Plummeting Prices Create A Huge New Market For Digital Signage

As unlikely as it may seem, one of the more intriguing and glossy displays of digital signage just might reside in the lobby of the Denali Alaska Federal Credit Union in Anchorage. Customers begin their banking experience by entering the lobby and placing a hand on a biometrics reader which identifies them to the credit union's staff. Their names pops up on the plasma screens when their turn to visit a banker has arrived.

The bank has no lines and no teller windows. Instead, a personal banker sits at a desk and handles a customer's financial needs, from withdrawing money to buying a CD. The lobby features laptops on counters for customer use and nine plasma screens advertising bank products and personal financial news, the hope being someone watching will potentially learn enough about a new service to consider asking a banker about it.

With plasma screens still a relatively novel technology, customers reportedly like the option of watching something while waiting, says Jim Kueneke, senior vice president of St. Louis-based New Ground, a systems integrator which installed the technology and manages the bank's screen content. And that's true in other industries, too, where digital signage of the kind found in Denali's lobby has - exploded - into a new force for distributing information and entertaining clients.

Once mainly on public display in Times Square and the Las Vegas Strip, digital signage can now be found in several museums of the Smithsonian, new libraries devoted to Abraham Lincoln and Bill Clinton, transit stations, convention centers, government buildings, casinos, courtrooms, colleges, corporations and even churches. Plasma televisions, liquid crystal displays (LCDs) and interactive kiosks have become - the hardware trio serving as the backbone of digital signage networks -- have become common in many business and retail environments. - You - re seeing it everywhere - in retail oriented environments, in transportation, airlines and where you have public information and - way finding - information, - says Brad Gleeson, president and chief operating officer of Seattle-based ActiveLight, Inc., a reseller digital equipment and services from 1,750 vendors.

Raising interest in the digital signage industry also has been the entry of two major corporations. St.Paul-based 3M, Inc. purchased MercuryOnline (Seattle, Wash.), a well-regarded digital signage integrator. Stamford, Conn.-based Thomson SA acquired Premier Retail Networks of San Francisco, which operates one of the most successful digital retail networks in America, Wal-Mart TV. - Observers are saying our purchase of Mercury Online and Thomson's of PRN suggests the (digital signage) market has reached a tipping point and it has become a real market, - says Steve Saxe, product manager for 3M Digital in Bainbridge, Wash.

[sub]Rapid Growth Curve
Fueling digital signage sales has been dropping costs and the ability to economically manage networks from a central location. 'the cost of these displays has gone through the floor, - says Stan Woodward, chief executive officer of Reflect Systems, Inc. in Dallas, Tex. - It's driving a convergence where retailers are looking at digital signage for point-of-purchase, end caps, tabletop signage and so forth. -

Gleeson says standard 42 inch plasmas retail for around $2,000, LCDs go for $3,000 for a 30 inch screen or smaller. Retailers can outfit a store with a network, software and monitors for as little as $10,000 for a store, he says, a price which drops as more stores are added. While projector prices have tumbled, too, integrators point out replacement bulbs still cost as much as $400 to $500, while plasmas and LCDs can last years with a minimal amount of maintenance.

Industry sources are beginning to make the argument digital signage will have a strong return on investment for users. Companies creating networks to sell advertising for in-store digital signage - more on this sector later - see positive returns after two years, says Kueneke. His company's own research shows 75 of customers leaving a bank branch with digital signage recall seeing the digital displays and 24 percent remember the messaging they saw, he says.

The decline in traditional television advertising as a way to each consumers and a video-literate generation weaned on moving images as two factors creating interest in the retail and corporate spheres. With the popularity of TiVo and DVD recorders a consumer can easily avoid commercials or, because of media clutter, simply forget them by the time they go shopping, says 3M's Saxe. Hitting them with commercials as they shop has a greater potency than network television.

Corporations using digital signage have different motives. - For employers I see digital signage networks as a better way to speak to stakeholders and employees than traditional (written) media, - says Saxe. - Particularly with one segment of the demographic, young people, you need the rich media experience that digital signage offers to reach them. They expect it because they - re all about audio visual communication. -

Jeff Collard, president of the Houston-based software vendor Omnivex, says much of the publicity in digital signage has focused on retail yet in his experience represents that sector only represents around 40 percent of the market, while corporations account for 20 percent, transportation 17 percent and the rest a mixture of manufacturing and other industries. - Our clients see it as a strategic advantage, - he adds. 'the corporate market for us and others has been a fairly good sized one for digital signage. -


[sub]Retail Applications
Dozens of retail applications of digital signage exist ranging from duty free shops to large retailers. Jeremy Bruhn, CEO of San Diego-based Allodic Marketing, Inc., has installed digital signage, including projectors, in 18 retail locations in the action sports industry, among them surf shops. The shops advertise themselves 25 percent of the time on the network's 20 minute content loops, their suppliers take the majority. - We - re in the process of doing a specific study now (of ROI) but we - ve had good initial results, - he says. - Products advertised on the network like goggles and DVDs have seen some pretty significant results. It seems to work on impulse buys. -

One large company that did an ROI on its in-store network found a definite lift in sales in 2004. CompUSA equipped 191 stores with digital signage, half of them with plasmas featuring ads from seven advertisers on a network managed by Dallas-based In-Store Media Networks, Inc. The other stores had plasmas with ads associated with CompUSA but did not feature brands found in the store. The stores with commercials from suppliers on their digital signage saw a 29 percent sales increase over those with generic CompUSA advertising, according to a study by In-Store Media.

Another project Woodward participated in was the development of a network for Petro Shopping Centers LP of El Paso, Tex. With a captive audience composed of drivers taking a break from the road in lounge areas, the network advertises tires, valve stem replacements and other truck-related content on LCD screens managed at the company's main office. - We - ve seen a sales lift in those retail stores with the screens, - he says. 'the company (Petro) has a captive audience that is seeing content that is relevant to them. -

[sub]Corporate Apps
Outside of retail, digital signage applications have grown increasingly visible in business and government buildings. One business application that has seen success is placing digital signage in call centers to give employees real-time data and applause when they - re doing well. Ceridian Corporation of Minneapolis uses signage in 26 call centers to give employees a look at volume of calls, wait times and how their unit has been performing, says Randy Young, director of marketing and business development at Magenta Research, which manufactures technology that distributes video signals on networks. The Ceridian installation, a user of Magenta Research's technology, won a 2004 DIGI Award for Corporate Installation from Active Light.
The majority of corporate users, however, place plasmas in lunch rooms and other high traffic areas while broadcasting content focusing on employee and human resource communications, says Collard. Unocal, the giant oil and gas company, uses plasmas in facilities in Texas and at its corporate headquarters in El Segundo, Calif. to inform employees about company news, human resource issues, the weather and upcoming company events. Often, the information will display a web link to more information which employees can find on the company's intranet, he says.

Plasmas have even found their way into executive offices. One of Collard's clients placed a plasma in the chief executive's officer so he could watch real-time information showing firm's production current production levels and other data. A car company installed plasmas on the production line to tell employees which parts to install on each vehicle, he notes, while another manufacturer deployed them on the shop floor to highlight productivity throughout the day.

A nice plasma in a corporate lobby serves as eye candy for visitors looking to kill time before appointments. - A lot of corporations are putting screens in their lobbies so people have something to do when they - re waiting, - adds Young. - If you have something to look at it reduces the perceived wait times. -

Finally, it's hard to attend a conference without bumping into an LCD or plasma, for good reason. They work well to showcase products, presentations or to serve as interactive kiosks, says Bill Gerba, CEO of WireSpring Technologies, Fort Lauderdale, Fla., a software developer for digital signage. A large rental market exists for exhibitors who don't want to buy and lug around plasmas. 'they - re great for trade shows because they give a company's booth a sexier appeal and they give you a high tech, high class type of feeling, - he says.

[sub]Setting Up A Network
Creating a network for a store or corporation requires a few decisions. One issue is whether to use plasmas, LCDs or a mixture of both technologies. Since plasmas boast bigger screens for cheaper prices they work in locations where living large matters and the lower cost proves attractive. 'there's an awful lot of projects using plasmas that are going on right now - for that reason, says Gleeson. Plasmas generally last only around two years -- although tender loving care can wring a year or two more out of them -- while LCDs boast a longer life span and the advantage of being brighter and able to display sharper images, especially in areas with low light or glare, notes Bruhn.

Many installations have a mixture of both technologies. As Bruhn suggests, a well-placed 15 to 17 inch LCD screen - can be much more effective than a 42 inch plasma on a wall somewhere. - Smaller LCDs serve nicely as end-caps displays and other spots where they will catch the attention of browsing customers, he says.

Most networks approach content in two ways. One is to develop their own, typically a practice of corporations with networks. The second is to have content managed remotely by a network provider such as Allodic, In-Store Media or New Ground. These companies sometimes sell time on the network to manufacturers or acquire content appropriate to the retail operation. New Ground manages networks for more than 500 mainly banking clients, says Kueneke, and they feed those networks with information from a national personal financial content provider.

Network firms dynamically manage content, playing information and advertisements based on time of day and other variables. Some providers run 35 minute to hour loops of the same presentation of advertisements throughout the day, others change it more frequently. With the growth in sophisticated switching technologies, local area and wide area networks can sometimes manage the addition of a digital signage network or clients can run them through inexpensive cables, notes Young. Much will depend on the network's size, the number of monitors and other factors.

All decisions - about content, hardware and software -- depend on what clients want digital signage to do, notes Gleeson, from moving products to touching the lives of employees. - It's all about what you - re trying to accomplish, - he says. 'the challenge is to state your goals and what value and effect you want from digital signage. From there you will find plenty of service and content providers to help give you the best solution. -