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Digital Signage: Building A Business Case For Overhead Display, Narrowcasting Networks And Electronic Billboards

May 14, 2008
Businesses are increasingly turning to electronic billboards, large plasma display screens and their own in-location narrowcasting networks (referred to in marketing as "digital signage") to make their business case and sales pitch to customers and clients as a major part of their marketing efforts. It is estimated that the number of sites hosting narrowcasting networks that market for third parties - these are not the displays and digital signs where a retailer promotes his or her own products - are expected to grow from the roughly 210,000 sites currently hosted in the retail, hospitality, hospital and transportation sectors where digital signs are most predominant, to over 850,000 by 2011.

This statistic, if nothing else, makes it clear that the future of digital signage and electronic billboards has great potential. When building a business case for digital signage, you need to focus on the potential and address some of the challenges.

Unlocking the Potential of Electronic Billboards

When examining your business strategy and plan for deploying digital signage, be sure that you have defined the goals you have in mind for your digital signs. What do you want your digital signs or narrowcasting network to communicate? How do you want it to shape or influence the behaviour of your customers or clients? The most common goals cited for utilizing digital signage are the potentials for boosting sales, building brand and reducing perceived wait times. A few examples of the versatility of digital signs may be helpful.

- Retailers can use digital messaging to inform customers about specials in-store, lead them to other areas of the store, and communicate branding messages.

- Banks and other financial institutions can post interest rates and provide messaging that distracts customers from long waits.

- Narrowcast screens displayed above gasoline pumps can market additional services and products - oil, car washes, other auto accessories - or they can be used to generate additional revenue by marketing the products and services of third party retailers and companies.

- Digital menus at quick service restaurants entice customers to buy more items. They can also speed up the service line by helping customers make their purchase decisions faster.

Challenges of Electronic Billboards

When planning your business case for setting up a digital media network as part of your marketing efforts, don't be blinded by the technological appeal and the potentials offered by increasingly sophisticated digital advertising software. Be sure to address the challenges as well. Here are some of the most common challenges retailers and others have faced in deploying, utilizing and optimizing their digital signs and narrowcast network systems:

- Cost is the most commonly cited challenge. The hardware is cheaper now and there is a range of options in type and size of screen that can help you control costs. You may have further expenses for content creation. Be sure to weigh these costs against savings in printing and paper. In doing so, note that digital signage allows immediate updates controlled from a central location, so there are no costly delays in getting new signs posted in stores.

- As it is for most marketing initiatives, content is one of the great challenges of digital signage. Messages need to catch people's attention in a matter of seconds. Sound is not usually an option in a retail environment, so visuals are key. These factors make it very difficult to re-use existing marketing collateral, meaning that new content is required.

- If you have a large organization that places screens in several locations, varying screen dimensions may force you to tweak content to make sure it is effective on screens of different sizes.

- Working with a digital signage provider that can supply and maintain both the screens and displays - the hardware - as well as customize and update the content - the software that runs and is run on a company's network - is a recommended strategy for meeting the challenges that arise as technologies improve.

Benefits of Electronic Billboards

The technical benefits of electronic signage are well-documented. It is immediate and flexible. Updates are easy and messages can be quickly changed to respond to varying demographics.

Integrating the business case for digital signage into your overall business plan based on projected sales increases, deeper branding of your services or products, and estimating the savings from increased efficiencies through the use of digital signs is a little more challenging, but it can be done.

A 2008 Digital Signage Today guide on the current state of the digital signage industry describes how to gauge customer response to digital messaging by comparing point of sale (POS) data to the digital signage playlist. Here are two examples of how this is done:

- A retailer uses its digital signs to promote a loyalty program. Reviews of when the promo spots were played can be compared to the times people signed up for the program to see if the digital signs boosted signups.

- A quick service restaurant can put a "coupon" code in its digital signs. When customers cite that code to order a meal, that data is recorded in the POS system, providing a basis for evaluating the effectiveness of the digital signs.

By addressing the challenges and using the evaluation methods outlined above, and working with an experienced and innovative supplier of digital signage and digital advertising software and content to meet this technology's challenges while fully reaping its potential, there is a strong business case for the deployment of digital signage, display screens and electronic billboards in many different sectors. The strong business model for utilizing digital signs and electronic billboards is evidenced by the strong predicted growth numbers for digital screens and narrowcasting networks in the retail, hospitality, hospital and transportation sectors where penetration by this innovative marketing technology is already greatest.
About the Author
For more information on digital signage, narrowcasting or digital advertising software visit EK3 Technologies Inc, at www.ek3.com at 1-866-353-8324.
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