Digital Signage - Issues and Progress

Issues and Progress

Digital signage in the broad sense has been in use for decades in the form of LED ticker signs and LED video walls. However, despite its recent growth it has yet to become a major public medium, due in part to the following negative factors:

1. Uncertain ROI – the costs of deploying digital signage can be high. Large outdoor screens are expensive - for example, the LED sign in front of the Las Vegas Wynn Resort cost $15 million - but the much more common, and much cheaper, digital signs based on LCD screens can still represent a significant investment when a large network is planned: the cost of installing one screen in, say, each restaurant in a large fast-food chain could run to millions of dollars. An investment of this magnitude has to be justified by a clear ROI plan before receiving approval.
2. Lack of interoperability – digital signage products today are mostly closed, proprietary systems. It is difficult to advertise across digital signage networks running different solutions, making the emerging media inferior to nationwide advertising media such as television and the Internet. Due to the lack of a common communication protocol, products from different vendors do not mix, making digital signage systems expensive to build and hard to expand.
3. Complex value chain - a digital signage network can involve at least the following vendors: displays, media player, management software, project planning, installation, field service, network connectivity, bandwidth, content creation, and advertising sales. Managing such a complex value chain is a daunting task and all parties involved may introduce risk factors to fail a project.
4. Lack of understanding - despite considerable media coverage there remains a general lack of understanding about the requirements for the successful use of digital signage. Problems arising from this include poor content and improper type or location of screens.

These issues are being addressed today in the following ways:

1. Understanding the ROI – studies have shown digital signage to be effective in aiding customer recall and retention of displayed information in large-scale merchandising applications, especially taking into account the downward trend in LCD panel and playback device prices. Today a small-scale retail or restaurant digital signage installation can be implemented for just $1,500-2,000 using inexpensive SaaS tools, and ROI may be realized quickly. One of the best ways to make the case for implementing a digital strategy is to calculate the ROI or ROO upfront. Determine what the goals and objectives are for the digital signage – is it to increase sales at point of purchase? Can it be used to improve lead generation or build brand awareness? Thus, knowing how to calculate the ROI of digital signage is very important.
2. Open standards for digital signage – industry organizations including POPAI (Point-of-Purchase Advertising International) and OAAA (Outdoor Advertising Association of America) are actively developing and promoting technical standards that will make it possible to communicate across digital signage networks made by different vendors. Interoperability across systems and media players is increasing competition in the supply chain, significantly lowering costs and making the ROI on building networks vastly more attractive.
3. Value chain consolidation - business entities have been formed to consolidate segments of the long value chain. Display units with built-in media players, content design agencies which also provide hardware and support, as well as management software which allows advertisers to manage a whole signage network are examples of how the industry is coming to work together and consolidate.
4. Understanding the industry - there are a significant number of trade shows with conferences as well as specialized conferences and also more informal training and briefing sessions all focused on aspects of digital signage. There are also more user friendly products available which are plug and play and don’t even require scheduling software.