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![]() Dynamic Digital Signage - The New Age of Advertising
By Yvonne Li & Greg Gilbert, ADurance Inc.
Dynamic Digital Signage Advantages
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Large Retailers Adoption of Digital Signage
Third party advertisements are being displayed in targeted locations to increase revenue. As an example, McDonalds is placing their ads in Foot Locker’s in-store video network. Wal-Mart is upgrading its vast in-store television network at their 2,600 locations to promote products sold within their stores. According to Wal-Mart, their TV operation captures some 130 million viewers every four weeks, making it the fifth largest television network in the United States after NBC, CBS, ABC and Fox.
Advertisers are willing to pay $137,000 to $292,000 to show a single commercial for a four-week period, depending on the length of the ad and the number of stores where it is shown. This illustrates the positive effect on purchase decisions at the point of sale when the right message is delivered at the right location at the right time. The implementation of Digital Signage by large retailers has validated the benefits of this new technology. Furthermore, the rapid decline in costs for LCD, plasma and projector displays bring digital signage into mainstream business.
Independent Retailers Embark on Digital Signage
Subscription Service Lowers the Cost
There are many distinct advantages using the ASP model; it allows small to medium sized business to access sophisticated full-featured software, low initial cost, no software installation, no maintenance and software upgrades are being done for you. The system uses simple hardware and the application can be accessed from any PC on the Internet making ad-posting and content management for multiple stores feasible. System reliability is much higher when the platform is maintained by a professional service provider as in the ASP model.
Businesses subscribed to ASP use the software by paying a low monthly fee rather than spending thousands of dollars in building their own systems. Depending on usage, the fee would be as low as a hundred dollars a month. This also gives them the tax advantage when the entire subscription fee can be written off versus the typical extended depreciation term of purchased assets. In addition, they save on the cost of technology ownership and conserve resources for their core business.
Content Generation and Management
ASP allows customers to start using the software by signing up for an account through the web site, much like signing up for an email account. Once the account is created, customers can start posting their own messages within minutes from their own PC or any remote PC. A simple and intuitive interface is needed to let first time users grasp the concept and start using the software with minimal training.
Content creation generally requires someone who has knowledge in graphics design which can add to the cost for employing digital signage. This can be addressed by providing advanced applications for composing dynamic content automatically with the input of raw images and type-in text. The advanced application would also provide the ability to edit content easily and changes can be updated to various display locations in seconds. This is especially useful for store managers who have to monitor the selling rate of discounted items and vary the percentage discount accordingly. Dynamic content generation is also useful for emergency alerts, news broadcast and special announcements at the facilities. Most platforms accept graphics, movie and flash files in common formats. Users set the display schedules and locations ahead of time and tending the content becomes a simple task.
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Applicable Markets The path to establish the business is easier than most people think and the initial investment is low enough for small vendors to consider. By partnering up with digital signage software providers, local shops can offer a total solution to their customers with high system value. Additional services such as content management can also be provided to customers who want a hands free operation. Low software subscription fees along with declining hardware costs make the entry into this market attractive.
Market Opportunity Broadcasting ads through traditional media only capture a small percent of the audience that the ads are intended to target and miss the rest. Since media ad space is very limited, it makes ad placement expensive and benefits more directed to much commoditized or nationally branded products. The Return On Investment (ROI) hardly justifies placing ads in these channels. In addition, technologies such as TIVO allow viewers to skip over the ads entirely and channel surfing becomes a habit practiced by most viewers. This further declines the effectiveness of advertising using broadcasting methods. Advertisers are now turning to other avenues that bring them better results with lower spending. They realize that influencing purchase decisions at the point of sale is far more effective than any other places. Most retailers who implement digital signage at their stores are seeing positive results. Digital signage is a better tool for the job since it can display individual messages at selected locations. Advertisers can profile their audience ahead of time and put up the right message at the right place. The digital signage market will experience double-digit growth in the next few years and will become a major channel with size comparable to traditional media. With Wal-mart getting into the full swing of action in implementing digital signage, non-believers should take a second look at this potential market and prepare themselves to engage in this new business!
About ADurance Inc.
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