focuses on bridging the gap between ad agencies, investors and business enablers. See http://www.digitalsignagefederation.org/dsfbunnwebinars These Digital Place-based networks, which can serve third party advertisers well, are also getting support to better address these challenges from associations and event producers. Examples include the Oct. 16 Digital Place-based Advertising Association Summit (www.dp-aa.org) and the Oct 17-18th, 7th annual Strategy Institute Investors Conference. In-House corporate networks: There are an estimated 1000 large networks owned by organizations and used exclusively to support their internal communications goals. It is estimated that a further 10,000 small networks are in operation for staff communications. An estimated 1.6 million displays are operational to present messages in North America according to NPD DisplaySearch, which forecasts compound annual growth of 23% in deployment of displays over 26 inches in size. Blurring lines between ad-based (paid) and in-house (owned) networks: For-profit, ad-based network operators are very important to the sector at large, beyond their capacity for (paid) message delivery and their ability to better serve markets and communicators within the “communications continuum” by motivating “audience of one” engagement. Ad-based network operators have gained capabilities and in many cases have the technology and operating infrastructure that enables them to also supply the network needs of enterprises that prefer to operate their own internal networks for patron, staff and student communications. This suggests a high-value emergence of industry capability as “paid” and “owned” media networks advance, even as hybrid networks in which some paid or sponsored messaging can offset the operating costs of in-house, corporate (owned). Their existing infrastructure and their capacities to define, deploy and operate networks ideally position North America’s 369 ad-based network operators to extend their offerings and services to organizations seeking non-ad based, proprietary, in-house networks. Their holistic supply approach and experience ideally suit these firms to extend their business models to deliver services that respond to market needs. By reducing complexity, time requirements and investment, potentially even moving end user investment from capital to operating, ad-based network operators can help retailers, brands and others to move forward with the use of the medium, thereby accelerating the “early majority” stage of adoption of the medium. Integration with Mobile: As the medium presents messages at location where people shop, commute, wait, gather, work and study, these messages are able to motivate or trigger engagement on handheld devices and smart phones. By motivating download, opt-
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in, browsing and commerce on the mobile device, digital signage bridges the gap between message display and engagement. Beyond the messaging, the digital signage platform can serve as the platform for WiFi, Near Field Communications (NFC) and device detection forming a closed system of audience measurement, detection, invitation, offer and activation7. 3. Supply capability Supply capabilities are strong. The confidence and capability of suppliers is a strong foundation for industry growth, and training is readily available from proven, highly credible sources. Online training8 and live education events offers highly efficient training and education. The Digital Signage Expert Group (www.DSEG.org) has certified over 8000 professionals in 62 countries with the Digital Signage Certified Expert (DSCE) program, and over 2000 people with the Digital Signage Display Experts (DSDE) program. The SPEED Digital Signage Training Program (which has been continuously developed/provided by this author) has been delivered in whole/part to over 2500 people. SPEED will soon be available online through DSEG. Providers of Static Signs and Digital Graphics have been including dynamic signage elements in their proposals for some time, however this group of providers, in realizing the impact on their businesses are stepping up efforts to gain competencies and better integrate dynamic place-based media as it challenges their long-standing market. Members of the International Sign Association (ISA) and Screen Graphics Industry Association (SGIA), in deciding how they should engage, are often partnering with technology integrators to bring new value and “one-stop shopping” to their clients and prospects. Co-operations of these industry associations with the Digital Signage Federation, with particular support from the Digital Signage Expert Group (www.DSEG.org) education program is advancing supply capabilities by static sign providers. Suppliers are assuring their ongoing ability to contribute and reap the benefits of industry growth through corporate restructuring and diversification. Notable examples are:
• Harris Corporation will include its Out-of-Home group in the sale of its Broadcast Division. Background information and commentary has been published previously9.
7 See “additional suggested reading” section at end of this paper. Summary article of the National Retail Federation 2012 conference through the lens of Dynamic place-based media. 8 See Digital Signage Expert Group – www.DSEG.org 9 See http://www.digitalsignagetoday.com/article/194703/Harris-Corp-getting-out-of-digital-signage-DOOH
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• Courts have approved the re-structuring plan of Broadsign, which had gained “first mover” advantage in providing its Content Management Software (CMS) delivered in a Software as a Service (SaaS) supply model. The firm has 30,000 subscriptions in a client base of over 140 networks.
• NEC Display Solutions has continued to advance its VUKUNET offering of a no-cost Content Management Solution and advertising placement platform compatible with virtually all other software.
• Technology distributors such as Synnex have developed a comprehensive “line card” of digital signage technology elements and the ability to advise and supply integrators and other providers of display networks.
• The Intel Anonymous Impressions Metrics (AIM) Suite, which offers very low cost, highly efficient audience detection for viewer analytics and media optimization, operates on all popular digital signage platforms and continues to be developed further.
• Many suppliers have lines of business that enable their digital signage offerings, while also providing products and services in non-‐digital signage areas. Some corporate examples include Broadcast International, Stratacache and Hughes Corporation. While providing and operating digital signage networks for numerous organizations, Broadcast International (www.BRIN.com) also offers managed media services and the CodecSys software platform for video optimization technology, which delivers higher quality video at lower bandwidth rates. Hughes Network Systems, a division of EchoStar Corporation is a provider of broadband satellite services and a growing suite of digital media solutions. Stratacache also offers media distribution and media caching along with other services.
4. Technologies Technologies and insights about how these are best applied are presented at several major industry trade show and conference events. • The 10th annual Digital Signage Expo (mark your calendar for Feb. 25-‐28, 2013
in Las Vegas) reaches new heights every year for best practices discussion, new product/service introduction and networking. This is a must-‐attend event for everyone involved in the digital signage supply and application chain and in particular those seeking to better engage with the medium.
• Customer Engagement Technology World (www.CETWorld.com), continues to emerge as a marketplace of ideas and approaches that exploit enabling technology capabilities. It’s focus on business value and “outcomes” make it a key event for the industry, in particular as the range of uses of dynamic place-based media continues to emerge.
• InfoComm12, an annual conference and trade show of audio/visual and information technology integrators and end users will include over 220 digital signage exhibitors and continuous Digital Signage education during the June 13-15th Las Vegas event.
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Numerous live and webinar events are offered by suppliers, distributors and industry associations and publications, which serve to maintain and accelerate knowledge of enabling technology elements and their integration. Concerns Four areas of concern exist related to the outlook for digital signage use. ROI Analysis: The success of the use of the medium depends upon its delivering Return on Investment (ROI), yet ROI analysis is generally poorly addressed, even as the use of the medium moves through experimentation or proof of concept stages. Proven approaches to ROI analysis are often poorly applied, in part because this function is not being “owned” and is not being spearheaded by personnel with the inclination or capabilities to respond to this project requirement. The comprehensive whitepaper titled “ROI or Die” available at www.LyleBunn.com - RESOURCES offers the framework for such ROI Analysis. Content: The achievement of goals is directly related to the relevance of “content” presented using dynamic place-based media, yet, this element of operation is often under-resourced and under-funded. There is continued reluctance to fuel the signage with quality content. Since the benefits through the use of the medium can only be achieved through suitable content strategy and composition, this area offers significant potential to improve the performance and ROI from the use of the medium. Purpose-driven technologies: The proof of concept and early stages of deployment offer insights to the value in use of the medium, while at the same time suggesting areas of functionality and operating efficiencies necessary to the use of the medium on a broader scale. The technology infrastructure applied in early stages may lack adequate capability when the medium is more broadly applied. Enabling capabilities are an essential element of this technology-based medium, and so technology selection, in particular of the Content Management System (software) and overall network design must consider broader application. Ad Planning and Placement: This aspect of operations continues to frustrate ad-based network operators and to some extent brands that wish to use the medium. The situation is defined by several consequential factors. In particular, there are 369 ad-based digital place-based networks operating in North America. This is both good, and bad news, in that they collectively offer excellent “reach” into attractive locations characterized by captive audiences and long, out-of-home dwell times suitable to consumer engagement. The bad news is that it continues to be challenging to take advantage of many of these location-specific networks. As ad seller and planner/buyer time is consumed, industry efforts to standardize audience language and aggregate the broad view of available digital place-based media presentation inventory (i.e. the location, viewer profile and viewing context of the displays) are continuing. There have been setbacks including the demise of SeeSaw Networks and the shift of the Adcentricity service model.
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Continued advancement by DOMedia, rVue and VUKUNET suggest consolidation of inventory presentation options and future streamlining of ad commerce, augmented by the network growth and business capabilities of network operators. Clear options exist which, when exercised, address this concern. Education and business support efforts aimed at advancing revenue achievement, investment attraction and operating efficiencies of digital place-based networks offer the potential for significant, rapid advancement in this area10. Outlook Strong continued growth in the markets and use of Digital Signage and Dynamic Place-based media is indicated based on the following and other factors:
• Dynamic place-based display has found its place in the communications continuum with proven capabilities as a “paid”, “owned” and contributing to “earned” media.
• New deployments are being planned and are proceeding as the “early majority” in the Diffusion of Innovation curve (Everett Rogers 1962) adopts the use of the medium. These new deployments are (generally) using proven structures in planning and advancing with caution, while assuring suitable future proofing.
• Current deployments, as advanced by “innovators” and “early adopters” in this diffusion curve are increasing their levels of use and diffusion based on early findings and outcomes. They seek to apply the medium more broadly to gain greater enterprise value and enjoy economies of scale.
• Technologies are stable and incrementally improving, which offers greater efficiencies in planning, deployment and operations along with resource reduction and improved risk management/mitigation.
• Long standing suppliers continue to gain competencies to contribute in wider areas of deployment and operations beyond their specific areas of product/service supply.
• New suppliers emerging in areas such as static signage, digital graphics, content production, AV/IT integration are tapping into available training, trade shows and long-standing core suppliers.
• Primary industry associations including Digital Signage Federation (DSF), Digital Screenmedia Association (DSA), Digital Place-based Advertising Association
10 Information on the monthly webinar program for ad-based network operators is available at http://www.lylebunn.com/Pages/DOOHAccelerationProgram.aspx
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(DP-AA.org) and Infocomm International have achieved operational stability and are providing increasing value in advancing best practices in Digital Signage application.
• Award programs such as the long standing DIGI Awards as well as the Apex Awards, Industry Excellence Awards and POPAI/Globalshop Digital Signage Awards are recognizing innovations and supplier/end user collaborations.
• An excellent base of education offered through industry media, association and conferences, and specifically through the Digital Signage Expert Group as well as core industry suppliers such as Intel, Scala, NEC Display Solutions, LG Electronics, Synnex, Saddle Ranch Digital, Accuweather, Broadcast International, Stratacache, TechData, Hughes and others are actively supporting webinar and other programs, which benefit their personnel, end users and their integration and supply partners.
• A growing base of articles and whitepapers are available from industry media and analysts such as Platt Retail Institute (www.plattretailinstitute.org), this author (see other suggested reading end of this paper) and industry organizations.
• Agencies and providers of marketing/communications services are seeking to gain knowledge of the use of the medium and quickly develop competencies in the application of digital place-based media.
• When metrics and analytics are very cost-effectively gathered and applied, they lead to the validation of investment and the optimization of use of the medium.
Positive attitudes prevail. When suitable investment in technology infrastructure, content and operations are made, high return on investment in areas of branding, merchandising, influence and location ambiance are provided as communications performance increases, costs are reduced and “speed to messaging” is improved. Optimization of network operation and use of the medium are of primary consideration. Other suggested reading: The following are available for download (free, no registration required) from http://www.lylebunn.com/Pages/aboutus.aspx
• Digital Place-based Media ROI Analytics - Defining Value. ROI or Die! This comprehensive, 40-page paper provides a framework for Return on Investment analysis. It includes 20 sections addressing What Digital Media is Now, Analytics for Decision Support, Insights/Actionable Intelligence, Approaches to Analytics and the Costs of Analytics.
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• NRF Shouts Technology, Engagement and Talent. This summary of the
National Retail Federation January 2012 “The BIG Show” trade show and conference is through the lens of the value and directions of Digital In-Store and Dynamic Place-based Media toward improving the success of brands and retailers. While the marquis theme of the event was “Engage and Evolve,” the three retail industry priorities of “technology”, “engagement” and “talent” were reflected by many exhibitors, retail sector briefing reports and in conference sessions. 7 pages.
• Brand Activation using Dynamic Place-based Media - "Getting Sexier by the Second". A 2-page summary of Day 1 presentations of the Strategy Institute Brand Activation Summit held April 25-26, 2012.
• DSE12 - 3 Take-Aways: Analytics, Content, Investment Value. A 30,000 foot view of this primary Dynamic Media industry gathering notes a positive correlation to retail and other sector priorities.
• "Fail to Plan - Plan to Fail". As published in the Digital Signage Best Practices" Guide, this articles outlines how to address the challenges of selecting the right media management software by defining the level of software functionality required to meet communications goals.
Lyle Bunn Principal & Strategy Architect BUNN O: 613-475-9121 C: 416-904-4426 30 Bayshore Road Brighton, Ont. K0K 1H0 [email protected] www.LyleBunn.com
Lyle Bunn (Ph.D. Hon) is an analyst, consultant and educator in North America’s Dynamic Place-based and Enterprise Media industries. He has assisted hundreds of organizations to plan, implement and optimize their use of digital place-based and enterprise media. His SPEED Digital Signage Training Program has been delivered to over 2500 professionals and he has published over 200 whitepapers and articles on digital place-based media, including serving as Editor and primary author for supplements included in The Wall Street Journal, USA Today and The National Post. [email protected]