Digital signage used to be associated with the bright lights of Vegas, Times Square and Piccadilly Circus - iconic displays designed to draw in the crowds and entice them to spend. However, such efforts were costly, meaning they remained a rarity and out of reach from all but the richest of firms for many years.
Nowadays though, things are somewhat different, with digital signage touching us at various points in our lives - from the glide down a Tube escalator on the way to the office in the morning to the constantly changing wave of slogans at Premiership football grounds up and down the country at weekends.
However, while advances in digital technology and the advent of the internet have changed this landscape forever, the ethos remains the same: advertisers want to influence our behaviour and buying decisions.
As a result, buoyed by a drop in pricing and shorn of the problems associated with things such as bandwidth constraints, a market that has had its fair share of problems is, it seems, finally starting to mature.
Indeed, the digital signage and professional displays market is set to grow to $14.6bn (£7.4bn) within fours years, according to market watcher iSuppli. In terms of unit growth, this represents 22.7 million units, around a six-fold increase on the 3.9 million units seen in 2006.
These statistics appear to be backed up by market research company eMarketer, which claims that out-of-home advertising will rank second only to internet advertising in terms of ad spending growth, and predicts US outdoor advertising revenues will increase to $10.2bn in 2011, up from $6.8bn last year.
“Public site owners are seeing that digital signage is the way to communicate mission critical messages, whether it’s information services or advertising,” says Sid Stanley, general manager of retail transport and venues at Sony. “Whether this is the right medium is no longer a debate in my mind. It is most definitely the right medium to communicate mission critical messages.”
“The cost of the screens is going down and the pervasiveness of broadband, whether it be DSL or something else, is obviously helping,” adds Koen Jacobs, business development manager for Cisco Digital Media Systems in Europe.
“Looking at retailers,” he says, “part of the reason why digital signage has not exploded is down to the cost models. They have just not had a lot of budget for this and it’s been difficult to measure just how much impact digital signage has compared to a poster and what it means in terms of an uptake of sales.”
Stanley agrees, but cites those in the market going about their business in a bold and uneducated way as one reason for past problems - which is indeed something VARs should take note of.
“Many initial installations and trials took place without the proper
planning and foresight required and as a result they failed,” says Mike Fisher, head of continuous research at analyst Decision Tree Consulting Worldwide.
“Initial business models tended to focus on external advertising revenues, but with limited proof points as to the opportunities to see and the effectiveness of digital signage, many advertisers have remained unconvinced,” he adds.
“Time and time again we see content that is poorly conceived, poorly put together and not relevant to the consumer who is seeing the messages,” explains Stanley.
One of the first mistakes that is frequently made, he says, is that people often think of it as television. “The whole point of digital signage is reaching an out-of audience that cannot be reached by traditional mediums. Generally the audience is moving, and therefore the content needs to be tailored in terms of dwelling time and capturing the attention of an audience.
“The business case is now increasingly standing up and that is why we are seeing increased penetration,” he adds.
For its part, Sony is now installing the largest digital signage network in Europe for Le Poste, the French postal service.
In a recent report entitled How digital media transforms in-store marketing, Forrester analyst Nikki Baird also gives us an indication of the potential for such technology by revealing that pilot campaigns in-store using high-definition technology at point of sale have seen sales increases that range between 15 and 60 per cent.
Yet, other factors are helping fuel growth in digital signage.
The elimination of paper signage plays very much to a green strategy for retailers, as does the reduction in costs associated with this. Store assistants are also able to spend more time with customers enhancing the shopping experience.
“Digital signage also provides the ability to react instantly to competitive pressures on pricing as well as having complete flexibility on promotions especially for products that are perishable and need to be discounted near their life end as opposed to just being thrown away,” explains Peter Lewis, marketing director at Episys, a company which helps B&Q, Comet and Bloomingdales do just that.
Right now, the company is working with Sears, the US department store chain, piloting the digital signage technology in the electronics department. Its solution will see electronic shelf-edge labels replace traditional printed ones, automating the process of updating both price and product information with a simple wireless network automated by a central server.
With more than half of retailers already using digital signage in their stores and nearly the same figure suggesting they will increase use - whether this is via more digital screens or introducing them as a completely new concept - Samsung views the market as a major opportunity for both itself and its partners.
Indeed, David Smith, IT director at Samsung, believes there are realistic applications for digital signage in just about every customer-based service organisation.
“The content can be changed quickly and easily, and targeted to appeal to different audiences depending on times and locations,” he says. “Marketing departments are using digital signage for applications such as customer experience management and to influence consumer behaviour, while human resources departments can use it to communicate company news and information to employees.”
A representative for Panasonic claims the benefits of using such forms of communication lie in the belief that they bring a fresh, innovative twist to marketing in previously static locations, offering an eye-catching, attention-grabbing alternative to traditional print media.
“Digital signage can aid customer recall and retention of information or products displayed,” he adds. “It allows advertising and information to be updated from one station and broadcast immediately to audiences regardless of location.”
Such flexibility enables users to change their messages and visuals on demand 24/7, significantly saving on printing costs as well as reducing processing time.
According to Mark Hopgood, technical director at communication software consultancy Plasmanet, much of the opportunity around digital signage lies within the corporate environment. This often means cracking the classic communications code: how does a business communicator get the message across while attempting to cut through all the noise produced by channels such as email, telephone and the intranet?
“Employing digital signage in a way that engages the message recipient is crucial in meeting this challenge, as is being able to accurately measure the effectiveness of the communication campaign,” he says.
“It’s a little bit like an organisation being able to broadcast almost TV-like visuals into satellite locations,” adds Samsung’s Smith.
It also produces an opportunity for VARs. “When you have that volume of content it means a lot of processing, a lot of manpower, a lot of project management, potentially rollout and support. That is such a great opportunity for the reseller community,” he adds.
Retail still represents the largest target market simply due to the huge number of potential customers, according to Fisher. However, he says many network owners have targeted niche market segments over the past few years with some success - Sub TV, a network installed in student unions across the country, being one such example.
“Sport is an area that is adopting digital signage fast and furiously,” says Sony’s Stanley, referring to the financial success enjoyed by Arsenal FC following its introduction.
Smith agrees: “The ability of sporting venues in particular, such as the Grand Prix, to broadcast information such as statistics adds another dimension to the experience.”
“You stand there and watch a car whiz past at an incredibly fast speed and it’s a bit of a blur. You don’t get a sense of what is happening,” he says. “If you watch the cricket, you might see the score, but you don’t see the stats on the players. To be able to broadcast that information into those facilities is another great way of enhancing the live experience with the statistical experience.”
In the Premiership, each football ground has a statistician at work delivering information at half time to the coaching teams.
“These guys are already there,” adds Smith. “Why not repurpose that information and deliver it as a service to the corporate box and enhance that experience. All the pieces are there to be unlocked, it’s just a case of pulling them all together.”
He says that the education market, particularly in higher education institutions and universities, has been quick to introduce digital signage, and that this along with retail is an area in which resellers have been enjoying the most success up until now.
“Applications in these areas might include company announcements, training, news distribution or information provision,” he adds.
“Retail in its many guises is obvious,” says Rob Bamforth, principal analyst of service provision and mobility at Quocirca, “but where there is a requirement to consistently get a set of messages to a distributed set of locations represents an important opportunity.”
As he rightly points out, digital signage is not primarily about getting the biggest plasma screens in situ as some previously thought. “This is a communications channel that supports other activities, so focus on the other activities such as education, selling, advertising and information,” he says.
Robert Sung, sales manager at vendor AG Neovo, believes that although large LCD, LED and plasma screens have a commanding position now, smaller ones will become more popular, particularly as manufacturers develop screens with more and more functionality. Smaller screens mean greater flexibility, again extending its potential.
“Resellers will have more opportunity with smaller displays that have extra features,” he says.
Bamforth sees opportunities for resellers coming from margin on the high-value items. However, he believes these will be driven down as they commoditise, so better options for VARs will come from ongoing revenues from networking services that support the signage.
“There is also the integration options that will come from making this more than just a standalone closed broadcasting service, including help on the content creation side,” he says.
Dave Flack, director of sales and marketing at Catalus, thinks the digital signage market is at a turning point following the introduction of free-standing digital display panels.
“Whereas traditionally, organisations would purchase fixed panels from specialist audiovisual (AV) resellers,” he says, “the free-standing version is a lot simpler and can be set up by someone with little or no technical experience.”
Indeed, the technology involved in free-standing digital display panels is now relatively straight forward, allowing data to be uploaded and transferred via memory cards and has become widely popular.
“This obviously has massive implications for the channel as non-specialist resellers are able to jump on the digital signage bandwagon and reap the benefits of high demand,” he adds.
This means that resellers that historically sold IT solutions to blue-chip companies now have the opportunity to expand their portfolio, using the technology of digital signage to its full advantage.
“This, combined with solutions becoming cheaper, means that the potential growth over the next 12 months is phenomenal,” he says.
While some such as Sung believe a one-stop shop is certainly of benefit to the user, partnerships can additionally prove fruitful.
NEC has had a specific signage team designing and fulfilling digital signage needs for the past three years, working with a complete programme of partners, according to Barrie Guy, sales manager of large format displays at NEC Display Solutions, who believes the channel is beginning to see more opportunities for convergence.
“The recent changes in the channel are a result of resellers perceiving digital signage as an opportunity with the continued convergence of AV technology,” he adds.
NEC split its large format business into sectors to mirror that of its customers three years ago, a move which it says has proved highly successful, allowing it to focus its efforts in the channel.
From a customer perspective, Bamforth believes IT resellers with networking credibility could be in a strong position going forward.
Hopgood says that combining Plasmanet’s programming and communications expertise with that of an AV or device specialist has enabled the company to provide successful end-to-end, specialised corporate signage systems for clients.
“A good example is a recently undertaken project with a blue-chip consultancy to provide the directors’ boardroom with fully equipped AV functionality for cross-branch and international virtual meetings,” he says. “Plasmanet partnered with the videoconferencing experts at integrator Asysco to integrate real-time streaming video over the company’s broadband network with presentation slides and other forms of written content.”
“We also should not forget being able to pull information from sources rather than transmitting,” adds Smith. “Digital signage has far-reaching consequences too. Think of the advantages associated with being in a satellite location and being able to pull presentations and content and display it in real time to my location. Digital signage can change the ballpark for the conference industry too.”
There are already some alliances between hardware and content suppliers, and Smith says some content suppliers are moving into hardware supply as well. However, he believes that getting into this area takes serious commitment and investment before a company can taste success.
“You will not win business unless you have some specialist focus and understand the market and solutions,” he says.
“The challenge for all of us is to professionally blend IT with AV,” adds Stanley. “The screen is the tip of the iceberg. The wave is most definitely coming.”
“We definitely believe it will become a core component of how businesses interact with their customers and even with their employees. Those not doing so will definitely feel an impact,” adds Jacobs. “We definitely see an enormous momentum across the market across different sectors.”
“Wherever there is communication and information, there is normally consulting and money to be made,” adds Smith. “The reason I’m excited is that it brings high-powered, fantastic communications to the masses and the organisations delivering that will be powerful to start with.”
“It is an overused phrase, but content is king,” adds Fisher. “Without eye-catching and targeted content, customers will not look at the screens and the network will fail.”
Digital signage lifted by lucrative contracts