The Real Cost of Digital Signage

Certainly the static sign universe is thriving and creating a huge business that allows numerous companies to prosper. But in a day and age when the average person spends approximately eight hours looking at a display—in multiple formats from television and computers to smartphones and tablets—we cannot ignore the demand for integrating technology into every aspect of our lives.

We, as humans, are evolving how we want to consume information. We want instant access to information provided to us in multiple media formats—but at our control. We want to manage and interact with that information flow—but utilizing only the information relevant to us personally.

With this revolution in technology changing our lives from work to home, smart signage, in the form of dynamic digital signage, is a natural fit. The digital signage market presents a new frontier for many companies, one that is growing at a significant rate (even with the still-challenging economy we face today).

Industry analysts state that the digital signage market is growing at a staggering 20 percent or more per year, and we can anticipate $7 billion (yes, with a B!) in sales during 2013. This makes for a tempting target, as we all want to help our respective businesses grow and prosper.

Digital signage can represent a path to profit growth, but it does pose some unique challenges.

For example, while customers are starting to ask for and demand the benefits of digital signage, the cost is still high to deploy, and we need to explain why digital signage is going to cost what it does. There’s a greater purpose than simply justifying the cost as an explanation of where each dollar goes however.

Brawn BIf we want to sell digital signage to a customer, the job is not just to explain what their investment is going to provide. We also need to show what the actual realized return on that investment may be and what really defines the cost of a signage system when you factor that into the equation.

In my opinion, the focus on developing a digital signage prospect should be on education, preparation, and planning.

Education. The first piece of advice I would offer to someone getting into digital signage as a beginner is to get educated! I don’t care how much you know about IT, AV, or traditional signage—this is a new animal that combines parts of all three of those competencies into a new kind of solution.

The first thing to do would be to get the lay of the land. Attend a related tradeshow and check out what’s available. Take the Digital Signage Expo in Las Vegas at the end of February, for example. The entire digital signage industry will attend, since it’s the largest show of its type. This represents a great way to meet the players and attend some of the excellent educational seminars.

Meanwhile the Digital Signage Experts Group offers the industry’s only certification program on digital signage. The classes are offered online and live at the Digital Signage Expo. These courses are full-day dives into the industry and provide the initial knowledge to get started. One thing you should take home from the Expo (and hopefully a DSEG course) is that this whole concept is not only about the technology but also what the technology really can provide.

Preparation. When selling a digital signage system to a prospective customer, we all know they are sooner or later going to demand, “But what will it cost?” This is not an easy question to answer because the cost is going to appear to be high compared to using a static sign in the same application…at first.

It would be simple to define the issue of cost as an itemized list: “The flat panel costs $800, a mount is $200, the player PC is $900, and the software is $500, meaning $2,400 per screen.” But honestly, what have we just explained? We have indeed shown them the price of the system but not its true cost.

Brawn CIn order to give clients the real cost, wouldn’t we have to explain what they’re really going to get out of the system? Doesn’t that mitigate the dollars spent on the price by a return on the investment? I would say definitely so, and we have to take that into account. Of course, this means we must be able to help define that return in order to successfully demonstrate this to the customer.

Return on investment is always a hot topic when discussing company purchasing. If the solution has a higher price than the problem is costing, well that probably means no sale. If the problem costs more than the price of the solution, now we’re talking!

The benefits of a digital signage system that has been properly designed can outweigh the apparent high cost per display to deploy it.

Everyone always immediately considers ad-based revenue, and that definitely has its place. In certain applications, such as retail, QSR, or hospitality, ad-based revenue is a natural fit and can definitely mitigate some of the expense of purchasing the signage system. In some cases, these revenues (if the venue fits and the audience is there, demonstrable through metrics) can actually make the system turn a profit. This is not every system, and digital signage has the potential to go beyond simple advertising signage. The return on investment may realize itself as an overall sales lift, due to more information and brand awareness.

What about when the signage isn’t going into a sales-based application—such as in a doctor’s waiting room or a school? Here we have to discuss soft return on hard dollars spent. This is truly a return on objective and not a strict return on investment in terms of dollars. But these things can deliver enhanced experiences, better repeat business, improved tenancy, and increased attendance, which are definitely all positive results and solid goals.

Planning. In order to articulate these returns and define for the customer what the actual “cost” of the system will be when price is mitigated by return, we need to be able to assist them in defining the system clearly. This is why I say technology is not the primary focus in designing and presenting a digital signage system.

Brawn DWe have to define what the customer is looking to get out of the system:

If they are approaching you asking for a proposal, make sure to review in detail what they expect it to do, what it’ll be judged on, and what kinds of results they’re looking for.

If you are approaching them, make sure to think outside-the-box and point them to the many types of returns they can expect to see: Lower costs due to reduced print material. Better deployment of information with less labor hours. Increase in sales lift or return customers. Reduced perceived wait times.

Each of these benefits should be taken as a “reduction” in the system cost. Objective is key, and the return has to be considered to truly define the cost of a system.

The customers are out there, and with a little research, some careful partnerships, and an understanding of how to define the benefits in a way that explains the cost, anyone can use digital sign systems as a form of business growth. It won’t solve every problem, but it can add a nice uptick to your bottom line and give you a new avenue that you may not be working in today.

Note: To read more, check out the February 2012 issue of Sign Builder Illustrated magazine.

—Jonathan Brawn

Brawn EJonathan Brawn, CTS, ISF, ISF-C, DSCE, is a principal of Brawn Consulting, an audiovisual consulting, educational development, and marketing firm, based in Vista, California and a founding member of The Digital Signage Experts Group. Brawn will also be a Digital Signage Expo 2013 speaker in the February 26 pre-show DSEG and DSDE Certification programs, as well as a member of the DSE Advisory Board Consultant’s Council.

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