Photo courtesy Astral Out of Home
By Lyle Bunn
Digital signage has been around for 25 years or so, having started with videotape loops airing on cathode ray tube (CRT) TVs in retail locations and then evolving into narrowcasting with specially created content. The current era of digital signage, driven by ever more sophisticated content management systems (CMSs), has experienced double-digit growth regularly since 2000, as the pricing and performance of flat-panel displays, media players, connectivity hardware and media management software have steadily improved and organizations of all kinds have revamped their approaches to communications.
By way of example, according to market research firm IHS, the market for digital signage software grew by 13.1 per cent in 2015, while revenue from advertising grew by 11.6 per cent and is expected to increase by 12 per cent in 2016. The installed base of active digital signage displays across North America, based on the addition of two million new screens each year and a mean lifespan of five years, is conservatively estimated at 20 million, including at least one million dedicated to third-party advertising. And annual investments in content, based on assumptions about the scale of various networks and their refresh rates, currently exceed $3.5 million U.S.
Supporting growth
The success of digital signage is founded on the principle that the human brain is hardwired to notice motion. Animated graphics and text are all the more effective in reaching an engaged audience when presented at high-traffic locations with long dwell times and, especially, with messages that are relevant to the targeted viewers, whether they are at work, travelling, browsing or nearing the point of purchase (POP). When done right, the medium can help not only brand a given location, but also improve its ambiance and vitality.
Other factors that have supported the growth of digital signage range from the need to update the public with mass safety alerts to the ability with interactivity to customize content for an audience of one. Digital signage operators’ return on investment (ROI), meanwhile, benefits from network-based integration with point-of-sale (POS) systems and data feeds (e.g. weather forecasts, news, calendars of events), among others. Screens can help activate consumer engagement through other online media, including mobile apps and e-commerce. Indeed, the explosion of mobile and social media has helped vault digital signage forward. Over time, the medium has evolved from a stand-alone platform to part of a greater communications continuum.
Despite the double-digit growth of digital signage in virtually every market, however, other factors have deterred or retarded adoption of the medium. One is the common perception of high expense, particularly with regard to the constant creation of new content. Another is the difficulty many organizations face in identifying where digital signage fits among their marketing and technology budgets, which can result in underfunded and delayed project cycles. And yet another is putting the components of a project together, which can be challenging when clients are working with many suppliers who each only provide one piece of the puzzle.
Display enclosures are key to facilitating outdoor deployments. Photo courtesy BroadSign
Fortunately, all of these concerns have been clarified and addressed in recent years, to the betterment of the industry.
Building the supply chain
The digital signage ‘supply chain’ includes content authoring, management, connectivity, presentation and audience analytics, all of which have become efficient and adaptable. Messaging is less expensive today, content development is faster and the presentation of branding across various media is more consistent.
Many vendors today provide displays, mounting hardware, enclosures, CMS software, design templates and other components, with some bundling them to help small, proof-of-concept projects get off the ground with minimal cost, time or complexity, allowing the client to focus on the messaging. Sign shops, audiovisual (AV) integrators and information technology (IT) vendors have all become major suppliers in the market, with new entrants continuing
to emerge.
Nevertheless, the supply chain can be compared to a long, low, flat pyramid. While there are more than 2,000 suppliers of digital signage in North America, fewer than 50 dominate the industry. Most content creators, integrators, AV or IT integrators and sign shops are in the lower-revenue base of the pyramid.
