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01.15.2004
Originally featured on BroadcastEngineering.com
The opportunity to fundamentally change how marketers sell

Founded in 1991, Minneapolis-based Visual Circuits has been a pioneer in developing hardware, software and networking products for the emerging digital signage industry. John DeWitt, contributing editor for Digital Signage Update, spoke this week with Dave Parish, the company’s CEO, to get his take on the digital signage market.



Example of an airport’s digital signage with dynamic informational and advertising content.

Digital Signage Update: Organizations market and communicate via many media – radio, TV, newspapers, retail displays, and so on. What’s new and different about digital signage?

David Parish: To the extent that your marketing message is relevant, it has a much higher chance of being noticed – and acted upon. That’s what digital signage brings. Because I can generate digital content relatively easily and inexpensively – once the [digital signage] network is in place – I can make sure the message is as relevant as it can possibly be. The example you always hear is, “When it’s raining outside, sell them an umbrella.” With typical signage in stores, such as end caps and point-of-purchase displays, they’re fixed and often irrelevant. With digital signage, I have huge opportunities to change the message and make it immediately relevant.

DSU: Though the cost of digital signage technology has fallen significantly, a large signage network is still costly. How do your customers justify the investment?

Parish: There are a wide variety of ways to think about the value proposition around digital signage. One way to think about it is the message value itself. If I’m a BMW dealer, and I determine that the investment in a little digital signage system on my showroom floor helps me sell two cars extra a month, that’s probably sufficient. [However], the owner of a [large-scale] digital signage network really needs to go into it with a strategy – to what degree is it branding, or promotional, or will it generate advertising revenue? Or maybe it’s relationship-based – like a grocery store doing cooperative promotions – and that begins to change the relationship between the store and the distributor or manufacturer. In any case, determining return on investment starts with asking, “What are my business goals?”

DSU: How mature is today’s digital signage industry?

Parish: I regard it very much as in its infancy. I say that for a couple of reasons. While there are a handful of relatively large digital signage networks, such as in Wal-Mart or Best Buy, there you’re really looking at companies that are very much innovators. You’re not looking at the mainstream retail space yet. Beyond that, even in the organizations that have deployed it, it’s not fully integrated.

DSU: With the proliferation of digital signage, what should organizations think about as they implement large-scale signage networks?

Parish: As digital media becomes more pervasive throughout an enterprise, the requirement is for more and more sophisticated content management. Content is coming in from a wide variety of locations – multiple agencies providing content, product makers providing their promotional content, and internally generated content. It needs to get stored and managed in a consistent way [or] it becomes unmanageable.

DSU: Where is digital signage going? What’s the long-range opportunity?

Parish: One of the bigger picture opportunities represented by digital signage is to integrate digital signage networks with the data warehouses and analysis tools that retailers have been developing. Marketers always have the challenge of connecting the dots – I ran the TV ads, I printed the circulars, and now I’ve got to figure out whether that promotion paid for itself. Digital signage tied to back into data analysis creates a closed system [to] continually test and analyze your promotions in stores. You literally can run advertising over a couple of hours, analyze it, then tune the promotion and run it again – because the incremental cost of deploying additional promotions is negligible. It has the opportunity to fundamentally change how marketers sell. Five years from now, that will be mainstream retailing.

Contributing Editor John DeWitt is a Cape Cod, Mass.-based business consultant and writer.

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