Frost & Sullivan: Digital signage ad revenue hits $102.5 million in 2004

Mass media's declining impact is driving digital signage growth, but new content and measurement standards are needed to raise the medium's profile among media planners
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By delivering relevant messages using compelling content and reducing perceived wait time at checkout counters, digital signage promises to enhance customer experience in the booming retail industry, according to Frost & Sullivan. The analyst group’s recent report, “North American Digital Signage Markets,” reveals that digital signage advertising revenue totaled $102.5 million in 2004.

However, growing pains come with digital signage’s success. However, growing pains come with digital signage’s success, says the report’s author, Vineeta Kommineni. In much the way that online advertising initially baffled media planners, she explains, “the digital signage industry has a glut of ad specifications based on factors such as display size, aspect ratio, and presence of sound.”

As the medium continues to grow, its future hinges on the emergence of a new discipline for creating content. There is a need to correlate display location and content with analysis of environmental factors – store traffic flow, time spent in the store, time spent in each zone of the store and customer linger points.

Moreover, as a marketing by glance medium that emphasizes promotion over brand, digital signage requires brief messages with minimal audio to be non-disruptive. This means sales promotion agencies may be more adept at developing signage content than ad agencies. Traditional agencies are cautious in evaluating digital signage’s place in the media mix. A lack of standards for measurement, auditing, and buying signage means that media buyers perceive digital signage to be more complicated than their accustomed routine of TV, radio or magazine purchases.

In the interim, an industry association such as the Interactive Advertising Bureau in the context of digital signage may set the stage for developing standards and guidelines. Media companies such as Clear Channel, Viacom, ABC Networks and Liberty Media are also legitimizing digital signage.

For more information, visit www.frost.com.

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