Expert Roundtable: The Future of Digital Signage
Jun 1, 2008 12:00 PM, By Bennett Liles
Three insiders weigh in on the state of the industry.
Cahoy: Digital signage is always placed in high-traffic and highly visible areas. In the time of a crisis, what better way to alert the masses? Every organization is looking to maximize their investment and utilize technology for dual purposes. While we hope no one ever needs to use the alerts features of our software [Rise Display Network], it is great to know that if something happens, a university, mall, office complex, or any other type of business can quickly and efficiently get the notice out.
Is the advertising market warming up to the idea of allocating budgets on digital signage?
Chow: I believe the advertising market is re-evaluating digital signage as a focused media for advertising, because today's consumers are Internet-savvy. They're used to viewing information on the go — from their cell phones to their notebook PCs. Digital signage is just another extension of this method of communication.
Weber: Currently, advertisers remain cool to the idea of digital signage as an effective tool. Our target market is not the Wal-Marts and Best Buys of the world, rather consumer-focused businesses with less than 100 locations. We have been approached on several occasions for geographical advertising networks — placing monitors in various hotels, resorts, restaurants, and attractions — to promote themselves and other businesses. None have been launched because it seems as though there is a chicken-and-egg effect in play. Advertisers don't want to invest in these networks until there is sufficient saturation and providers, or end-users don't want to invest until they get a substantial advertiser base. Hence, a stalemate and the networks don't move forward. I believe that when saturation occurs in a specific market, either vertical or geographical, then the advertising market will warm up to digital signage. However, it will most likely take a significant investment by a provider to accomplish this. To date, there simply aren't enough screens to make it attractive.
Cahoy: Buyers are more sophisticated now and advertisers are looking for new ways to reach people at the point of purchase. Digital signage is still young, so it isn't proven, but I think trends have shown that advancements like pop-up blockers, TiVo, XM radio have altered the way people are introduced to products and new brands. The advantage of digital signage is it is prominently placed at the point of purchase or in highly visible areas where you are standing and waiting so you are forced to look at it for entertainment. What better way to educate than at the point of a sale or when you have a captive audience in a waiting room or queued up in a line?
Are users receptive to getting free or discounted displays in return for having advertising taking up a majority of the screen?
Chow: Yes, end-users are receptive to anything that is free, however, subsidies for digital signage through advertising dollars is still a fairly new concept. It is definitely an interesting business model, which more of our resellers and their end-users are asking about. Making a profit on this through advertising subsidies requires advertising expertise — you can either hire this type of expertise or contract it out.
Weber: Various markets seem receptive to the concept — C-Stores and universities, for example — however, the advertising network is not sufficiently established to make free or discounted displays a reality. The limiting factor at this point actually seems to be the lack of the middleman to bring advertisers and end-users together. We've talked to a few providers, but their screen count is quite low. They simply don't have the financial backing to deploy the number of screens necessary to attract major advertisers. It will take someone willing to make a significant investment to make this concept work. Major advertisers want eyeball counts similar to that of more traditional advertising mediums, and to do so, a provider will need to install screens by the hundreds — if not thousands — to capture the attention of advertisers.
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