The diluting of mass media and shrinking attention spans of global consumers by media clutter led marketers to gravitate toward the digital signage medium, which can deliver relevant messaging to a finely-targeted audience, new research from Frost & Sullivan suggests.
Frost & Sullivan's "Analysis of the Global Digital Signage Systems Market" finds the market earned revenue of $1.27 billion in 2012, according to an announcement from the research firm. This is estimated to reach $2.55 billion in 2018, driven by the emergence of turnkey digital signage solution providers across regions. The research includes a market overview, external challenges, market and technology trends, forecasts, market share and competitive analysis, and a hot company watchlist — in addition to breakdown analyses of digital signage displays, software and media players. The analysis also looks at various verticals, including retail, transportation, hospitality, corporate, education, government and others.
The branding opportunities and interactivity offered by digital signage screens boost their popularity among advertisers and network owners globally, the firm said in the announcement. Apart from product quality, one of the key objectives for marketers in the current in-store environment is creating a relationship with the consumer through enhanced brand experience. As such, digital signage is a more effective advertising medium than traditional in-store communications, as it increases sales and saves costs through superior shopper engagement.
"When properly executed, in-store digital signage reinforces purchase behavior or creates the impulse to make incremental purchases, and are therefore rapidly gaining acceptance," Frost & Sullivan Digital Media Program Manager Aravindh Vanchesan said in the announcement. "Content can be highly targeted and, since the merchandise is close to the message, the call to action is clearly communicated to accomplish the desired objectives."
Fundamentally, a network deployed to promote a retail brand or provide an improved shopping experience is likely to have better growth prospects than a network solely dedicated to generating advertising revenues, the company said. Adopting a hybrid business model minimizes risks and assists in survival during future downturns. This is especially crucial as the market has been affected by the unstable economic environment, and a number of retail networks financed purely by advertising revenues prior to the slowdown are under tremendous strain after ad budgets were slashed.
Networks owners should integrate the digital signage network with in-store point of sale systems, IP networks, wireless connectivity and retail application software. Synchronizing existing in-store marketing and promotional strategies with the on-screen messaging along with a clearly defined content strategy is critical.
"Consolidation is crucial for system suppliers to grow quickly by adding product lines inorganically as well as for expanding into a new region," Vanchesan said. "This trend is expected to be positive for the industry as it continues to evolve from an emerging market with hundreds of competitors to a more mature one with fewer, well-grounded market participants."
Learn more about digital signage trends.