I. Industry Risk Analysis

(1) Policy Risk

From the perspective of the policy life cycle, the advertising machine industry faces multi – dimensional policy risks: During the formulation period, there may be new restrictive clauses on data collection (such as the extended application of the “Personal Information Protection Law”), leading to a sharp increase in the compliance cost of the user profiling function; during the implementation period, there is a problem of regional differentiation in the approval standards for outdoor advertising, and cross – regional operators face implementation obstacles of “one policy for one city”; during the adjustment period, new energy – efficiency regulations for display devices may be encountered (such as the localization of the EU ErP Directive), triggering the pressure of hardware upgrades; during the recession period, the risk is manifested as local governments stepping up the governance of light pollution from outdoor LED screens, and the existing equipment in the core business districts of some cities faces the risk of forced removal. The mismatch between the technology iteration cycle and the policy change rhythm will magnify the uncertainty of enterprise operations.

(2) Economic Risk

The advertising machine industry is currently directly impacted by the contraction of enterprise marketing budgets during the economic downturn cycle. The growth rate of market demand has slowed down. Coupled with the increase in hardware production costs and supply – chain fluctuations, the profit margin has been compressed; the accelerated technological iteration in the industry (such as interactive screens and AI advertising systems) has forced the replacement cycle of existing equipment to be passively extended, and customers’ purchasing decisions have become more conservative; at the same time, the increase in the office building vacancy rate and the shrinkage of the retail industry have led to a decline in traffic in physical scenarios, weakening the core value of advertising machines. In some markets, there is competition from alternative digital advertising solutions. Enterprises’ cash flows are generally under pressure, and new entrants face soaring customer acquisition costs and account – period risks in the existing market competition.

(3) Social Risk

The advertising machine industry currently faces social risks brought about by the differences in consumption demands between generations: The young consumer group (Generation Z) prefers digital media with strong interactivity and personalized content, while the one – way communication mode of traditional advertising machines can hardly meet their needs for a sense of participation and immediate feedback; the middle – aged and older groups have limited acceptance of emerging technologies, resulting in an obvious stratification in product usage rates and a significant increase in market education costs; at the same time, the increasing sensitivity to privacy has put compliance pressure on data – driven precise advertising, and the different understandings of information – receiving boundaries among different generations have exacerbated the difficulty of balancing supervision and user experience.

(4) Legal Risk

Entrepreneurs in the advertising machine industry face multiple legal risks: Advertising content must strictly comply with the “Advertising Law”, which prohibits false advertising and illegal medical advertising; if the equipment involves data collection functions such as face recognition, it must comply with the principles of explicit consent and minimum necessity in the “Personal Information Protection Law”; there is a risk of infringing the copyright of film, television or art works in the playback materials; the placement of outdoor equipment requires approval from the urban management department, and violating the “Regulations on the Registration and Management of Outdoor Advertising” will result in forced removal and fines; sub – standard hardware quality may trigger the return, compensation and administrative penalties stipulated in the “Product Quality Law”; in case of property ownership disputes during the equipment installation process, it is easy to lead to civil compensation liability related to the property rights section of the “Civil Code”.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurial Opportunities

Entrepreneurs in the advertising machine industry can focus on developing intelligent and highly interactive customized solutions for vertical scenarios (such as communities, shopping malls, and transportation hubs). Combine AI visual analysis technology to achieve precise advertising push. Provide an integrated operation model of “hardware + data service” for small and medium – sized enterprises. Seize the demand for digital transformation of offline scenarios, and give priority to the layout of local life services (catering, education, medical care) in the sinking market. Reduce the equipment deployment cost through modular design, optimize the advertising placement effect for advertisers based on real – time data feedback, and explore interactive application scenarios such as AR advertising and dynamic pricing screens simultaneously.

(2) Suggestions on Entrepreneurial Resources

Entrepreneurs in the advertising machine industry should focus on core technology R & D and supply – chain integration. Give priority to obtaining patent authorization for intelligent display screens or resources from ODM manufacturers, and establish API interface cooperation with content cloud platforms. Focus on connecting with commercial real – estate property and franchisees of chain brands, and reduce the hardware installation cost through a revenue – sharing model. Establish relationships with operators to obtain 5G traffic subsidies, and cooperate with the digital advertising association to obtain advertising placement qualification certification. Set up a UI/UX design crowdsourcing platform to make up for the short – board in content production, and use the Internet of Things data of the equipment to improve the ability of precise marketing services. Build a resource moat of “hardware + content + data” in a light – asset model.

(3) Suggestions on Entrepreneurial Teams

Entrepreneurs in the advertising machine industry should give priority to forming a complementary team with capabilities in technology R & D, marketing, and supply – chain management. Technical members should be familiar with intelligent hardware development and Internet of Things technology. Marketing members should have B – end customer resources and digital marketing experience. Operation members should be proficient in production quality control and project delivery processes. It is recommended to bind core talents through equity incentives, establish a flat decision – making mechanism to maintain market response speed, regularly organize customer demand analysis meetings to enhance product iteration ability, and introduce partners with display – screen supplier resources or government relationship networks to lower the thresholds for raw material procurement and project bidding.

(4) Suggestions on Entrepreneurial Risks

Entrepreneurs in the advertising machine industry should focus on the matching between technology iteration and market demand. Give priority to investing in the development of hardware compatible with 5G transmission and AI precise push functions. At the same time, establish a dynamic cost accounting model (update the raw material price fluctuation data at least monthly), and adopt a combined procurement strategy of “futures + spot” for core components such as display panels. They must obtain digital content dissemination qualifications (such as the “License for the Audio – Visual Program Transmission on the Information Network”) and sign an annual compliance review agreement with a law firm. Pay special attention to preventing the traps of exclusivity clauses in the lease of outdoor media locations. It is recommended to deploy a remote operation and maintenance system to monitor the online rate of equipment in real – time (maintain it above 98%), optimize the settlement cycle for advertisers based on the equipment usage frequency data, and strictly control the account period within 45 days.