Understanding the Challenges of a Digital Signage Advertising Network


Author: Judy L. Hoffman

Digital signage is fast claiming its place in the world of advertising. Increasingly businesses are realizing the benefits of offering customers an interactive experience as they shop in complexes, and hard statistics are being collected as various networks reap staggering successes.

Many people will argue that digital signage is simply over-rated TV advertising. But the industry is experiencing phenomenal growth amid the economic upheaval. In fact, InfoTrends/CAP Ventures predicts that the digital signage market will experience a CAGR (Compound Annual Growth Rate) of over 20%.

Driven by the desire of retailers and advertisers to better target consumers in the out-of-home media market, the industry stands to see a growth from over $600 million to well over $1.4 billion by 2013.

For the most part, "the largest single revenue component for this industry is and will continue to be external advertising revenues" reports the North American Commercial Digital Display Market: The Narrowcasting Advantage. Such ad sales are expected to see a CAGR of 40%.

Industries most likely to see this growth are:

• Financial institutions
• Out-of-home advertising networks
• Hospitality

The slowest growing sector will be the retail industry for various reasons that will be considered in this paper.

Platt Retail Institute predicts that the North American digital signage industry can expect to see a $2.0-2.5 billion dollar market for hardware by 2011. This translates into an estimated 900,000 screens at over 150,000 locations.

Platt foresees "the ad side of the business [to be] in the $3.5 to $4 billion range, for a total estimated North American market of $5.5 - 6.5 billion by 2011."

One firm suggests that between 2004 and 2011, the retail sector will double annually and predicts around 90% of retailers will have deployed digital signage networks by 2011.

It is obvious that businesses everywhere are recognizing the potential of DSANs. Those that are willing to take the leap are cashing in on the benefits. Companies that are considering adding digital signage to the advertising mix or would like to setup a network that offers advertising spots should be applauded for both recognizing the need and for taking the time to consider the challenges faced.

Articles to follow are:

• Understanding of DSANs and Defining an Emerging Market
• Successful Digital Advertising and Exciting Results
• Overcoming Those Nasty Obstacles
• It's All About Content and Location
• Measurement Matters

About the Author

Judy L. Hoffman has freelanced marketing and public relations services for over 20 years serving a wide range of industries worldwide and, while working as PR Specialist at Noventri (www.noventri.com), has nurtured a keen interest in the digital world and the effects of digital signage in the field of marketing and public relations. Hoffman is a freelance writer and has been published in numerous trade journals, newspapers, and online publications. Hoffman holds a Bachelors in Marketing Management.

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