7 September 2021
By Craig Berger
The cost of digital signs has continued to drop in recent years, making them increasingly accessible to retailers and institutions, but they are still an enormous commitment in money and time to install and manage. Before developing a digital sign strategy, it is important to understand the return on investment (ROI).
Return on experience
There are multiple metrics and approaches an organization can use to justify the need for digital signs. One simple option, which encapsulates most of the metrics needed to make a decision, is return on experience (ROE).1 To determine ROE, one should consider three elements related to effective digital sign decision-making.
An exterior digital sign supports and improves the organization’s brand and can have an enormous impact on the community’s view of the institution. Improving brand identity can include reducing clutter, using the sign as a community resource, and/or creating engaging, non-obtrusive content.
Digital signs can compete on cost per impression with many advertising mediums—including television, radio, and newspapers—but that does not mean simply installing a sign will be cost-effective without a clear sales plan and strategy.
Digital signage is more expensive to start up and operate, but grows more cost-effective when properly integrated into a larger strategy that maximizes the number of impressions per sign while driving content impact.
Companies employ a combination of approaches to analyze return, each one unique to the organization’s strategy for achieving success. One can analyze how successful companies integrate signs in their value calculations by observing those companies. A number of successful digital signage attributes can be found in the Signs and the Downtown Experience report developed by the Sign Research Foundation.2
Additionally, an article in Marketland, “8 Reasons Why Digital Advertising Works for Brands,” shows the effectiveness of digital media in the environment. The metrics show there is considerable variability compared to other media and illustrate the fact planning is important for project success.
A good digital signage solution with a well thought-out content plan can track customer habits and respond to them quickly. This includes tracking sales through changing messages on the sign or adjusting sign messaging quickly based on an environmental impact, such as time of day or increased traffic.
Weighing the benefits
Exterior digital signs are core to success for some types of businesses and institutions.3 For example, with newspaper advertising becoming increasingly ineffective, car dealerships are turning to digital solutions. Large, modern dealerships have the space required to build sizeable landmark signs and digital signs with complex product messages. Another example is town halls, where reader boards and screens are essential for alerting residents to community events and activities.
However, not all sectors have found benefits in exterior digital signage as of yet. Apparel stores, for instance, still rely heavily on outside-facing physical product display and quality graphics. Digital signs have yet to make an enormous impact in such environments, though better screen technology is starting to make inroads in urban areas.
Similarly, large supermarket chains have not been aggressive in using digital signage to market products at the vehicular level, though smaller markets with limited product lines have begun to experiment.
Developing a process for deployment
In order to ensure a successful digital signage deployment, it is important to clearly lay out a complete development process. This process includes numerous elements.
Analyzing a strategy
A complete ROE analysis, as outlined in the previous section, is crucial in developing a strategy for digital signs. A digital sign strategy can also focus on the following factors.
Maintaining brand identity through design
The design of the digital sign is often the most crucial factor in maintaining or improving brand identity. A sign that is not well suited for its environment can hurt more than help an institution. A good design development approach can incorporate the following elements.
Developing strong content
Effective content development is a comprehensive subject combining multiple technical areas, including the following.
The best attribute of digital signage, however, is often the most underutilized. Digital signs can be used as a tool to experiment with different messaging, employing the capability to monitor results to refine messages for improved effectiveness. Strong digital software can quickly analyze and react to changing environmental conditions.
Selecting the right hardware
Exterior digital signage hardware options present significant price differences based on resolution and are usually divided into four areas.
Overcoming the difficulties of implementation
One of the biggest roadblocks to the adoption of exterior digital signs is the difficulty of implementation. Outdoor signs require management of the sign approval process, as well as comprehensive installation management.
Although most sign codes are only comprehensively updated every few decades, one of the most important trends in this sector is increased standardization of both sign code best practices and fabricator installation knowledge. The ability to navigate these issues will likely continue to be a critical differentiator for sign fabricators.
Ongoing management and maintenance
Digital signs require extensive and ongoing attention to maintain their effectiveness. Three considerations are particularly crucial.
Remote analysis and updating
The ability to update and monitor the sign frequently is crucial to maximizing the relevance (and therefore results) of the content. Larger companies have the ability to co-ordinate multiple digital signs, making them a platform for nationwide campaigns.
Illumination levels management
The ability to manage illumination levels between day and evening use both extends the life of the sign and allows for better compatibility with the community.
Having a rapid maintenance plan is crucial for digital signs. The Sign Research Foundation’s (SRF’s) report, Signs and the Downtown Experience, shows broken digital signs have a significantly negative impact on brand identity.4
Trends in sign development
In an interview, John Kunze (director, sign division sales, for U.S. outdoor digital sign manufacturer Watchfire) shared insights related to current sign development trends. The results of this interview are included below.
Analysis and flexible messages: The biggest success
Specific industries are learning from the successes of digital billboard companies and how they use digital signs to experiment with messaging and approach. Car dealers in particular have raised messaging to an art form to manage the showcasing of new cars and the movement of used ones. Some restaurants have also linked their messaging to the food supply chain, controlling waste by changing specials based on inventory.
The rise of streetscape digital
Big cities like Los Angeles and New York are seeing digital signs at the pedestrian level combined with larger landmark applications. The LCD and LED technologies behind this trend are growing exponentially and may soon move to smaller cities and towns as an essential feature of appealing urban environments.
Content is king
Hardware is getting better and better, with 10-mm (0.4-in.) boards becoming an industry standard. That being said, content management is the clear differentiator, with more powerful templates and premade pieces emerging. Companies are taking their signage to the next level by linking multiple screens in different locations through cloud technology to run larger marketing campaigns. This completely changes the way digital signs are seen, from singularly owned to platforms for multi-level product marketing.
Greater adoption: The biggest challenge
Digital signage technology is still in the adoption phase for hundreds of companies. It will mature as companies grow more sophisticated in their use of the technology. Until then, the key is education. The more people know about digital signage, the more informed decisions they can make.
1 For more, see John Cain’s “Measuring Return on Experience: It’s ROI for the age of storytelling,” published in Marketing Magazine in June 2014.
2 For more information, visit signresearch.org.
3 More information on digital signage can be found at www.digitalsignagetoday.com or www.thesignagefoundation.org.
4 Further resources from the Sign Research Foundation include “Effectiveness of Outdoor EMC Advertising Signs” by Hendrikus van Bulck, “EMC and Digital Sign Issues” by Mike Freeborg, Wendy Moeller, and Paul Drury, and “The Economic Impact of Exterior Electronic Message Boards.”
[BIO] Craig Berger is currently chair of the Visual Presentation and Exhibition Design Program at the Fashion Institute of Technology in New York City, as well as a consultant on professional, manufacturing, and academic projects. He has been a researcher and writer for the Society for Environmental Graphic Design (SEGD), International Sign Association (ISA), and Sign Research Foundation (SRF). This article is based on a white paper he prepared for ISA. For more information, e-mail firstname.lastname@example.org.
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