There are economic sectors where explosive growth and new paradigms have been predicted. Many of those predictions have not been fulfilled (at least not in the expected timeframe) and this had bad consequences for those companies that exposed themselves too soon.
Do you remember the first electric cars like the FIAT Panda Elettra back in 1990? Or the Apple Newton, the iPad ancestor, back in 1993?
The Digital Signage industry is one of those El Dorados, where everyone is waiting for the massive shift of “Out of Home Advertising” towards Digital Signage. Experts love the analogy with musical support: from vinyl to CD and to MP3. Therefore the logical consequence is: from paper poster to Digital Signage.
However, very little of what has been forecast has become true. Many DooH operators are still waiting for Godot.
When will Digital Signage overtake the traditional signs industry?
The renevable energy industry teaches us an important lesson: no matter how innovative and clean an energy source is, the market will always be oriented towards the cheapest and easiest-to-exploit source. In order to overtake definitively a traditional source of energy, the renewable one must reach the same price or become more convenient than the conventional source.
This inflection point is called “grid parity”. By analogy, in the Digital out of Home field (DooH), we can introduce the concept of “poster parity“: Digital Signage will overtake traditional (paper) signage only when the total cost of the former will become similar or lower than the latter.
This equation should be corrected (in favour of Digital Signage) by a very important factor, because otherwise we compare two non homogeneous quantities. A kW of energy obtained through a solar panel has the same power as a kW obtained through coal, it is 1 kW. How to compare Digital Signage with paper? A Digital Signage solution does much more than simple paper posters: it can offer dynamic and varied content, keeping the viewer engagement level very high. For example:
- It can offer targeted content in real time based on the audience (men, women, age range);
- It can display content based on external events (weather) or geographic position;
- It can analyze the audience and gather very precious data, if equipped with specific sensors.
Marketing Campaign’s ROI
In a nutshell, a correct analysis should consider all of the factors that influence the ROI. Such a complete comparison would certainly favour Digital Signage. Notwithstanding, it is still difficult to overtake the traditional signs market, because the budget allocated to specific marketing channels is not elastic and cannot be changed easily.
“I would like, but I can’t …“
This is the answer that many Digital Signage operators often receive at the end of a negotiation.
Which factors can help to reach the “poster parity”? The most important cost factors in a Digital Signage solution are:
- Installation (cabling, network, case, etc);
- CMS for content management and broadcasting;
- Server infrastructure (this factor can be disregarded if a cloud based solution is used);
- The player, including installation and maintenance costs.
For the first four factors, there has been a continuous trend in price reduction and quality improvement. As regards bullet 5, the new Promised Land are players based on the ARM architecture (Android, Raspberry, SMIL, etc). This architecture offers high efficiency and reduced costs towards a solution based on a PC.
The Future of Digital Signage
The market is waiting for a big contribution to reach the poster parity, because hardware costs can be reduced up to 80%, without giving up performances. Installation and maintenance costs can also be minimized.
Yet there is something more: in addition to cost reduction (thanks to small device dimensions and the high flexibility of this architecture), it is possible to easily create customized solutions.
Therefore there are great expectations from all market operators, both on the integrators and on the marketing side. Those one who have been waiting on the edge, should now embrace Digital Signage with no hesitations.
A word caution is needed here: until now the market has seen only promising announcements. In practice, PC-based Digital Signage solutions still have the absolute dominion on the market. No alternative solution has been able to notch it.
Can the ARM architecture maintain the promise of an affordable high quality Digital Signage?
What are the elements to consider in order to have a well designed Digital Signage solution that works on Android, SMIL, Raspberry, etc?
Are we really close to reach the “poster parity”?