Digital signage is booming: Psst, I'm talking to you (Commentary)

Oct. 26, 2011

by Alex Romanov

President and CEO, iSIGN Media


The billboard's got brains.

Well, not exactly human brains — yet — but they have definitely become smarter as the billboard of yesteryear has given way to billboard 2.0: the interactive digital sign.

While their popularity has been on the rise in city centers and downtowns for years, only recently did mainstream media start paying attention to the boom in digital outdoor media. Back in April 2011, The Economist wrote an article called "The Billboard Boom," predicting that the future of digital out-of-home advertising was glowing fluorescent bright, and represents a market whose global share would grow some 8.3 percent, or about $26.4 billion in 2011 alone.

Digital signs move beyond the single static message, and can be tailored almost instantly to current news and events — ultimately driving increased revenue for a digital sign-using company and greater customer participation for future marketing promotions or campaigns. Or, in other words, loyalty.

Growing Pains

But in order for this to occur a few developments need to happen first. Right now there are still too many platforms for distributing, managing and displaying content over the literally thousands of networks in place today. Without that streamlining (although common for an industry still in its infancy), advertisers will have trouble launching "big buys" like they already do when taking out TV and print ads. Big buy challenges aside, Veronis Suhler, a private investment company, nevertheless forecasts the amount of advertising dollars spent on all forms of "alternative advertising" will grow to $139 billion in just the next two years, representing nearly 30 percent of the total advertising and marketing spending. Intel has also revised their estimates of the total number of digital signs to 22 million worldwide in 2015 versus 16 million in the original calculation. In order to fully grasp this growth digital sign operators still need better metrics determining how effective their campaigns actually are, identifying who is watching what sign and when, along with demographics, and for how long.

Even with some expected growing pains, the message to join the digital billboard revolution is being sent to consumers and advertisers alike.

The very notion of "living billboards'" potential was given another jolt forward as posters for the Steven Soderbergh film "Contagion" were made from live bacteria and mounted throughout downtown Toronto. The Franken-signs literally grew a "viral" message right in front of spectator's eyes, to promote the film. While The Economist didn't predict that billboards would "grow" quite like that, they were absolutely correct in their prediction that spending on billboards and digital signage would grow. In fact, ABI Research shows that spending on the global digital signage market, including hardware and software, is expected to grow from $1.3 billion in 2010 to $4.5 billion by 2016. Internal research conducted by digital sign company Adcentricity, in its "2011 Digital-Out-Home Outlook & Planning Guide," estimates the $4.5 billion spending threshold will be crossed in 2013, three years earlier.

Huge Investment in DOOH

Adding to digital billboards' domain, CBS Outdoor announced in September 2010 that it was expanding its 40-unit set of double-screened digital signs (signs with front- and back-facing screens) by distributing 110 additional signs, a 275-percent increase. Placed atop subway entrances around Manhattan, it's expected that the number of people — and mobile devices — interacting with these signs will sharply increase well beyond the 2.8 million people who already pass by the original 40 each day.

And then there is iSIGN's own digital signage expansion into the Mac's Convenience Store chain, a network of 1,400 stores throughout Canada, bringing the company's total number of network screens to almost 6,000. One of the largest in North America and one of the first networks anywhere to have signage content broadcast to the mobile devices of all customers in each of the 1,400 stores. Now imagine that reach for a few moments.

These are just two examples out of many. So why is digital-out-of-home's future so bright?

The answer is twofold: one part technological and another part advertising and customer driven. First the technological: Since 2004, the unofficial dawn of interactive digital signage, installation and operating costs have dropped by more than half. Screens are also more durable, lighter weight and longer lasting. In short, in terms of technology, digital signage has come of age.

From a customer-consumer standpoint, advertisers are increasingly looking toward digital signage as the way forward in closing the so-called "digital marketing loop." Considering its potential to reach so many people with relatively little effort, it's no wonder the digital signage industry grew by nearly 15 percent in 2010 and similar robust growth is expected for this year and next.

Looking ahead, Intel predicts digital signs will allow for multi-user, multi-touch holographic display, giving customers the opportunity to inspect their future purchases in 3-D. Any more realistic and consumers would need to buy the physical object.

Meaningful Data, Increased Effectiveness

And that's exactly my point. Googling "3D digital signage" returns some 5.6 million results. Clearly advertisers are thinking. Adopting current digital signage technology now will leave companies better able to compete once the 3-D revolution takes hold. Returning to 2-D, data suggests today's digital signs have already proven their worth: Digital signs increase the average purchase amount by 30 percent, grow overall sales by 32 percent, and increase repeat buyers by 33 percent. Attract, transact and measure indeed!

Earlier this year, Nielsen identified 2011 as the "Year of the mobile" with Americans spending an average of three hours on their mobile phones every day. That's ample time for advertisers to get in on the act. Combined with downwardly spiraling installation costs, digital signs, like their more traditional counterparts, will ultimately shrink in size, and be found in other public places like airports, banks, and malls — even bathrooms.

Like the early modern billboard campaigns of the 19th and 20th centuries that sold the first automobiles, offered the first political statements, or mobilized a nation for war with signs like "I Want You For U.S. Army," digital signs continue their tradition of speaking to the masses without the high cost. And today's pixilated wonders preserve much of that power.

The biggest difference now? Today's signs — and mobile phones — speak back. Uncle Sam only pointed a finger with his message; whereas the dynamic duo of mobile and digital signage gives advertisers infinitely more power to make their messages measurable and accountable like never before.


Romanov is president and CEO of iSign Media Corp., which offers solutions for broadcasting advertising and messaging to mobile devices and data logging the responses via Bluetooth/SMS/MMS for immediate analysis.

Learn more about digital out-of-home advertising and digital signage and mobile interactivity.

Topics: DOOH Advertising , FAQ , Networks , Trends / Statistics

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