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Some see digital dynamic signage, featuring digitally-driven screens networked from a central location, as a wave of the future. With estimates of growth running as high as 25 to 30 percent per year, it's hard to argue with them.
It's much more difficult to say whether dynamic signage is a potential money maker for traditional print shops. Dynamic signage is very different from conventional static signage, and involves a large investment in hardware and knowledgeable IT personnel. Compounding the challenges is the reluctance of many to embrace this advancement, and competition already in the field.
To determine whether this technology fits in your future, it's essential to understand just what dynamic digital signage is. Dynamic signage, Dick Trask, marketing director with Philadelphia, PA-based Scala Inc., says, involves controlling a network of screens from a central location, allowing the provider to deliver messages to anywhere in the world from anywhere in the world. It is all about delivering the right message at the right time to the right person. "The advantage of digital signage is you can customize your message and refine it in such a way that it reaches a specific audience with a specific message at a specific time," he explains.
"Let's say you're walking down your grocery aisle, making a decision whether to buy a bottle of olive oil. You pick up a bottle, and the digital sign gives you an ad for that product. Digital signage can help you make that buying decision in the last critical few feet of decision making. It's better if it's in the aisles, where people are making a decision. That's because no one is going to get out of line to go buy something else."
Two Primary Ways to Use
Trask reports there are two typical applications. One involves selling advertising on your own network to consumer packaged good brands. "Let's say you're in a store full of products and you want to sell space," he hypothesizes. "You sell advertising space to those branded products."
The other is a completely self-contained dynamic digital signage network that reflects products and services being sold in that retail environment. "Let's say at Best Buy, which has numerous departments like video, audio, televisions, computers and appliances, each department would have at least one digital signage screen," he says.
"Each department would have its own message reflecting the type of product sold in that specific department. It's a self-contained network in which you're not trying to make revenues on selling advertising space. It's your own network, used for your own in-store strategy."
It is not designed to replace other components of a store's advertising strategy. Stores will still require TV and radio advertising, circulars, and printed components. "But what's unique about digital signage that you can't do with those other media is deliver messages in real time. You can deliver different messages to morning commuters, afternoon soccer moms and evening students."
Shops interested in offering digital dynamic signage could be network operators, operating networks for customers whose print work they have handled, Trask adds. Or, they could be a reseller of the technology. Their customers may want to take advantage of dynamic signage opportunities, allowing them to become middlemen between the customers and a network operator.
As for the generation of revenues from dynamic signage, Trask says Scala Inc. provides margins to its resellers that essentially work as commissions. In addition, print providers have the additional opportunity of providing value-added services. "Let's say Company XYZ is a print shop, and has some unique services it offers customers," he remarks. "If those particular services tie in well with the delivery of a digital signage system, they multiply their sales potential by adding services to the dynamic signage."
Trask is bullish on the future—and the present—for dynamic signage. Remarking "dynamic signage is booming right now," he says there was a time not all that long ago when the industry was still seen as an emerging technology, but it has turned the proverbial corner. "There are a lot more companies involved in the technology and in providing services, and a lot more customers embracing the technology," he reports. "Our revenues have doubled this year, vis-à-vis last year."
A Differing View
Not every expert is convinced dynamic digital signage is the right avenue for print purveyors to pursue. One such observer is Norman McLeod, associate director in the market research department with InfoTrends.
McLeod agrees the industry is expanding rapidly, noting 2005 and 2006 have been "very strong years" for dynamic signage. "In both years, the growth of digital dynamic signage has exceeded our forecasts," McLeod says.
He's more reticent about advising print shops to pursue dynamic signage as a profit center. "In one sense, the barriers to entry are fairly low, in that the technology is quite available off the shelf," he says. "But in the sense in which the barrier is high, you have to have a lot of high-level IT expertise on your staff. The things that bring value are the assembly of these components into a coherent whole."
Those components, he adds, include the displays, the wiring of the displays, servers, and broadband communications. All have traditionally been handled by a systems integrator, who often performs as a subcontractor in setting up the systems.
For these reasons, McLeod believes print shops interested in adding dynamic signage to their capabilities would have to set up a separate business unit to do so. The reason, he asserts, is that there are no natural synergies between a traditional print shop and the creation and operation of a digital dynamic signage network.
Those that do expend the time, expense and effort must confront one other reality. "There is no shortage of competition out there in that marketplace," he says.
One Company Goes Dynamic
While acknowledging dynamic signage is only going to grow in the years ahead, John Sheehan also hesitates to urge smaller print shops to enter the market. Sheehan is president of Coloredge, a New York City company that has evolved into a visual communications enterprise.
"We see it as the future of our industry, with retailers eventually replacing static signs with plasma screens and interactive video," he says. "But I don't know if [shops] should get involved. There's a pretty sizable investment if you go whole-heartedly into it. You're going to be in the business of asset management and providing information."
In the future, many companies like his will provide content for floating video screens in retail establishments, Sheehan believes. Theirs will be the content provision business rather than the hard signage business. But he doesn't predict a major sea change in the way messages are delivered any time soon. Retailers are familiar with static signage, and are hesitant about the investment involved. As a result, committing them to dynamic signage is a "hard sell." There are too many barriers at present to keep retailers from asking, "Why should I change?"
The appeal of dynamic signage is unmistakable. If a retailer can provide multiple and changing messages at one location, based on the levels of store inventory or the way shoppers and their preferences change over the course of a day from morning through afternoon and evening, it certainly makes sense to do that.
Retailers will find added incentive to make the transition to dynamic signage as the costs associated with the technology decline, Sheehan adds. For instance, when Coloredge began considering dynamic signage as a business capability, plasma screens were priced at $9,000 each. Today, that figure is $1,800, and still declining.
"We're probably another full cycle, or a year, until the screens come down to an affordable price and reach an appropriate level of reliability," he remarks.
Print shops interested in adding dynamic signage will face a challenge in making the transition, because the content provision business differs greatly from static graphic signage. "You're going to be marketing it by showing what you can do with the technology to your current customers," he adds.
Revenues will flow from an asset management form of business, in which clients will pay for storage of digital assets. As they retrieve and send and use those assets, they will be charged for that use, Sheehan says. They will pay a service provider to make sure the information is housed, and that it is accessible and changeable. Clients will also pay providers for ensuring the systems are redundant and provide protection from data loss, and that dynamic signage systems work in tandem with their accounting systems so the results they achieve can be measurable.
Jeff Steele is a freelance writer who specializes in the field of business management, marketing, and protocol, especially as they apply to wide-format printing firms. Contact him at scribsteel@americom.net.
author: BY JEFFREY STEELE