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Seven Hurdles to Success of Digital Signage Advertising

By Nurlan Urazbaev,
Editor-in-Chief, Digital Signage Pulse

Tuesday, October 9, 2012

Seven Hurdles to Success:
What Will It Take for Digital Signage To Break Into the Mainstream Media?

In the past few years the digital signage/DOOH industry has achieved several critical milestones and overcome many of the barriers on its way to becoming part of mainstream media.

Some initial guidelines and best practices have been introduced by trade organizations. Newcomers can now easily find educational materials and events. Trade publications are becoming more mature. Trade events proliferate.

Hundreds of digital signage networks are in operation, many with regional and national reach. New networks emerge every day. Most advertisers and media buyers are now aware of digital signage and include it in their media plans.

Technology is more affordable and versatile, and it is abundant enough to accommodate almost any business model.

The industry now attracts several billion dollars in revenue every year and grows at an impressive rate compared to most other media.

There is no doubt in my mind that digital signage/DOOH will eventually become an indispensable segment of the advertising spend: a media budget line item in its own right.

But we’re not there yet. And how soon we get there depends on when the remaining obstacles to growth can be cleared.

Here are seven major stumbling blocks to be turned into stepping stones:

1. Selecting software: a quiet nightmare.

Digital signage software” is one of the most popular online search terms, because network operators have come to realize that software is the key component of network management.

Several hundred software providers bombard networks with largely similar proposals. In the end, the shortlist boils down to 2-3 leading software companies and by the time the winner is chosen 10-18 months have gone by. Thus the RFP process is exceedingly long, expensive and it delays deployment. In some cases, networks decide to build the software in-house or choose “free software,” which complicates matters even further.

Another piece of the software puzzle is that even the biggest providers, combined, do not represent a significant market share. The market is highly fragmented. While this may seem good for promoting competition, the differences in workflows, reporting formats, lack of standard media currencies, and the sheer number of platforms add complexity to the already cumbersome media buying process.

It is a well-known fact that even though traditional media are in decline and are not really accountable for ROI by modern standards, buyers tend to favor legacy CPM-based media, because it’s easier to buy and therefore easier to get a commission from. To win the buyers over, digital signage advertising has to comply with much higher standards than those of traditional media.

There is nonetheless light at the end of the tunnel. Digital signage has the natural potential of becoming as measurable, accountable and as easy to buy as pay-per-click (PPC) advertising – arguably the most effective medium today.

PPC ads can be tracked from impressions to click-throughs to the actual product purchase (where e-commerce is enabled). So can digital signage advertising. And it will, as soon as the software market is consolidated and campaign targeting and reporting data are standardized.

Research for this article was done using Digital Signage Pulse – the only multi-source, fully searchable, consolidated  archive of all digital signage, DOOH and DPbM news and resources.

Published on Tuesday, October 9, 2012 at 1:12 AM

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