Do digital signs really earn more money than traditional ones?
I'll use a project I'm working on right now with 85 stores as an example. Our initial estimate is that it will cost them around $200K for the necessary hardware and software for an 85 store installation, which comes out to $2,352 per store (not including installation and ongoing production costs). If we assume the installation will run nicely for five years -- a fair, even conservative, estimate -- that comes out to merely $39.20 per store per month. Even assuming that the customer makes this initial investment through a financial (leasing) company and incurs some fees there, it seems like a pretty reasonable figure. By comparison, considering the costs of designing and printing ads, shipping them to each location and being sure they are displayed, you'll see that the monthly cost of the traditional method isn't too far away from the cost of buying the equipment for the digital signage network.
Image credit: Gaetan Lee
What's the secret to getting the most value from digital signs?
If you've made it this far into today's article, you're surely wondering "How can this guy prove I'll make more on the net with digital ads instead of print?" Well, I can't tell you that for sure, but speaking from experience (in a past life I managed the entire Walmart TV network in Mexico), what I can tell you is that the right content mix will absolutely make more sales. And I'm not talking about flashy, expensive, high production value content either. You can use simple tools on your own PC to create the right kind of ads as long as you know the right messages to transmit to your customers.
For starters, in the digital world the "one size fits all" concept is simply wrong. When you have a digital network, you simply don't do a country-wide promotion like you might in a catalog (where all of the "best" items typically have the best placement because you know for sure they will sell well). What we found to be productive was to run specific local promotions with our first-tier items, mixed in with promotions for some of our lesser-selling items (which tended to have a lot of excess inventory). Even better was when we would change our promotions on specific days, weeks or months based on past data about the kinds of shoppers who would be in our stores at the time. For example, the people buying a high-end beauty product around the holidays may have been doing so for a gift, whereas those that bought the same product mid-year were more likely buying it for themselves.
Another benefit of digital signage is the speed it brings to your internal workflow and distribution. When you only have traditional signage to promote your products, the workflow of that system is really slow. In your best scenario, your September catalog has to be at the printers by July to allow enough time to print and deliver it. This means your promotions for September have to be designed and defined somewhere around May. Where is the "opportunity" there? With a digital network you can build your promotions for September even one week or one day before the month starts. Imagine you have a beautiful raincoat in your September catalog, but this year turns out to be particularly warm and dry. Your printed catalog's advertisement is worthless. With digital ads, on the other hand, you can continue to promote summer clothing until the first drop of rain appears (whenever that happens). Just like the guys in New York City that pop up out of nowhere with umbrellas when it starts to rain, digital signage has the ability to be on time with the right message when needed -- and advertisers are willing to pay some premium for that advantage.
Image credit: Kevin Coles
In the end, digital signage is all about the opportunity to let your customers see what they need to see at a specific place and at a precise moment. Like the digital menu boards that show you breakfast in the morning, lunch in the afternoon and dinner at night, digital signs add value by letting you use your most valuable space as efficiently as possible, with less "waste." But there's another advantage that frequently gets overlooked. Because digital signs are often put in the best possible store locations, store owners and networks owners can be reluctant to let certain ads run. When you see traditional signage in a store, 90% of the space is used to advertise products that store owners already know will sell well (even if they don't advertise them). Because it's inexpensive to update content on a well-designed digital signage network, you have the ability to go beyond these "safe" advertisements and try to push items that have great potential, but don't yet deserve the prime poster space. While we continue to find value in selling ad space to A-list advertisers, there's even more to be found in atypical uses. Digital sign networks have turned out to be amazingly useful for moving the products that were sitting in the warehouse, great for temporary promotions, and truly excellent for promoting new arrivals -- all of which were either too expensive or too difficult to accomplish with static posters.
How have you explained the value of digital signage to your customers? Has the process gotten easier over time, or are people becoming more skeptical due to the hype that accompanies many projects?
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