By Brian McClimans
Vice President, Global Business Development, Peerless-AV

Digital signage is growing in tandem with technological advancements and changes in communication styles and processes. With these changes brings the need to rethink the urgency of validating digital signage expansion simply based upon Return on Investment (ROI).

The communication landscape has vastly transformed and digital signage is a part of this. Take Millennials versus baby boomers — their preferred styles and forms of communication differ greatly. While baby boomers may wish to ask for directions and work face-to-face, Millennials like to gather information quickly via technology.

We’ve seen changes in signage in the past due to technological advances. Upon the advent of color photography and films, people quickly expected, preferred and gave more attention to signage in vibrant colors, leaving black and white signage in the dust. The same holds true today in regards to static versus digital signage. People want to see what they know and expect. In this day and age, the expectation is that information shared via digital signage is fresh and up to date, whereas static signs may insinuate out of date information, particularly to Millennials.

Traditionally with static posters, signs, etc., it used to take marketing departments a great deal of time to come up with ads. The only way to test out the ad would be by moving forward with the design and displaying the ad for anywhere from 30 days to a year, without the ability to make changes. If the marketing department got it wrong, more time was involved to recreate the ad, resulting in more money being spent. Now, the times have changed. When done digitally, if the message does not communicate what you need it to, you can now make changes by tweaking the content live or relatively live. It’s a better form of communication and it’s an easier form to change. It is also more engaging and stimulating. Still, with these changes necessitates alterations in measurement. We’re no longer just running ads on digital signage.

Culturally, we place significance in keeping up with the times. Still, there will always be individuals hesitant to readily accept change, particularly when new technology may seem costly. And, these are the folks you will need to validate expenditures with as it relates to ROI and Return on Objective (ROO). Fundamentally, to determine ROI and ROO, your team collectively must define the function of your digital signage because if you cannot define this, you’ll never truly determine your ROI and ROO. This must be defined and everyone in your ecosystem must be invested equally.

While ROI considers your return on investment, the amount spent versus hard dollars returned over time, ROO considers your return on objective. In most cases you may consider both of these equally. However, for digital signage, often ROO needs greater attention, as our true objective and function is communication. Which eventually brings us to: how are we going to measure ROO?

In digital signage, your function is communication. Moreover, to define your ROO, you must consider: what will my content communicate, to who will it communicate and where? Your target audience may be customers or employees and your goals could vary vastly from wayfinding to retail calls to action. It is determining these goals that will help define your ROO.

If your content’s function is wayfinding, does your information booth garner less lost visitors? If your content promotes sales, are more customers entering your store aware of these sales? Additionally, both a trend in content and an aid in measurement is social media. Does your signage contain a QR code or NFC and Bluetooth capabilities to track and connect to customers in real time? A hashtag? Does it contain an in-store call to action or a promotional code only featured on your digital signs? These are indeed ways to add some numerical values to more objective levels of engagement.

The future does look bright for measurement surrounding engagement, with the beginnings of anonymous video analytics (AVA) alluding to the possibility of digital signs in the future readily incorporating technology that can measure gender, demographics and engagement levels.

Furthermore, many benefits in expanding digital signage versus static signage exist in ease of use and reductions in operational costs. In addition to removing the costs of physically printing and replacing signs, large buildings, which incorporate multiple displays, offer the ability to network multiple displays together to easily repeat messages in multiple places, allowing university- or company-wide news and emergency alerts to quickly and easily be dispersed.

Still, in the current day, ROI of course needn’t be disregarded. However, rather than the more traditional focus on what retail call to action the signage may have caused, it is more important to consider ROI in terms of operations.

Fundamentally, while upfront costs of digital signage may seem high, it is of the utmost importance not to cut corners. For example, integrators could be tempted to use consumer TVs as they are less expensive. However, should these integrators take these TVs outdoors, they have negated their warranty. Moreover, what should be determined is the length of time these displays will be active and the cost of maintenance and service. Oftentimes, a reduction in cost at the time of purchase will amount to more in the long run due to additional service costs. For outdoor spaces, features like safety glass will improve longevity while other features such as optic bonding will actually reduce operational costs in the long run due to the lack of need for fans and filters or air conditioned, protective enclosures.

At the end of the day, when considering expansion in digital signage as it relates to ROO, the end user must consider what their signage will communicate, where it will be located, and why. And, is it truly engaging? As relative to ROI, it’s important to consider not only the upfront cost, but too the costs of content development, software, maintenance and service. No matter which way you look at it, the times have changed and are constantly changing, and digital signage is a part of this. Your ultimate function is communication. What’s the best way to communicate your message? It should certainly be in the most engaging way possible.

Brian McClimans has spoken at Digital Signage Expo and will be a panel participant at the full-day DSE ONE New York Event on October 21st during Digital Signage Week. For more information or to register for DSE ONE visit: http://www.digitalsignageexpo.net/dse-one

Brian McClimans serves as vice president of global business development at Peerless-AV. In his current role, McClimans is responsible for establishing new markets, developing new products and managing strategic relationships for Peerless-AV throughout North America, South America, EMEA and Mexico.