Dave Haynes, the DailyDOOH crew, and others have given a good deal of attention to the 2013 ISA International Sign Expo that was held in Las Vegas last week. As the world's largest show about signage, I'm actually a little surprised that there hasn't been more talk about it in our industry in the past. However, since the people who exhibit at that show have traditionally sold things like vinyl wraps or very large, expensive inkjet printers, most of us haven't spent much time focusing on it. This year, that seemed to change a bit, though to be honest, I'm not quite sure why.

Selling digital signage to traditional sign guys is harder than it looks

On the surface, the idea of a digital signage vendor exhibiting at the Sign Expo makes perfect sense. After all, you'd be in a huge pavilion full of throngs of people already well-versed in selling signage. They'd be ripe prospects for converting to digital, right? Right?

Well... not so fast.

There are a few reasons why the static signage guys haven't jumped into the digital signage industry with gusto, and a few reasons why they're not particularly likely to do so in the near future. Here are the big three:

Image credit: rharrison on Flickr
Problem #1: Technology

This is perhaps the easiest challenge to see and understand. Traditional sign guys have real skills, whether they're painting pinstripes, brushing vinyl, or dangling from a cherry picker while hanging a new storefront sign. What many of them still lack, though, is a comfort level with technology. Consequently, a lot of us in the digital signage space have tried over the years to come up with solutions to make the tech side of our business more accessible, whether that means writing braindead-simple software, bundling in easy content creation capabilities, or offering integrated bundles that negate the need to buy screens, media players, etc. separately.

Still, for many, it's a problem. But it's not the problem...

Problem #2: Content

By now you've probably figured out how I feel about digital signage content. It's the single most important element of any network, bar none. So traditional signage guys, who for decades have focused on nothing but the execution of great signage content, should be able to easily transfer their expertise to the digital world, right?

Maybe, but maybe not. While plenty can use Photoshop or Illustrator to make great artwork, few have experience with motion graphics, and fewer still understand the nuances of making effective content for digital screens. Since most of these guys have been involved in selling signage content (since what are most static signs other than just a display of their content?), they're not going to be willing to outsource this element to production companies. And since many actually make money on content sales now, it's not like they'd want to. Which leads us to problem #3...

Problem #3: Money

Our industry's full of creative business people. So it's fair to presume that we can fix problems numbers one and two. Number three, however, is a tougher nut to crack. And the reason stems from my comments on content above. A traditional signage shop that specializes in, say, laminated four-color signs understands a cost structure that is dramatically different from what we in the digital industry know. These folks have to make a big, big capex to get their business started, by purchasing a four-color press or large-format inkjet printer. Once that's done, the cost of producing additional signs is quite low. Ink, paper, substrates and coatings make up only a small fraction of the cost of the finished sign, making each individual sign an extremely high margin item for the shop.

Indeed, in our experience, most small sign shop owners were unhappy with anything less than 65% or 70% gross margins on their sales. And what's more, to many this percentage was actually more important than the actual dollar amount. This makes selling a digital signage package tough, since the packages have to be very cheap to begin with in order to make the final sale price reasonable. Coupled with ongoing training (which many franchise companies require for franchisees), technical support and the like, that doesn't leave much for the hardware and software vendors putting the packages together. Software or content subscription services can alleviate this, but they can be a tough sell to a group not accustomed to service-oriented products. Finally, considering that digital signs are still pretty expensive on a per-square-foot basis compared to most kinds of static signage, many traditional sign shops are only going to encounter a limited number of deals where they make sense.

So when you combine a low volume proposition with limited desire to sell (due to lower-than-usual gross margins), a different content business model and the additional complexity of a digital system, you can see that penetrating the static signage industry is not quite as straightforward as it first seems.

All that said, I expect that some portion of static signage vendors will become successful digital signage salespeople. After all, they still have access to the one resource that matters: customers who need signs. But if I had to guess, it's still going to be several more years before even the largest franchise organizations have any kind of meaningful deal flow when it comes to signage of the digital variety.


+1 # Dave Haynes 2013-04-11 18:33
Good to see you posting again. I agree most of the printing industry people will have a tough time making sense of and cracking digital signage - particularly those with lofty ambitions but little experience. However, we have seen a very noticeable shift from print billboard faces to digital boards, and are starting to see that at the outdoor and indoor "street furniture" level. That's happening mostly with static images, not motion graphics. When the numbers start to fully make sense (and I would argue that's close), clients will want to run six wall poster faces instead of one (or whatever) and turn around changes digitally. The best evidence of this direction is in QSR, where print menus are going digital because the numbers work and digital allows flexibility and speed. So yes, hardly an easy transition. But I think it is inevitable for an element of the printing industry.
0 # nick trendov 2013-04-11 19:01
Physical and digital signs are opposite sides of the dame coin, imo. We built a 'wayfinding app' for www.ibc.org in 2012 and then figured out it worked better when linked to signs, old school paper and ink! We connected both via SMS, the learned we could use SMS instead of the app, so we dumped it and can use signs in any language to promote products at events via mobile. This discovery depends on printed signs as they are physical, gets people into kiosks with screens and then into digital spaces. Signs matter when you have to connect physical places to digitalk spaces, that means almost anywhere! Cheers! Nick PS For those who care short or long codes in signs start off the process. We will have a global short code in June but until then pretent you texted a code and received one of these links. The first link comes back via txt when you txt a booth or stand id#. http://tinyurl.com/msadv-edx and this url offers access to Exhibitor spaces when is selected in the Event space http://tinyurl.com/msadv-xdx
0 # Bill Gerba 2013-04-11 19:38
Dave: your example of digital menu boards is reasonable, but also exceptional. There's an artificially boosted demand for digital features, driven by new label laws. Combined with the fact that most menus are about the size of LCD screens in the "sweet spot" for pricing, this gives them a cost advantage that isn't present in most other applications. And where the transition does happen, it's largely being done not by the traditional sign guys, but by us digital guys directly. So while I do agree that over time some (and indeed, perhaps many) static signage applications will be supplanted by digital, I still don't see how the traditional signage industry will be able to drive many of those deals. I think most is going to come from digital signage companies working directly with the end-customers, much as they do today.
-1 # Stephen Ghigliotty 2013-04-12 13:02
Another great post...and I can completely understand why you wouldn't go. I do think that one of the transitional issues will be the use of static content, which mitigates the expensive and confusing (to some) issue of original motion graphics. Even though most digital signage gear focuses on using full motion, static content can be very compelling if done right. And by right I mean with a clear call to action, legible from a distance, etc. One of the ways the traditional signage folks will cross over is by leveraging the less expensive static content, but they still should keep an eye on the prize...which would be full screen original motion graphics.
0 # Raffi Vartian 2013-04-12 13:55
Bill, Great insight and spot-on. After working a booth for 3 days at the show I can tell you for certain that your points are correct. The only thing I would add is to move #3 to the #1 spot. In fact you could argue that it's the only one on the list. I did the numbers for a guy that's looking at doing a large roll out and he said to me "Those numbers are terrible. I'm better off keep selling him vinyl." And his application was perfect for DS (data-driven). If I had to throw out a number, I'd say 80% of the attendees hated that digital was there, 20% was excited. Those 80% are not only unlikely to get on the digital bandwagon, but they are actively selling against us.
0 # Bill Gerba 2013-04-12 14:21
Stephen: I agree about the "static" nature of some digital signage content. In fact, when I do content seminars, I tell people "thing posters, not TV" because preparing a sequence of still "keyframes" and adding motion to them (or between them) turns out to be more effective -- and probably cheaper -- than starting from a motion perspective. In fact, I still use a clip of the HH Natura product line that you sent to me from Artisan as a great example of how to storyboard digital signage sequences. Raffi: Great story, and I kind of agree with you about point #3 (money) being the only important one. I only added in #1 and #2 because they're the "problems" that we as an industry have been trying to address, probably because #3 is either too hard or just plain impossible. Next time, leave a couple of booth babes at the expo and stay home :)
0 # James Matthews-Paul 2013-04-12 14:23
Bill, you raise some great points in this article. I see fantastic opportunities for sign-makers and display producers to sell digital signage " as you observe, they have the channel but not the skills. The key, for me, is selling in the right technology for the right application. Signage practitioners would be more willing, IMHO, to sell digital signage if there were more out-of-the-box options, and if they were educated in how to convert print content to good digital signage content. I also think that the high visibility of DOOH campaigns sometimes detracts from the capabilities of digital signage. Some of my readers see those huge jobs and try to equate with the needs of their local estate agent chain, hospital or school that they service with signage. They also don't understand the role of content networks and are confused by whether or not they should be creating video content. QSR, as Dave points out, is one of the more popular applications because it can be manipulated according to a static template populated by 'easy' data, such as an Excel spreadsheet, and has a very visible ROI.
+2 # Stephen Ghigliotty 2013-04-12 15:39
For those who might be interested the digital signage creative produced at Artisan is still archived on youTube. You can see the ad that Bill mentioned and more here: https://www.youtube.com/user/artisanlive/
0 # Adrian Cotterill 2013-04-12 18:19
As you say Bill, we (DailyDOOH) covered the event - for the first time as it happens and out of our own pocket. I had been impressed with the research that the ISA had done in our industry (even sending representatives to our Investor Conference in NYC last October). They also took the time and spent money with us to advertise this event in a number of our publications. I have to say that all of this (yes, spending money with us) is a breath of fresh air for a 'new' exhibition. As you also noted a number of prominent industry consultants and influencers were also present and their digital signage park was not a bad size. I think they may struggle keeping up the impetus as they move in 2014 to the much less popular Orlando BUT hats off to them for getting on the DS / DOOH radar as much as they did this time around. They need to lose Brawn / Bunn who do them no favours but this event could have legs if they manage the next 12 months correctly (much more so than InfoComm which for the 2nd year in a row we will be giving a miss)
+2 # Clinton Gallagher @virtualCableTV 2013-04-12 23:30
For several years I've approached these guys from every angle both the indoor vinyl and outdoor guys. In general I would have liked to work with them as collaborating colleagues but I don't think I am alone discovering they are for the most part as dumbed down as a box of rocks. Hence, what I presume we will see is a trend to replace the FASTSIGN type of businesses as the vinyl and print services will be picked up by "digital" guys who can pick up a product line that only requires 5th grade education without breaking a sweat. Its the price we'll have to pay but it will be well worth it in the long run as this type of relevant line extension will bring new meaning and trustworthy reliability to the phrase "full service." See you at the next buggy whip convention fellas!
0 # Rich Gottwald 2013-04-17 12:59
Bill, Thanks for the thoughtful comments on ISA's entree into the digital signage market. I do not dispute the three problems you laid out - however, I would suggest that that the three problems - technology, content and money - are challenges for all entering the digital signage space - not just the traditional static signage sector. Our goal is to educate static sign companies on this technology and to offer a path to market for digital signage product manufacturers. Our feedback from this years event is that we are filling a need. I hope we can convince you to come next year, Bill (our staff members now have adopted a goal to get you there!) to see first hand the amazing products and event that draws nearly 20,000 communication professionals each year. Rich Gottwald Executive Vice President ISA
0 # Bill Gerba 2013-04-17 17:20
Hi Rich, Thanks for taking the time to join our conversation. I hope you understand I by no means want to belittle or otherwise dismiss the importance of your organization or the role that static/traditional signage still plays today. That said, while I agree with much of your comment, I'm not in full agreement with your statement, "\\that the three problems - technology, content and money - are challenges for all entering the digital signage space - not just the traditional static signage sector\\." The majority of people entering the digital signage space today have either an IT/tech background or a content creation background, which automatically makes #1 and/or #2 an opportunity and not a problem from their perspective. And with regard to item #3 (which another commenter pointed out might be the only real problem), the issue isn't so much with pricing as it is with perception. If a traditional signage businessperson is accustomed to getting 65 or 70% gross margins, and has been doing so for the past decade or more, it's extremely difficult to entice them with digital offerings that might offer a similar marginal dollar amount, but a significantly lower marginal percentage. This is not hypothetical business-speak on my part -- I've had "exclusive" arrangements with a couple of the big, national signage franchisors over the past 7 or 8 years, and this has been a very real problem. And as we haven't encountered it to the same extent in any of the other markets or outlets that we've pursued, I would say that it is largely unique to the static signage market. For that reason, it seems unlikely that your base is going to become exceptionally engaged in digital anytime in the near future. It will take a major economic or conceptual change before they do, if you ask me.
+2 # Zac 2013-06-22 02:02
New to digital signage...found this a very concise breakdown. Thanks for the heads up on the culture at these expo's, should save me some money :)

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