Friday, August 27, 2004

Digital Signage Return On Investment

Digital Signage ROI - in general - is not an easy mathematical equation. This is due to the cross vertical nature of Digital Signage applications and the intangibles that are hard to measure and often misunderstood. Digital Signage is typically sold into various applications such as:

  1. large venues (e.g. sports arena's, entertainment hubs)
  2. retail stores
  3. government/corporate campuses
  4. transportation hubs (e.g. subways, airports)
A great article in Signs of the Times magazine (subscription only) by Steven Keith Platt discusses the ROI for digital signage in Retail. ROI can be determined using R/I where R is the "return" and I is the net "investment".

Webpavement's interest in the article is the fact that digital signage - no matter the vertical or application - has intangibles that must be accounted for when selling or considering digital signage. Digital Signage ROI analysis must consider how intangibles impact consumer buying behavior and perceptions.

Traditional advertising intangibles are mature and accepted by advertisers.
Proof of this theory can be depicted using a toothbrush coupon example. A customer clips a toothbrush coupon from the newspaper and goes to the store to purchase the toothbrush. Hopefully the customer also purchases toothpaste, toilet paper, allergy medicince etc. The return on advertising the toothbrush coupon is very hard to measure because of these cross sell intangibles. However, advertisers understand the intangibles because newspaper advertising has been around for a long time.

Digital Signage Intangibles include Customer Experience, Hi-Tech Feel, Branding and Sales Transactions.
Digital Signage has many intangibles that many of you readers can probably cite for numerous applications. Whether it's product / company branding or customer experience - Webpavement believes that digital signage will eventually catch up with traditional advertising programs.

The digital signage industry (VAR's, End User Organizations, Integrators etc.) must become more effective in communicating and understanding the intangibles received from implementing digital signage systems. Get in touch with one of our representatives to discuss the intangibles of your business initiatives.


jcwang said...

A simple calculator shows immediately realizable ROI in replacing traditional posters with digital signage:

Link: The Digital Signage ROI Calculator said...

I think it's safe to say you will get a return on your digital signage investment. Very popular and every expanding business.