Digital Signage for Small Business

Digital signs — flat panel TV screens showing advertising and informational content — are all around us: on the highway, in the supermarket, at your doctor’s office. They’ve become part of the everyday landscape.

According to industry advocates such as Lyle Bunn, a digital signage consultant and educator with Bunn Co., and the Digital Signage Association, this is for a very good reason. Digital signs deliver measurable, proven business benefits.

Some small businesses have recognized and exploited these benefits, but many more have not. Research from companies such as Arbitron, Bunn said, shows that installing a digital sign at a service counter — in a car dealership or dentist’s office, for example — can increase inquiries about a service anywhere from five to 15 percent.

Other research shows that in retail settings, digital signs typically boost sales revenue by five to 50 percent — and sometimes by as much as 300 percent. “The sign becomes a silent salesman,” Bunn said.

Digital signs make particularly good sense as a mechanism for upselling. “Small businesses are already in the position where they have customers coming into their facilities,” Bunn said. “Digital signage works especially well in generating new business — and new referrals — from that existing customer base.”

More Digital Sign Marketing Strategies

The technology can do more than just boost sales through advertising. Banks and supermarkets, for example, use them to distract customers who have to wait for service.

According to Bunn, research done using stop watches and follow-up interviews shows that digital signs can reduce customers’ perception of wait times by as much as 40 percent, presumably increasing their satisfaction.

Some companies have also used digital signage simply to add a fresh look and energy to their retail outlets — often as a lower-cost alternative to a complete facilities renovation.

“Victoria’s Secret, for example, has about five different generations of store design. When the oldest generation needed some face lifting, they looked instead at putting in digital signage,” Bunn said. “It saved them a lot of money and had a similar modernizing effect. It introduced a level of energy and vitality at a much lower cost than undertaking major leasehold improvements.”

Many companies, more often larger companies, also use digital signs to inform and motivate employees.

“In the case of inward messaging, it’s harder to calculate a [return on investment],” conceded Steve Acquista, director of digital signage at Black Box, which makes the Icompel digital signage appliance. “If you put a white board outside your office to keep employees informed, can you tell me how effective it is?”

Ah, but there’s the rub. You can pick up a white board from Staples for a relatively few bucks. Digital signage can be expensive — although it doesn’t have to be.

Digital Signage Business Model Options

According to Bunn, there are basically two business models for digital signage. In one, you invest capital and human resources to acquire the technology, create the content and manage it.

In the other, you invite a digital signage network provider to place networked signs on your company’s premises. They could be networked over the Internet or over a 3G cellular network. Signage network providers make their money selling advertising that will show on the signs in your facility.

There are several network providers that focus on specific industries. C3ms targets medical and dental reception areas, AutoNetTV serves auto dealerships, and PRN delivers digital signage networking to retailers.

Each business model has its pros and cons, and very different cost structures. Deciding which one makes most sense depends largely on how much control you want over what the sign shows, and how much you’re willing to pay for that control, Bunn said.

Digital signage networks all work differently, but generally, the provider pays for the display and all other hardware and software. The provider then offers site owners advertising space in the presentation, alongside third-party advertising and informational content.

“If the play loop is ten minutes, the location owner might get a minute or two for their exclusive use and they might get a percentage of the third-party advertising.”

This sounds attractive for capital-strapped small businesses that lack expertise in content creation and IT management. Some of the informational content that network providers supply might even help promote your business. On the other hand, some of the advertising might compete.

Breaking Down the Costs

Black Box’s Steve Acquista, whose company has a vested interest in promoting the on-premise, do-it-yourself model, said that few if any digital signage network providers will be interested in very small businesses because they can’t deliver a large enough audience for their advertising.

If you go the do-it-yourself route, you’ll have to buy at least one flat panel, which according to Bunn will cost between $1,600 — for a screen the size and shape of a digital picture frame — and $6,000 for a large TV-size flat panel.

Acquista said prices for flat panels have come down by as much as 40 percent in the last few years, which is one reason more small businesses are now considering digital signage. But these prices are clearly much higher than you would pay at Best Buy for a comparable consumer product.

Bunn and others strongly recommend commercial-grade products because they stand up better to the rigors of constant use. “If you install a consumer-grade picture frame and let it run 12 hours a day, it’ll burn out pretty quickly,” he said.

Maybe, but we wonder if small businesses might be better off experimenting with the concept and learning about it using a $300 consumer product — with the understanding that it might not last forever, and they will eventually upgrade to a commercial product if they see good results.

Digital Signage Media Players

Digital signage “appliances” such as Black Box’s product, also called media players, can represent another significant outlay. Icompel prices range from about $1,600 to $3,500.

Icompel works as a server, sitting on your local network, feeding content to one or many signs. It includes hard drive storage and pre-loaded, browser-based software for creating presentations and managing and scheduling them. According to Acquista, it’s very easy to install and learn.

There are also all-in-one alternatives — flat panels with built-in media players that can either connect to a network to source content. Or they come equipped with onboard storage or USB slots that take flash drives or cards loaded with content.

All-in-one products are a fairly recent phenomenon that helps make digital signage more accessible and affordable for small businesses, Bunn said.

Digital Display & Communications, for example, has a line of all-in-one signage products under the brand, The Simple Picture. They range in screen size from 15 to 42 inches and play content stored on flash memory cards. Samsung has panels with built-in MagicInfo media players priced as low as $1,400 for a 40-inch LCD model.

If you like the idea of digital signs delivering advertising revenue, it is possible to combine this concept with a do-it-yourself approach. You can try selling ads yourself to suppliers and customers, or join Vukunet.

Vukunet, which Bunn called an advertising “exchange,” delivers paid advertising over the Internet to privately owned digital signs. “Vukunet is a fairly important and relatively new development in digital signage,” he said. The company has been operating the service since November.

Digital signs can make a lot of sense for, and deliver real and measurable benefits to, small businesses in retail or other customer-facing environment. But you do need to consider the cost and resources required to create and manage content.

Gerry Blackwell is a freelance technology writer based in London, Canada. Read his blog, AfterByte