End User Pricing

[NVTS]

Hello,

I am just starting out and based in Alberta Canada. I am trying to come up with a pricing structure for hosts, advertiser only, and so on.

I know this is more complex based upon each end users situation. I am just looking for a base to start with.

I also know this is a lot to ask as this is what sets competing companies apart.

I appreciate any help/guidance on this.

my email is howard at nvts.ca for those who will offer help/guidance.

Thank you in advance.

[ANOOP]

This is the most toughest thing to ask.. My thumb ball figure is if you are investing on the screen and the hardware you should be able to break even and other expenses in 6 months.. Next 6 months is the profit you can make as after 12 months there is no value for the devices.

[NVTS]

Thanks to all.

I do appreciate the emails that have been sent. They have helped as well as the research I have done.

Cheers...

[netdog]

this is a great question and I would like to see a separate forum area dedicated to business issues.

For example I would really enjoy hearing what business models others have found successful.
I am focusing on building out a network to independent retailers and then marketing eyeballs to manufacturers.
Would appreciate any thoughts on what others are doing.

Also, how many of you are creating custom content or your clients ?

I called DS and the person I talked to was clueless on business aspects of the market.

[ANOOP]

DS is in the business of creating platform that could be used by OOH, Corporate communication or any other communication service provider. It is for the value added providers like us to utilise the platform and make business.

Business models differ based on the services utility and the risk factors that you take.

For example i have been with MS for last 6 years providing just the content management services to various financial institutions for their local promotion in their premises so the hardware infrastructure is their own and risk factor as a service provider for me is low as i get my money for the services that i provide. Initially we used to use the content of TV commercials or the promotional ads that they provided in newspaper, later we educated them on why Digital signage needs different content and not the TV commercials and then we got additional business of content development.

Now I have expanded into retail OOH space investing on screens inside the retailer and with revenue share model for the retailer and getting into a total alien business for me of space selling which needs a  different business language than what i have been earlier doing.

Hyper local ads are going to be the buzz word for next couple of years so the screens which have been till now eyeballs generator has to transform in generating sales for the retailer or advertiser, the advertiser will look for immediate business revenues. This means essentially we will have to have a platform that can allow us to micromanage individual screen with custom content.
If you want to sail in this business you will have to have the capability of creating custom content and a platform that can give that scalability which MS has been doing exceedingly well.

[netdog]

ANOOP excellent summation and I "get it" ! Value Add is absolutely the key.

I found your model of revenue sharing to be very interesting. This generates lots of questions and sure would like to get your insight on vertical markets I am looking at addressing. If there is no overlap or conflict of interest maybe we can talk by phone.

In the meantime my thoughts are to place screens in a specific retail industry and then go after manufacturers for ad revenue to this niche market.
I had not considered revenue sharing with the retail because my approach would be to help them generate more sales of the product lines they carry.

Right now I am trying to come up to speed on MS's distribution platform and how to develop the content necessary to roll out a prototype system, so I have not tackled what objections I will run into at the retail locations with this model.

But, my pitch was that by putting in one of my systems they would also get local content not just generic products the carry from the manufacturers. For example if they are having a sale, offering classes or some other promotion they would get a basic monthly set of content changes included. If they want something more extensive that too would be available for a fee. So I see this as a combination of Hyper local (as you mentioned) and Network advertising for products they carry.

A couple of topics I would like to talk to you about offline would be ...


1. What is your workflow for content creation
2. What business models have you seen that work best, flat rate monthly fee, hourly content creation, etc ?
It seems to me that a model similar to what web developers / content creation companies use would be viable.

3. What metrics will you be using to demonstrate an ROI for your advertisers ?
Building and managing a corporate signage system for a financial industry has a very different set of metrics than a typical advertiser trying to sell Widgets. Fortuntely I have a background in marketing and sales so I understand many of the issues and questions they will have.

4. Players - You mentioned your client owns the end point equipment which is great. But what players are they using and is something they purchased or some thing you sold or recommended to them ?

ANOOP, the fact that you have been running a system for 6 years is encouraging. This gives me confidence that platform is capable of handling my needs in the future.

If you are interested in discussing this further and prefer to talk off line let me know. I can share my background and experience and I might be able to help you with ideas on the sales side.

Thanks

[admin]

good discussion going