In its quest to squeeze more dollars from its digital signage hardware business, NEC late last year tapped into the lucrative market for digital signage advertising when it created a new network platform called Vukunet to bring advertisers and signage operators together.
Today, NEC is bringing its partners into the fold. Specifically, the company is offering to share a percentage of the recurring ad revenue when partners selling signage solutions register their customer’s digital signage networks on the Vukunet platform.
“The advertising revenue for these digital signage networks is approximately 10 times the size of the hardware, software and installation of these systems according to various analysts,” said Ashley Flaska, Vice President of Marketing of NEC Display Solutions.
That size opportunity has the potential to vastly increase margins for VARs that resell and deploy digital signage solutions, as well as creating a stream of recurring revenue, according to NEC.
How did Vukunet come about? When NEC first looked at how it could capitalize on the revenue stream for ads that appear on its digital signage installations, Flaska said they discovered a problem in how the process is conducted today. There existed no centralized platform — similar to a Doubleclick that is used to faciliate Web page advertising — that agencies can use to locate disparate digital signage networks, make ad buys and serve up ads on location. NEC created Vukunet as a central platform that aggregates participating digital signage networks in one place, she explained.
Vukunet is agnostic too. Networks that sign up with Vukunet can be comprised of any vendor’s digital signage equipment and software – not just NEC’s. Ads originating from Vukunet also will run on any of the hundreds of different content management systems used by digital signage operators to get content onto the displays.
Flaska said that for NEC’s partners — of which up to 40 percent are invested in digital signage hardware and software solutions today — the ability to capture recurring ad revenue will be hard to pass up.
“If our VAR are selling digital signage and they sign the customer up on Vukunet, they get a percentage of whatever ongoing advertising revenue is generated,” she said. “We manage everything, billing and payments, and we want to give our partners a piece of the market that’s so much bigger than they currently enjoy.”