Photo credit: Almo Professional A/V
Photo credit: Almo Professional A/V
Photo credit: Almo Professional A/V
Attention: The Nielsen Co. has reported that digital signage in the US generates more than 237 million monthly exposures to people 18 years of age or older. Separate market research from IHS iSuppli indicates the growing adoption of digital signage around the world as professionals in the retail, hospitality, healthcare, corporate, and government sectors look to the medium to communicate to audiences on the go. Electronic digital signage (EDS) systems now can be found in a variety of locations including supermarkets, Big Box retailers, movie theaters, shopping malls, doctors and dentists’ offices, liquor stores, and schools. Screen sizes are ranging from 22 inches to 50 inches and larger.
The growth potential is there. Earlier this year, Microsoft Windows Embedded Marketing honcho Barb Edson reported that there are approximately 2 million digital signs across the United States, and that number is expected to grow to 7 million over the next five years. Indeed, revenues for digital signage equipment and software were $5 billion at the end of 2010, according to IMS Research, and are growing to more than $7 billion by the end of this year.
Worldwide shipments of signage and professional displays in 2012 reached 17.2 million units, up from 15.4 million in 2011 and 13.5 million in 2010, said IHS iSuppli. By 2016, they are expected to reach nearly 26 million units. The research firm attributed the healthy growth to a few factors, including a greater need for digital signage in public spaces and the rapidly declining price of LCD panels.
Many industry experts feel brand owners are the biggest drivers of EDS. Brand owners feel EDS can help them keep a customer at point of sale instead of the customer choosing a cheaper/generic brand or what is on sale. Advertisers see EDS as a less expensive way to reach a larger audience than TV advertising, according to I.T. Strategies, another research consultancy. Recent audience measurement tools provide statistical data to prove electronic digital signage is impacting customers at point of sale, pointed out VP Marco Boer. EDS also gives brands an alternative advertisement media as television viewers/newspaper readers decline. EDS increased brand-specific sales 75 percent to 100 percent in liquor stores operated by Drinks TV, Digital Signage Today has reported.
Signage that Sells
Diageo’s Virtual Bartender is another example of EDS inside of an alcohol retailer. This sign allowed the consumer to interact with a “virtual bartender” through a touch screen. The bartender suggested drink recipes and printed a complete shopping list for the customer. This increases liquor sales and also mixers, ice, specialty cups, etc. -- anything listed on the “shopping list.”
GameStop TV is an entertainment-based program that offers original gaming content now produced by CBS Outernet. The network, running since 2006, is installed in more than 4,300 GameStop stores. The system has shown to increase sales of advertised products by an average of 20 percent, according to a Neilsen study. Some 65 percent of all store visitors watched or listened to the in-store programming, and 52 percent of the predominantly (72 percent) male 12 to 34-year-old store audience spent more time in the store after viewing the content (compared to those who did not view).
One Estee Lauder interactive EDS used RFID technology. Shoppers interacted at the point of decision, where they were provided with media content specific to their needs at the point at which they are making the decision to purchase. When a product was picked up, the RFID allowed screens to play video specific to the selected product along with cross-recommendation to other products in the range. For example, if a customer picked up a lipstick, the RFID tag would register and the EDS suggested other cosmetics to go with the lipstick. The EDS also turned into a mirror to allow the customer convenient product testing. In addition, a special tag presented by a Lab Series Consultant turned the screen into a skin scanner enabling a customer’s skin type to be analyzed, then recommended suitable products.
If brands can create quality content at the lower range, purchasing advertising space is inexpensive, Boer continued. EDS may offer an opportunity for exposure to a larger, ideally located (meaning: viewers are close to point of purchase/point of decision) audience than television commercials for less money. “For example: a brand can purchase a seven- to 15-second ad that appears every eight minutes on 2,000 screens in 50 malls and run for a month for $350,000, or $175 per screen,” he said, “or purchase a one-time, 30-second television commercial on a popular series for the same $350.000. Not to mention the TV viewership is declining and TiVo [and DVR] features offer a way to avoid annoying commercials.”
I.T. Strategies encouraged wide-format print shop owners to consider these statistics as retailers head into the 2013 holiday shopping season:
- 40 percent of consumers who have seen video in a store say that, in the future, they would choose to shop in a store with video screens versus one without (Arbitron Retail Media study).
- 40 percent of consumers said they took note or watched the entire ad (Digital Signage Today).
- 52 percent of the consumers who have watched in-store video feel that more stores should run video programming (Arbitron).
- 68 percent of shoppers said in-store messages help their purchase decisions (Arbitron & Scarsborough).
However, “It is not about display; it is all about the management of content and infrastructure,” said Boer. And there are a few ways to manage, namely in-house or outsource.
What to Outsource?
In most cases, advertisers will not deploy their own EDS networks. They will instead create the content and then schedule ads on EDS networks that meet their requirements. Premium Retail Network (PRN) is one such provider that partners with retailers and advertisers to deliver in-store EDS solutions. The company holds the largest market share of content creation and management of EDS. PRN designs, deploys, operates, and programs strategic media networks that engage customers, improve product sales, build brands, and help deliver customer service to shoppers at key touch points through their stores. PRN is estimated to reach more than 6,400 stores and 210,000 screens worldwide, and its programming is delivered to more than 600 million shoppers each month.
When searching for a partner or partners, keep in mind that this “commodity” product is anything but. “Digital signage is a ‘tangled web’ of interrelated technologies that, on the surface, look quite simple,” was the advice Melody Craigmyle, marketing VP at ALMO Pro A/V, shared with an ISA International Sign Expo audience in April. “Are you looking at a 40-inch flat panel connected via CAT5 cable to a server, with a USB drive for replay,” Craigmyle asked, “or are you deploying across a network?”
Content creation is another strategic consideration, according to Craigmyle. Even if your firm has an in-house graphic designer, “consider that motion graphics/video is far different than print and signs.” Consider hiring interns, who probably have experience with the latest software and are eager to gain practical experience. (But do you have someone to manage them, she asked?) If you lean toward outsourcing, perhaps you already have a partnership with an ad agency which you can approach with a revenue-sharing model, Craigmyle encouraged. Some major equipment manufacturers offer design services by the hour, which can be purchased through distribution, she added.
On the more technical, network side, chances are most wide-printers don’t have an experienced, certified technician on staff. The question, according to Craigmyle, becomes, “What kind of support contract will your customers need? Consider buying products with remote monitoring and scheduling capabilities, she recommended, such as Furman BlueBolt for hardware and Samsung MagicInfo for software. Another option, of course, is to outsource these functions and partner with an IT (information technology) service provider. Or, adopt a hybrid approach, she explained: “Be the first line of support for the customer; then have someone on contract to address concerns that your staff cannot resolve. For flat panels, buy on-site extended warranties with a national network of servicers.”
To handle hardware in house, you first need to have direct relationships with all the manufacturers. Then ask how many lines can you support -- stocking, training staff, and lines of credit are examples. The alternative is partnering with a value-added distributor that can supply most or all your hardware. “Consider who will hold inventory for your project and stage it in their warehouse with all the accessories,” Craigmyle said. “Also consider if they have technical, certified resources on staff.”
A hybrid hardware approach might “be direct with a few key manufacturers, then to partner with distribution for other lines you don’t purchase as often,” Craigmyle offered, cautioning that the time spent obtaining price quotations can be substantial. She also warned about other time-consuming “soft costs” that many people tend to forget:
- receiving shipments (and associated work interruptions)
- reconciling packing lists, cutting checks
- balancing the checking account
- the process of managing cash-flow
- coordinating returns with vendors
- warehousing and staging equipment until all items have arrived for a project