07.13.2004 12:00 PM
Digital signage still on the rise

While the primary tools for digital signage — plasma display panels (PDPs), in particular – are set for liftoff in the next few years, the digital signage industry itself also is poised to enjoy a long-term future of mostly sunny skies.

“The potential of digital signage as a powerful medium for information, advertising and entertainment is being recognized by a growing number of retailers, which will cause market revenue to nearly quadruple from 2004 to 2009,” said Sanju Khatri of iSuppli/Stanford Resources.

According to the report, the digital signage display market will reach $664 million by the end of 2004 and increase at a compound annual growth rate of 29 percent through 2009 topping off at $2.35 billion. The retail digital signage market totaled $501 million in 2003.

The report said that retailers, marketing managers and other executives responsible for getting their message through to shoppers inside stores are recognizing that digital signage displays are now a mainstay in overall advertising strategies. Khatri cited the ease, speed and cost-effectiveness of changing displays as compared to traditional signs, and pointed out that digital aspect of this medium will allow advertisers to tailor their messages to their shoppers on the fly. In addition, the report asserted that there would be more money to spend on digital signage displays due to falling prices and an improving economy.

“As a result of the economic downturn in the past few years, many U.S. and European retail outlets have cut back sharply on their expenditures on A/V products for advertising and promotional purposes. In 2004, this market is showing signs of a recovery,” said Khatri.

Several barriers must be overcome before the industry shows signs of success. First, there is still room for improvement in how content providers, software suppliers, and the network operators work together and gel with display suppliers and retailers. The report also insisted there was still room to grow in terms of the medium’s sophistication. Marketing executives and creative advertisers will start to take into account the content being displayed and how it fits into a retailer’s overall advertising strategy. Right now, designers are preoccupied with display aesthetics, according to Khatri.

And after advertisers, marketers and designers clear all of the conceptual and technical hurdles, good old-fashioned company politics will always be a final obstruction to bypass.

“It's not easy to manage this combination of functions so that the end result is a successful digital sign system that satisfies all the parties involved and, despite the greater flexibility and opportunities for additional advertising brought by digital signage, its significant price difference compared to conventional signs is often hard to justify,” said Khatri.

Still, none of these obstacles is expected to deter the industry from hitting its stride over the next several years.

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