Digital Signage Taking Next Step - Page 2 of 3

Advertising Remains Key

Falling prices for displays and the continued erosion of broadcast TV advertising effectiveness are strengthening the growing popularity of digital signage networks, says Weaver. “We have witnessed a number of high-profile advertisers pull millions of dollars out of TV budgets and redirect them to alternative methods,” he says. “As the acceptance of out-of-home networks continues to increase and the number of deployed screens rise, Microspace sees this segment poised for explosive growth throughout the next three years.”
Recent digital signage deployments in Europe also point to increasing acceptance of digital signage worldwide. Barrie Woolston, commercial director for media and enterprise at U.K.-based Arqiva Ltd., notes recent additions in the United Kingdom, including the deployment in the London Underground by CBS Outdoor (formerly Viacom Outdoor) of a roadside product from Clear Channel as well as a digital airport project by JCDecaux.
Networks such as CBS Outdoor are built with the single purpose of delivering advertising, and Woolston urges the industry to take stock of digital signage developments and to grasp the complexity of advertising models. “Early implementations in (grocery stores) have proven that digital signage increases product sales, but that does not necessarily translate to an equivalent increase in the overall basket size,” says Woolston. “Furthermore, in-store marketing budgets are far more complex than initially suggested, and while networks can be proven to generate revenue, the money is not necessarily new spend.”
Digital signage solution providers also must contend with the simple fact that consumers are becoming much more demanding in terms of what it takes to capture their attention when it comes to video. “Digital media networks will need to meet or exceed consumer video quality,” says Douglas Medina, senior program director, North American division, at Germantown, Md.-based Hughes Network Systems. “High-definition TV in the consumer market has raised the bar on acceptable video quality.“
As system operators try to increase the appeal of digital media networks through the use of dynamic video content to provide frequently updated information such as news and weather reports, timing becomes a more sensitive issue, says Medina. “This exacerbates the bandwidth problems associated with digital media networks. Frequent distribution of high-quality content often exceeds a retailer’s existing terrestrial network capability,” he says.

Bandwidth Must Be Sufficient

According to Scott Calder, CEO of Salt Lake City-based Mainstream Data Inc., “New applications often tend to get caught up in — and slowed down — by intra-organizational turf wars. Smart companies in this space, which are looking at digital signage as a key revenue support and enhancement stream and as a key medium for reaching customers, will decide to build a dedicated, no compromise digital network,” he says. “The key is to concentrate and invest in more forward-looking areas where needs are emerging such as real-time Internet push networks, which are more powerful and sophisticated than traditional FTP, and use streaming technology to deliver information to multiple sites using the least possible bandwidth.”
Narrowcasting techniques can help meet the demand for more and better means of advertising in light of a “constructive fragmentation” of the advertising discipline and the never-ending search for new advertising revenue generation, says Calder.
“Depending on customer-specific requirements and constraints, VSAT technology can be implemented with an overall cost saving,” says Woolston. “The entrance of manufacturers such as Cisco into the digital signage space will undoubtedly add further weight to the argument for converged networks, however, this will be specific to markets such as retail and banking where other applications and networks currently exist.”
Today’s broadband VSATs offer sufficient bandwidth and can support broadcast of video and audio files for in-store TV as well as other applications for the retailer such as credit card transactions and Internet access, says Keary Cannon, vice president at Hughes Network Systems Europe, based in the United Kingdom and Griesheim, Germany. “It is really up to the customer as to how they want to distribute the digital signage content — standalone or over the in-store network,” he says. “Hughes, however, has seen a take-up in customers using multicast content delivery in addition to using the satellite network for business continuity.”
While some customers initially may ask about using the same communications system that carries their traffic for point of sale, inventory and other data, Microspace encourages customers not to add more traffic to this system, says Weaver. “The possibility of clogging their communications system during transactions is not something which we want to contribute. We tell the customer if he is happy with the existing system, keep it and we will provide an overlay system that will not interfere with their existing network,” he says. “Also, if one were to propose using the existing WAN or LAN, at some point there will be an [information technology] meeting. We have encountered many [information technology] managers stating, ‘You’re not putting video on my network.’”
Medina sees digital signage as another multimedia application that can be accommodated using the multicast capabilities of VSATs. “Even broadband terrestrial circuits are not well suited for large scale multimedia distribution,” he says. “Such customers often wrestle with expensive terrestrial upgrades,” he says. “Alternatively, those same customers may pursue a hybrid satellite overlay to reduce the bandwidth burden on the existing terrestrial network.”