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02.25.2004
Originally featured on BroadcastEngineering.com
Measuring the returns on digital signage investments

With sophisticated digital signage technology becoming more and more affordable, major retailers are expanding their role in their marketing efforts and investing large sums of money in large-scale digital signage networks. David Parish, CEO of Visual Circuits, a producer of back-end digital signage technologies that manage, store, distribute, schedule, and present digital media, says that justifying these investments to the executive board is now part of any digital signage marketing campaign plan.



Trial deployments are one way to test the ROI of digital signage, which may generate direct revenue through third-party advertising content. In this example of dynamic movie theater signage, created and powered by Inscriber's InfoCaster software, movie promos are combined with a beverage ad, a digital readout of the current time, and a dynamic listing of current movies playing in the cinema.

Measurement strategies depend largely on the primary goal of a particular marketing strategy. Goals can range from increasing brand awareness to selling additional units of a specific product.

“If I’m a BMW dealer who owns one or two dealerships in a local area, and I invest in a little digital signage system on the showroom floor of an auto convention, I’m looking to see if consumers viewing that display are drawn to my part of the showroom floor. If the increased attention helps me sell two extra cars that month, I can reasonably say the message value is pretty high,” Parish explains. “On the other hand, there are companies like Nike who utilize their in-store digital signage for the larger purposes of brand awareness rather than single-product marketing. They’re not really executing promotional strategies; they’ve determined that extending their sophisticated branding messages provides substantial value that leads to more overall purchases of all their product lines. They’re a great example of a company that has embraced the possibilities available with advanced digital signage.”

Of course, the issue of how to go about setting and measuring the goals of a digital signage marketing campaign can be very complex for large chain retail merchants. For them, it gets increasingly complicated to identify the appropriate measurements as the complexity of the strategy and the scale of the program increase.

“Large store merchants also care about increasing demand and getting some kind of incremental product lift. However, these businesses are often faced with different questions. They have to ask themselves, ‘To what degree is this a branding or promotional initiative? Or should we be using this to generate advertising revenue?’ They may even want to create campaigns that involve each of the stores, the distributor and manufacturer – a vendor-managed in-store signage. Then, you need to figure out how to quantify resulting increases in sales at each of those levels of production and distribution,” says Parish.

Digital signage vendor Sony Electronics is “using the trial approach” to help its business customers evaluate the potential return for a large-scale signage rollout, says Jonathan Holmes, marketing manager for digital signage in Sony’s Park Ridge, N.J., U.S. headquarters. “Of course, one reason [for a trial] is its lower initial expense. Clients can evaluate what kind of impact the system will have on their business and on their customers – and also can use this information to fine-tune what they put on the signage in terms of look-and-feel, frequency, and the nature of the information. So the trial concept seems to be very valuable from our customers’ point-of-view.”

As the digital signage technology evolves as a viable medium for effective creative marketing, measurement technologies are emerging to provide companies the means of assessing their campaigns. With television, radio, magazine and newspaper campaigns, it is difficult to accurately quantify in hard numbers how much a particular promotion contributed to the bottom line. Harder still is dissecting the degree each medium contributed to the bottom line. Digital signage technology vendors and marketers using the technology are beginning to get around this problem by exploring ways to connect promotions to analysis tools and data warehouses.

Visual Circuits is one of several companies taking a look at approaches that allow companies to continually test and analyze promotions in stores by literally running advertising over a couple of hours, analyzing it, then tuning the promotion and running it again in its new form.

“With the right infrastructure a marketing team can run a test promotion for a couple of hours [or] a couple of days. They can run the same promo with slight variations in the same region, or in multiple regions, because the incremental cost of deploying additional promotions is negligible,” said Parish.

Parish adds that he expects this technology to be the norm within a few years.

“At the very least, it will be standard in companies that want to thrive,” he says.

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