6. Not adequately budgeting for ongoing costs
Too many companies purchase a digital signage system just based on a vendor’s website or glossy brochure touting everything it can do, only to find out later many capabilities will cost extra or require a yearly licence renewal.
Others do not recognize the potential of the medium at first, only to find after it is implemented they want to add features beyond its original scope, which end up being expensive to add or outright unavailable, given the nature of the system they have deployed.
By way of example, Rich Site Summary (RSS) Extensible Markup Language (XML) fees, remote control and management and playback verification are all standard features with some digital signage packages, but cost extra with others. Software as a Service (SaaS) fees must be considered on top of hardware and labour expenses.
Software upgrades can get expensive, especially if the developer is issuing them with fixes every few months, and so can per-user licences for publishing, meta-tagging and IPTV streaming, training for new users and technical support after the initial implementation. Other additional expenses may arise relating to shipping terms, return policies and warranties.
So, before implementing a system, it is important to view in-depth demonstrations and take time to research which features are standard and which are optional (or unavailable). Extensive negotiations, including a number of requests for proposals (RFPs) and/or requests for quotations (RFQs), may be needed to help specify the costs of the needed system.
When planning, establishing a pro forma budget is recommended, to try to forecast the early and ongoing expenses of a fully networked, multi-screen rollout, as well as anticipated revenue if the project is intended to generate additional business, e.g. through digital out-of-home (DOOH) advertising. Beyond factors within the vendor’s control, there may be extra infrastructure expenses, such as for cabling, wall plates, backup servers, uninterruptible power supplies (UPSs) and surge protectors or filters.
Some networks start out using consumer-grade displays, but for digital signage that will run for most hours of the day, these products will quickly reach the end of their useful life, as they are likely to overheat and fail. Instead, provisions for commercial-grade screens are needed from the start.
As for digital signage content, a separate budget will need to be developed for producing or buying still images, video footage and/or animation. If third-party advertising will
be part of the mix, there will still be costs associated with providing audits and reports for those advertisers.
When evaluating the total cost of ownership (TCO), there will need to be enough leeway for line-item expenses to account for any unanticipated cost overages, spikes in utility rates, staffing shortages and code compliance issues. Also, within the first year of operation, it is fair to expect a hardware failure rate of about three per cent, so the costs involved in having backup equipment and a vendor that can be reached 24-7 will prove beneficial in the long run.
The more complex the network, of course, the higher the overall initial and ongoing costs will be, but the cost per screen will generally be reduced as the number of screens is increased. Also, as more suppliers enter the digital signage market, equipment costs will continue to come down.
The key to keeping the budget reasonable is to ask thorough questions right from the design phase. A clear matrix of features and price levels is needed, to ensure the right choices are made. And as mentioned, ‘unimportant’ features at the beginning may become ‘important’ features in the future, which should be considered in the context of how the system might be upgraded over the long term at a reasonable cost.