Digital Signage: A Growing Integration Option

The Motor City Casino in Detroit is building a new facility, and digital signage is an integral part.

Monitors can inform patrons of anything from two-for-one lunch specials to the $1,500 jackpot that just hit on slot machine 8 in row 12. And a value-added reseller (VAR) is putting the system together with stock components.

That VAR is Immersion Graphics Inc., located in aptly named Commerce, Mich. The company was in the high-end visual display market when a year and a half ago it started investigating digital signage.

"Our typical customer … will pay for value add," says president Pat Hernandez. "What we primarily focused on were the areas of digital signage that we wanted to pursue to maintain our levels of margin."

Planar Systems' CoolSign software with an existing slot machine interface added content control to Immersion Graphics' audio and video expertise.

A Wide-Open Field

Digital signage is everywhere: airports, subways, banks, gas stations, schools, and hotels.

Such systems used to be the province of specialized providers, but new software, partnerships and falling hardware prices make it accessible to all.

Virtually any business can benefit -- and integrators and VARs can profit from services fetching 25 percent to 40 percent margins.

Consumers have become inured to static displays, but eye-catching movement and integration of entertainment and information translate into solid benefits. When waiting in a space with digital displays, for example, people perceive that their wait time is reduced, notes Dan Smith, Samsung's director of pro A/V marketing and sales.

Retailers often find that digital signage brings a hard boost in sales, says Mary Meeker, president of MEM Systems, a systems integrator in Bonsall, Calif.

But what really stokes retailers' interest in digital displays is IT content management. Using static signage is expensive and inefficient, says James Condon, senior vice president of video media services at PlayNetwork Inc., an integrated media services company in Redmond, Wash.

Many companies are terrible about rolling out traditional in-store signage with the right materials in the right place at the right time.

"In retail, the average is 70 percent [store] compliance" with main office directions, Condon says.

That means companies waste almost a third of the money they spend. That puts IT experts into the sweet spot.

"The market has gotten really heated up in the last six months or so," says Dave Sallander, president of Sherlock Systems Inc., a Buffalo Grove, Ill., VAR involved with digital signage since 2002.

A recent project for a downtown Chicago condo development involved 16 screens, in various rooms, showing current inventory and marketing messages.

Software from 3M and video equipment from ATEN Technology enable Sherlock to individually customize the screen contents.

A Wealth of Possibilities

Businesses are just starting to get digital signage power. For example, a restaurant that has a jukebox touchscreen control at every table and directories at office complexes that also provide afternoon traffic updates.

Businesses even sell advertising space as an additional revenue source.

"Think of walking into a car dealer," says Jon Young, North American sales vice president of Israel-based in-store media firm YCD Multimedia Ltd.

"Digital ambiance is a way to use media to complete an in-store customer experience. Programming can be appropriate for the target lifestyle, type of driving experience, what have you."

As clients discover innovative uses for digital signage, VARs and integrators explore new twists on business models. Some want to provide the signage at no charge -- to shopping malls, for example -- and make their money selling third-party advertising that runs on the displays and is targeted to shoppers.

There are firms doing this successfully, but it's harder than it sounds. Meeker tried it four or five years ago and found the going tough.

"The advertisers wanted proof of installation and proof of people watching [the ads]," she says. "The people at the malls or stores said the opposite -- you show us the advertisers and we'll let you put it in."

Digital signage offers new potential for VARs, but it also presents new problems. Assumptions can tank an implementation.

For example, newcomers often make the mistake of using consumer displays and computers to control price, but the equipment quickly falls apart under the long hours and hard use of commercial implementation.

It's a tricky business.

"There are a lot of pieces of the puzzle: content delivery, content management, content creation, financing, installation," says Pierre Richer, executive vice president of sales and marketing for Tokyo-based NEC Display Solutions.

"You can't be an expert at all that. You have to outsource a lot of this."

Content is a knotty issue. Sometimes an entire business model will depend on the signage.

The SushiSamba restaurant in Tel Aviv uses almost 20 flat panels mounted above the bar, facing out toward the street. It draws people in, keeps them interested as they wait for a table.

But it's difficult not only to create video and audio, but to manage it. As an example, Young points out that a typical radio station has only 1,200 songs at any one time.

What makes the playlist sound fresh is switching out titles, changing the playing order. Likewise with digital signage; a company needs incremental new material and knowledge of how to use that material effectively.

Content Is Key

Leaving content to clients is often a bad idea, as is not spending enough time in early planning and understanding their needs. Meeker remembers installing 40 screens as a pilot project for one of the biggest names in retail.

"They thought they knew everything," she says. "But because nobody gave it enough thought before they started down this road, no one wanted to take responsibility for this project."

Although the company was awash in video and print material, it didn't provide content for the network and management ultimately pulled the plug.

"The industry is growing very rapidly, but, at the same time, it's not mature," says Terry Scannell, founder of ipSigns, a VAR in Portland, Ore.

"It's very advantageous for VARs to hook up with good partners in the area."

All the big vendors build networks of complementary providers so they can act as matchmakers, using the service as a way of gaining VAR loyalty and continuing sales of their products.

There are also content networks that provide services that scale for companies of all sizes, though channel partners still need to vet each one individually, because their businesses could depend on it.

It's a lot of work, but by learning the ropes and carefully approaching the market, you can have your own display -- of increased profits.

Erik Sherman is a freelance writer, book author, and playwright, who most often focuses on business and technology subjects.