WireSpring Blog

A new look at the costs of digital signage networks and content

Author: Bill Gerba on 2007-09-15 17:37:54

Ever since we posted our original article on budgeting for a digital signage deployment back in 2004, we've gotten calls from all sorts of companies asking why we picked price X or why we didn't include service or feature Y. After updating the digital signage budget in 2006, we took some flack from people who suggested that our estimate was too low, while others thought it was too high. Sigh... there's just no pleasing some people. But here we are again a year later, so I think it's prudent to update our estimates to account for some of the new developments in the industry. And for the first time ever, we'll even try to estimate the cost of content creation, which is probably the biggest question mark in the cost of any digital signage deployment.

What's the cost of a typical 100-screen digital signage installation?

First of all, I'm not going to redefine what digital signage hardware, software, installation, and maintenance mean, since most of the visitors to this blog are already familiar with these terms. If you'd like a refresher, our digital signage page has an introduction to the topic along with lots of pointers and links to other blog articles, as do the older budgeting articles linked above. Before we get into any business model specifics or try to estimate the cost of content, I thought I'd start by just re-pricing the items we covered in our 2006 budget:

Cost of a digital sign for 3 years
40" LCD screen	$1,500
Player hardware	$1,200
Display mount	$250
Player software	$500
Management software & tech support	$1,800
Installation	$1,200
Initial project management	$300
Total	$6,750

Based on these numbers, the cost of deploying a 100-unit digital signage network has dropped a very significant 18% since 2006, mostly due to dramatic price reductions in LCDs. Our $1,500 price point for a 40-inch LCD assumes that you'll eschew the largely-unnecessary 1080p resolution in favor of much less expensive 1360x768 screens, and purchase the three-year extended warranty for a few hundred bucks (it's a wise investment, and probably a necessary one if you're leasing your kit from a third party). While we still recommend professional displays for a lot of deployments, even consumer-grade screens have seen significant improvements, and a lot of customers opt to use them instead. We also adjusted the digital signage media player down $300, to $1,200. Computers keep getting faster, and more manufacturers are experimenting with low power and small form factor designs that can be readily adapted for out-of-home use, so we can reap some benefits from those trends. And finally, we dropped the price of installation by $200, not because ceiling-dropped installations have gotten cheaper, but because we're seeing a much wider range of mounting options on the market, and less expensive endcap, pole-mount, wall-mount and floor-standing displays are getting more popular as people test new business models and deploy to different kinds of venues.

The prices for service components like technical support and project planning have remained relatively static. Just like last year, we continue to find that larger companies still prefer to handle first-level technical support in-house if they already have a service desk in place. If your project needs outsourced first-level support, a three-year service contract for 24x7 support will probably set you back an additional $2,000 - $4,000 per screen, depending on the type of service being provided. I've left the project management cost unchanged at $300 per screen, although we now have more capable service organizations that can offer less expensive options. We've also found that a fair number of companies prefer to utilize their own in-house project management teams to handle the logistics of deployment and installation.

What about content?

As I've said before, content is the single largest unknown cost in a digital signage project, and I'm still astounded by the number of companies who never figure it into the cost of their deployment. Thinking that somebody else -- your venue, your advertisers, a local TV station, or whomever -- is going to provide you with usable content for your screens is dangerously naïve, and frequently budget-busting. At the same time, though, I could interview 1,000 agencies and network owners and write a bookshelf full of material on the topic -- and still not accurately estimate how much content is the right amount, where it's going to come from, or what it will cost to produce. Stuck between a rock and a hard place, here are a couple of trends that we've noticed over the past 18-24 months. Take them with a grain of salt, as they probably won't fit your situation exactly, but they might serve as a useful starting place when examining your own budget.

• Static content can be extremely effective, and it's some of the least expensive content to produce. Estimate a minimum of eight hours for each new screen, which will likely cost somewhere from $250 - $1,000. If your software supports it, consider using dynamic templates so you can make adjustments and even re-use the same creative collateral for several products/announcements/etc.
• Animation can be eye-catching and powerful, but it can also be distracting. For text-heavy segments, use animation sparingly to draw attention to key elements. A simple Flash animation will take a skilled designer anywhere from a day to a week or more, so budget a minimum of $2,500 for every piece that needs to be created from scratch. Again, use templated areas when possible to get extra use out of your animated assets, and consider purchasing a library of templates and animated effects to cut down on production times and costs. Even brand-centric animations can take advantage of this, since it can be less time consuming to take a template and customize it for a particular brand or message than it is to start from scratch.
• Talking heads are attractive, but they don't always work on digital signs. Humans put a lot of cognitive effort into processing facial expressions that might be wasted for a short advertisement or information clip. What's more, talking head videos more often than not rely on audio to deliver the real message, which is still taboo in some deployments. But if you're planning to use a spokesperson or talking head in your spots, count on a minimum of $250 per finished second of content when making your budget. The real number could easily be much higher depending on your production techniques and the actor or spokesperson that you hire, but $250/second is a good place to start.
• Full motion video can be spectacular, but expensive. Use it when appropriate for added visual appeal, but don't count on it to be more effective at selling a product in-store than a more elegant and simple animation would be. Good video designers will know when it's appropriate to use stock art and footage, but when it comes to shooting new video on-location, $1,000 per finished second is a low-end starting point for your budget.
• Video can have other shortcomings. One particular caveat with doing lots of flashy full motion video sequences is that they're frequently impossible to template and reuse -- because the individual shots are subject-matter specific. Thus, you might wind up producing a larger quantity of unique spots, further driving up the budget.
• Figure out the number of spots you'll need to produce/acquire before settling on a production technique. If you find you need to create 500 new spots a week, for example, the template-based route might suddenly seem much more appealing. If your advertisers or your host venue plan to participate in the network, give them the option to foot the cost for more expensive production techniques when appropriate.
• Don't be afraid to mix-and-match. While it's becoming increasingly important for the content on digital signage networks to complement the environment they're located in, you don't need completely homogeneous spots on your screens. In fact, by making all of your clips blend in with each other, you may be reducing the chance that any one of them will stand out enough to engage your viewers. A flashy and eye-catching full motion spot followed by a couple of short animations or still screens can be visually arresting without breaking the bank.

Final thoughts

As our last few articles on the subject have covered in depth, there are other costs that need to be considered, like network connectivity, space rental and leasing fees. I don't feel it's worthwhile to cover them in any additional detail, since they haven't changed much over the past few years. Just make sure you don't forget them when working out your budget numbers. Also, as I've noted in each version of this article, the above numbers are simply an estimate. They don't reflect WireSpring's prices or any other vendor's prices, as far as I know. Instead, they're based on a composite that we've assembled in the course of working with customers and talking to other firms that use competing solutions, or those who have created their own solutions. Your mileage will vary with the size of your network and the products and services that you select. But as we've seen over the past few years, the cost of deploying digital signage continues to decrease, making it less risky for companies to give it a try. Spurred on by global demand, we're rapidly approaching a point where the tangible costs of deploying the hardware and software will take a back seat to other challenges -- such as filling the screens with content and making them effective -- when organizations look at what it takes to run a profitable digital signage network.

Comments (15)

Subscribe to comments for this article | Trackback

Leave a Comment

Digg this! | Del.icio.us


Previous Article: CBS makes a land grab, buys SignStorey for $71.5M
Next Article: Digital signage tips from an unlikely source: Reality TV

Front page of dynamic digital signage and interactive kiosks journal