The Digital Signage Insider

After more than my fair share of trips to Las Vegas in 2004, I started to think about the role of digital signage systems for outdoor advertisers.  On "the strip" every major hotel has some sort of animated LED or LCD screen showing full motion video, scrolling text messages, and basically anything else that might get the attention of passers-by.  And while it all seems to make sense in the land of sensory overload that is Las Vegas, I started to wonder when we would start to see more outdoor electronic billboards show up in the rest of the United States.  While I do know of at least one roadside LED sign in the Ft. Lauderdale area (this one owned by signage firm Colite International), outside of Las Vegas and maybe New York's Times Square, there just don't seem to be a lot of these screens around.

[UPDATE]: Scroll down to try our new LED billboard cost estimator, which will generate a PDF of all the major cost components (LED modules, structure, installation, etc.) and operating expenses (electricity, connectivity, etc.) based on your project requirements. While costs have fallen dramatically since this article was first written, so have comparative CPM rates, so while a positive ROI is still very much attainable in many cases, it's not necessarily the home run that the nearly 10-year-old CPM rates below would make it out to be.

[UPDATE #2]: As of December 2013, LED billboards have become more or less ubiquitous, and the US Department of Transportation has released details from an extensive study demonstrating that electronic billboards do not distract drivers (any more than anything else they might be doing, anyway). The study shows that, “On average, the drivers in this study devoted between 73% and 85% of their visual attention to the road ahead for both [electronic billboards] and standard billboards." The amount of time spent looking at each type of billboard was basically identical as well (an average of 379 milliseconds for electronic billboards versus 335 milliseconds for conventional ones), and thus well below the, “currently accepted threshold of 2,000 milliseconds.”

The report, provided by the Federal Highway Administration, can be found here.

I'm sure that at least part of it is the high up-front cost of the screens, which can easily pass a quarter of a million dollars.  However, I was surprised to learn that about a quarter of US states have laws that prohibit roadside electronic billboards (at least the kinds that allow moving images).  After doing a bit of research, I came across this report from the Federal Highway Administration, which discusses some of the safety aspects and studies that have been done on different types of billboards throughout the years.  While the studies that focused specifically on digital billboards showing moving images were not totally conclusive, the FHWA does make some interesting notes about how the distractiveness of electronic billboards changes with driver age and familiarity with the driven route.  Overall, it's worth taking a look at, if only for these notes and their ideas about future research on the subject.

On the other end of the spectrum, outdoor advertising firm BPS Outdoor has done some research of their own on the overall effectiveness of roadside digital signage.  First, the bad news:

"Sign Code Issues
24% of states in the United States prohibit moving or animated signs.  29% of the U.S. have timing limits on electronic billboards.  Most of the United States prohibits flashing red lights and anything that causes a glare or vision impairment.

Rates
Electronic billboards cost more than standard billboards.  The average CPM (cost per thousand) for a regular billboard is $2.05 and $37.42 for an LED billboard.

Billboards with LED's are rented by minutes and each ad is shown for 8 seconds.  Some ads can cost as much as $50,000.00 for 2520 minutes (1.75 days) and as little as $1,200.00 for 648 minutes (.45 days.) impairment."(http://bpsoutdoor.com/articles/leds.htm)

However, there is some good news, especially when considering that the aforementioned cost issues will decrease as new (and less expensive) display technologies become available:

"Studies have shown that LED's are six times more effective than traditional billboards.  Electronic billboards may be so effective because they are animated unlike anything else outdoors.

Another reason they are so effective is that people don't get tired of these ads since they change every few seconds.  We tend to pay attention to things that are different and that we haven't seen before.

Research has shown that 94% of people passing mobile billboards can recall them while only 43% can recall non-moving billboards.  Overall, sales increased 107% for products shown on mobile billboards and 54% on static signs." (ibid.)

Similar results were reported in a recent Harris poll about electronic signage by Silicon View.  As always, take all vendor-supplied statistics with a grain of salt.  However, given the successes that digital signage systems have been having indoors, it's not hard to imagine that they would be equally successful outdoors as well, provided that things like brightness, contrast, and presentation of the message to people moving at 60 MPH were worked out.

I think it's reasonable to expect that over the next decade we're going to see more and more of these electronic road signs pop up -- first along the most heavily trafficked highways and near major urban centers, and then gradually spreading out to less populous areas from there.  I'm not sure if that's a good thing or not, but as soon as it becomes a viable and affordable means of advertising, you can be sure that it's going to happen.  Don't say I didn't warn you :)