Counting the cost of Digital Signage: Why the technology matters

Digital signage has been gaining momentum in Europe over the past 18 months as businesses have discovered what consumers have known for years – technology looks good. Let me explain. Trials in both Europe and the US have shown consistently that digital signage is a more effective medium for communicating, for the simple reason that it gets noticed, when more traditional media doesn’t. In the retail environment, this translates into sales – around 30% more sales.

Whilst digital signage has created a significant ‘buzz’ in recent years, especially in the US, adoption in Europe has been slower than we would have expected. The US digital signage market is continuing to grow at around 20% a year, becoming an increasingly familiar sight in shops and venues. In Europe this has not been the case. Given that Wal-Mart and Target (leading US supermarkets) are investing so confidently in digital signage, it is right to ask why more European vendors and venue managers aren’t doing the same.

One of the critical issues in Europe has been cost. Retailers frequently multiply the cost of their home plasma or LCD TV by the number of screens and assume that this provides a ballpark figure of the costs. This calculation, of course, overlooks the infrastructure, management, installation and content creation, all of which are required for the network to operate. Whilst this issue continues to put off some smaller venues, it’s worth considering how much progress has been made over the past 18 months, as installations have become smarter and more efficient.

Key to the reduction of overall cost has been the increased production efficiencies that have been achieved by the technology vendors. Over the past few years, the cost of LCD and plasma displays has fallen steadily by around 25% per year, and last year prices dropped by more than 40%.

Of the two formats (LCD and plasma), the market seems to be favouring LCD, and this shift may have a greater impact on the uptake of digital signage than it does on the consumer TV market. Traditionally, LCD technology was the only choice for screen sizes up to 32 inches, and plasma technology was better suited to larger screens, however, as the cost of LCD has fallen and the technology improved, LCD screens have been made available in larger sizes. For commercial uses, LCD technology offers a number of benefits over Plasma: higher brightness, sharper resolution, longer lifespan and lower power consumption. The last of these features is particularly significant for larger installations of several hundred screens: plasma displays can consume up to three times more power than LCD screens. It’s a consideration that is frequently overlooked.

As well as the hardware becoming more affordable, more recently the technology providers, including Sony, have recognised the potential for small and medium-sized businesses.

Last year, Sony released a network media card that plugs directly into a flatscreen display, enabling users to upload content to the screens without the need for expensive content applications, network infrastructure or trained technicians.

Network media cards allow the user to create content on a standard PC (in JPEG or MPEG-2) and then copy it on to a memory card, either Compact Flash or Microdrive. The card is then inserted into the digital signage board with content ready to play. All the operating software is already loaded, which means the system is actually more reliable and efficient.

With such simple plug & play, we’re trying to challenge the perception that digital signage is too expensive or complicated for smaller venues to manage.

The principle of investing in marketing technology is still a new concept to many organisations, but that will inevitably change as new media, such as Podcasts, blogs and SMS texting, gain ground as a credible form of communication. Dry corporate communications are on their way out, as they are being replaced by informative, engaging and entertaining methods of reaching customers. This is a great time to be involved in a fascinating and fast-growing industry.