The WAVE Report
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0628.1 Power Signs 2006
0628.1 Power Signs 2006
By John Latta
San Diego, CA
9/25 – 26/06
Power Signs is a small but effective conference produced and managed
by Intertech Pira. The WAVE has attended prior Intertech events in OLED
and found them excellent. The event is focused on prepared presentations,
panels and a small exhibit area. The quality of the presenters and attendees
Digital Signs Market Dynamics
Between the panel discussion, several speakers and the introductory
remarks the outline of the nascent digital signs market unfolded. Summarized
below are some of the key points.
The three top venues for
digital signs are: outdoor, retail and public space. The vast majority
digital display technology, LCD and Plasma, are in indoor
spaces. An example was cited of an outdoor display using a projector
but overall the outdoor environment is too harsh and there is a lack
of enclosures to protect the displays from direct sunlight.
When speaking of digital
displays, the relevant term is a network of displays, many dispersed
widely across geography. In fact, from an advertising perspective the
larger the coverage, such as the largest 100 cities in the US,
the more likely ad space can be sold. In this model, the ad
space is more like that of radio or television. In the ad context, this is
called “place-based” advertising.
Just as an advertising client would have a radio or television advertising
plan it is implied that they should also have an “outdoor” or a “place
Digital signage fits between
traditional broadcasting and IT. The ways in which it is used today
is as both a broadcast medium with many of the characteristics
of an IT infrastructure.
Although it is much too
early to speak of digital signage saturation it was cited that Times
Square had 240 digital signs in 4 square blocks.
Terms such as “dynamic play lists” were
used and the potential migration to interactive displays which
respond to an individual were suggested. Considerable emphasis
is being placed on the quality of content to avoid boredom
and content rejection. But it was cited that in today’s
market many consumers find the advertising on signs useful.
So much so, that digital signage content decreases the apparent
wait time in lines – the line appears to be shorter
while watching a sign.
There is much discussion
on the effectiveness of these networks. The three relevant
terms used are: Visibility, Recall and Engagement. Visibility is also
awareness and represents if consumers notice the signage. Engagement
is the consumer response to the sign and Recall is about
memory of the display content and in advertising speak – the
brand awareness lift. But the effectiveness of the medium
can only be fully assessed if it influences buying behavior.
Here the statements at Power Signs were much less confident.
For example, it was asked - Where is the best place to
put signage in a supermarket? If one wants to influence
buying it should be next to the product where the buying
decision is to be made. When it comes to check out, the case
was made that these items near check out, have the highest
gross margins in the store. If a display at this location
only diverted attention from this sales process, the signs
could actually decrease sales.
The Frost and Sullivan market
study on the digital signage market showed the typical hockey stick
market estimate. The advertising market in 2006 was estimated to be $750m
using about 15,000 signs. By comparison the radio advertising market is $4B.
In 2010 they estimate the digital signage market will exceed $2.5B with
55,000 displays in place.
In a typical network installation
the cost of the displays is approximately 40% to 60% of the unique
location spend. When asked how elastic the market is based on the
cost of the displays, the expectation is that the display
component will continue to decline. That is, digital signage,
if it uses LCD or Plasma panels, will benefit from the continuing declines
in the prices of these components. Thus, the current digital signage
market is not seen as particularly price elastic.
When it came to the types
of displays used it was stated that if the content is computer generated,
that LCD panels work best, and if the content is video based, the
Plasma panels have this market. Yet, in all cases the discussion
is about digital signs which have some type of dynamic
The expectation that these
networks have a life span of 2 – 3 years and
in some cases as long as 5+ years. An interesting perspective is that
it is best to decommission a network when it can still be sold used
and useful. Many states how have electronics disposal laws and the
cost of discarding the electronics can be substantial. Thus,
it is far more cost effective to sell it and avoid these
On the content side, it
was suggested that there could be a synergy between digital signage
content and web content. That is, if one sees content on a sign it these
is value to be able to return home to the web and finish the content
or the buying experience.
When asked about the potential
for non-advertising forms of digital signage, such a corporate networks,
this was characterized as a “trace” market. Yet,
the conference discussion is that there can be many useful functions
for these systems such as off-store hours training.
Cisco – Media Drives Router Usage
Cisco Manager, Janice Lee Litvinoff, introduced the Cisco digital media
systems, which were announced on that day. The themes of the strategy
The network is the platform
This platform supports anywhere, anytime communications;
The platform allows access and use of media with ease
It is their view that Digital Signage is a “network of centrally
managed digital displays.” Media includes video, images, animation,
context, text and tickers. It can be applied to the following vertical
markets: retail, banking, healthcare, transportation, education, sports
The value of the Cisco approach is that it is integrated, simple, flexible
and thus strategic to the organizations that use it.
In response to a question it was stated that Cisco will have an announcement
in support of the digital signs market by Q1 2007. The presentation was
very enterprise focused. But Cisco stated that they are in more markets
and they would also support the disparate digital signs market.
Outdoor Signs – They are not the same as indoor
Bob Klausmeier, Yesco Electronics, gave a presentation on outdoor signage.
This is also being impacted by technology. Points included.
Most outdoor digital signs
use LEDs. In spite of the fact that many of the outdoor digital signs
can show video there are many laws which prohibit video. The general
assumption that one should not show video outdoors.
Most outdoors signs are
seen by drivers and the intent is to get them to stop and come in the store.
The massive 40’ wide
billboards are going digital. The typical payback is 11 months for
signs that can cost up to $1m. One of the major advantages of these signs
is day-parting. This is the segmentation of the sign content
by time of day. This allows for sales to more advertising agencies and to make
the ads more targeted to the audience interest. A typical large sign
will have 6 – 8
advertiser messages in a loop and these loops can change by time
of day. These large signs have been very successful with
long periods of advance sales – as stated they are “fully booked.”
Described as the “Ultimate Digital Media
Scenario” is one where there would be a large digital billboard
which draws attention to drivers and then a digital pylon sign
near a shopping center which then led to signs in the center.
The messaging would be consistent for this scenario to
Top 9 Secrets of Digital Signage
Gregory Shandel, Scala, provided an overview of some of the major issues
in digital signage.
A typical transaction based
network cannot cope with the demands of video.
There are few tools to create
playlists for digital signs.
at the conference disputed this. The response was that Flash and web
technologies are quite adequate for content creation. One
of the arguments against PC based content is that Flash
is compute intensive and this implies a computer which
generates heat and prone to failure.
Most Digital Signage implementations
are composite video with no ability for HD or local content.
is more like broadcasting that the network of digital signs Cisco
Passive and interactive
modes are typically supported independently implying two infrastructures.
in another way there is an analog feed to the display and IP network
for control and interactivity.
ROI is complex and could
well cross many organizational lines in a company.
Objectives of the digital
sign network should be geared towards driving revenue in stores.
MPEG, Flash and AVI files
cannot be dynamic without some type of layering technology.
Many display technologies
can support digital signs, not just PDP.
Just because one can gain “free” access
to a location for digital signs the actual cost will not necessarily
An interesting tidbit – in the new Heathrow Terminal 5 they are
planning on using 82” LCD screens throughout.
Display Technology Applied to Digital Signs
Chris Connery, VP Research, DisplaySearch provide an overview of how
digital displays support the digital sign market. Key figures presented
The public display market
is estimated to be:
2007 – 1.3m
2009 – 2.8m units
2010 – 3.2m units
The revenues from the shipment
of displays is estimated at:
2009 - $3.3B
2010 - $3.4B
The market has share by
Q2 06 – 20%
LCD; 80% PDP
Q1 08 – 53% LCD,
LCD and PDP, in the 40”/42” space
are price converging.
Q3 06 – LCD
$2,273; PDP $1,624
Q1 09 – LCD $1,544,,
There is a black cloud that no one wanted to talk
about – advertising
saturation. Already there is commercial avoidance with TiVO boxes and
even the Quiet Car of the Heathrow Express allows individuals in a public
venue to escape advertising. Thus, as the industry grows careful attention
needs to be paid on the level of turn off by consumers.
There is one common theme from the advertising context – these
displays seek to take more money from the consumer pocket book or purse.
Indoor displays are in product areas, thus, there is the desire to turn
presence into higher spending.
It was interesting to hear the response of some individuals who work
near these display products. If there is audio, which can become distraction,
the retail employees will go to great lengths to turn it off even to
the point of destruction.
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