One of the most common questions we field from people new to ScreenScape and digital signage in general is simply this: how can I use it to boost revenue?
Digital signage is a powerful, multi-faceted communications tool and it can be used for a whole range of applications that aren’t directly related to boosting sales or selling advertising.
That said, the common sense nature of digital signage as a sales tool is indeed what separates it from other less targeted forms of marketing. The physical presence of a digital sign on location acting as a silent salesman in a retail store, or in every retail store across the country, means that your marketing efforts are, by definition, going be well aligned with your real world sales activity. Your customers are making important buying decisions in retail stores, right this moment, where your products or services are already on sale. Obviously this is an important moment, one where you’d like to be in a position to own some mindshare inside the venue, to engage your customer and position your brand.
And so, without further ado, to help, in part, to answer the basic question, how can I use digital signage to make money, we offer our top five ways to boost revenue with ScreenScape. We hope this list inspires you to come up with your own!
5. “Flip the funnel” and turn loyal customers into raving fans
The customers that are making buying decisions in your store at this moment represent more than a singular revenue opportunity. To the extent that they like your product, they might also become your vocal advocates. The question is, if they like your product, do they know how to share a positive review with their friends? Do they have any incentive to promote your brand? Are they aware of the big event you have planned for next week? This is where digital signage comes in. A key reminder while on location in your store might be all they need to tell a friend, or even make a post on social media.
4. The timely, hyper-relevant promotion
If you owned a grocery store and you had some produce, maybe a head of lettuce, or some tomatoes, that were getting a little old and coming up to their best-before-dates, what do you do? Naturally, you post a sign that announces a sale on those items. Even if you sell them at a deep discount, at least you’ve got something them….after all in a couple of days you’d likely have to dispose of them entirely. This is an example of a timely promotion…..one of many different kinds you can use to optimize sales at retail. Where does digital signage come in? Well that sign that announces that your produce is on sale can be even more powerful if it’s a rich digital promotion. If it’s done well a digital ad can be more engaging, more professional, and better for the environment.
3. Educate, educate, educate
We know that the retail environment is becoming more experiential. Increasingly, the goals of running an effective retail establishment extend beyond simply selling stuff. Today’s savvy retailers try to create a purchase destination that offers a range of value added services, or experiences that make for a more satisfactory feeling before, during and after the transaction. This is where an informative and educational digital sign comes in. A printed flyer or a well placed printed sign advertising mosquito repellent is ok…but it pales in comparison to a two minute video showing how mosquitos spread the Zika virus.
Now, If you were the manager of a pharmacy offering travel health services, which medium would you say is more effective? In educating the public on the risks to pregnant women while traveling in Central and South America? In selling mosquito repellant? The digital sign wins hands down as a selling tool, and oh, by the way, it’s more hygienic and less wasteful than that printed flyer.
One of the easier ways to boost sales using digital signage is to focus on increasing and expanding basket size. For instance, you may visit a car dealership with the simple intent of getting your car’s oil changed. If a digital sign reminds you that you should rotate your tires every 10,000 miles, or that it’s time to start thinking of putting on your winter tires, there’s a better chance you’re leaving that store having acquired more services and having spent more money than you had planned for originally.
The upsell is stock-in-trade of the retail industry. You know all those convenience items they like to place up by the checkout? They’re there to try to convince you to buy on impulse, just one more thing before you go. Well digital signs do that too and they do it very well, not just at the check-out counter….but everywhere you place them in the store. If you’re buying a stainless steel frying pan, don’t forget the stainless steel cleaner, if you’re buying new skates, don’t forget the fancy laces, if you’re buying some new electronics equipment did you know you can also buy the extended warranty? I think you get the picture.
As retailing becomes more technology-enriched and more globally accessible through Internet technologies, a whole new marketing landscape is starting to emerge. Progressive retailers who understand their role in the value chain stand to gain through this process.
Digital signage networks have gatekeepers, played by the party that is paying the bills, that owns title to the underlying technology platform that governs the flow of information across the network. The power of any given digital sigange network to influence purchase behaviour can be used as a currency by those who control it using the golden rule: (s)he who owns the network, makes the rules. This means the gatekeeper of a digital signage network is also in a position to monetize their screens by requiring some form of consideration from their partners in exchange for the privilege of gaining access to the audiences inside their store.
If it is your goal to maximize the revenue potential of participating in a digital signage network it pays to understand the supply and demand dynamics involved between and among the various kinds of participants. Firstly, it usually does pay to grow your network. The more screens you control the bigger the potential audience and this is what most marketers understand. Size and scale matters. Secondly, as more participants vie for a limited supply of advertising placement opportunities on hand, you will eventually see increases in the utilization and value of any network. Growing your roster of 3rd-party advertisers, convincing an advertiser to buy incrementally more placements, and to deepen their investment in the network by using it to promote an ever broader set of product categories, will naturally lead to higher network utilization rates. This will generate more ad dollars per venue and, as more of the available ad space is consumed, in turn it will lead to a scarcity of supply. If you have more demand for your limited supply of ad placement opportunities then you can satisfy, you may eventually be able to increase the price of those ad spots while maintaining full utilization. This is a straightforward supply and demand equation. The game is to build out your network, drive up demand for your ad spots, so much so that your ad partners will compete with one another and, over the long run, bid up the price of each new ad spot. In summary, increasing demand among 3rd-party advertisers leads to higher network utilization, and higher prices both of which translate directly to boost revenue.
Where the business opportunities inherent in building out an Internet of Screens are finite and scale up in a more or less linear fashion in proportion with the size of the physical network, the business opportunities involved in utilizing the network, governing the flow of advertising and content services, are virtually limitless. You only have to look at the evolution of the World Wide Web, by comparison, to see that even while the pace of growth of the physical network might eventually slow down, the pace of innovation within that network and the growth opportunities in content and communication services will continue to grow exponentially long after we’ll have said the Internet of Screens has arrived.
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If reading a long blog entry is NOT your thing….here’s a succinct video that says it all.
As no-BS digital signage blogger Dave Haynes pointed out again recently, there are a lot of bad statistics out there that proclaim to describe the size and scope of the digital signage market.
“I don’t know how many meetings and conference presentations I’ve been at that sees one or more presenters, early on in their sessions, pop up a slide that shows a chart that climbs up and a big, honking number at the end – signifying the market size for digital signage. It’s almost always a number followed by 000,000,000, attributed to some obscure research firm. Somebody will then ask me if I buy into that number, and I suggest it probably reflects the same level of science and accuracy as a rousing game of Pin The Tail On The Donkey … after a few vodka and red bull shots.” – Dave Haynes
Well put Dave! A lot of the statistics we’ve seen out there seem meaningless to us as well. That said, we get asked the question a lot. How big is the digital signage market? Here’s one simple way to approach that question. Although it too is not perfect we feel as though it builds up towards an answer, or an analysis, that is more satisfactory than pie-in-the-sky forecasts.
Digital Signage is about Place, so let’s use Places to Guide us
Digital signage, at its roots, is inextricably linked to, and can be grounded in, real world business networks. A more practical way to look at the market opportunity is by looking first at the retail bricks and mortar landscape itself – the businesses which one day might use digital signage technology.
Every business on the planet that has a physical venue, or that has a retail partner with a venue, can be seen as part of the total addressable market for digital signage solutions. The key questions that get us closer to the total value of that market are as follows:
How many venues are there in any given market that might, in theory, one day use digital signage?
What is a reasonable estimate of the average revenue per year that one of these venues can generate for its preferred digital signage vendor?
The Digital Signage Market in Canada and the United States
Let’s put this model to work using the Canadian and US markets. Government census data is relatively easy to find and can be used to help answer the first question. Click on the graph (and wait) for a sense of where this data comes from.
The US census of 2012 counted 1,062,083 retail establishments1 in the United States. In 2011, using Statistics Canada data, the Retail Council of Canada counted 190,1002 retail stores in Canada.
Total number of retail stores
Next we need an estimate for the average revenue one of these average venues might represent to their preferred supplier. For the sake of argument we’ll use $40 USD, ScreenScape’s monthly subscriber fee.
Avg revenue per customer per month (USD)
Revenue opportunity, Retail, North America (monthly)
Additional Place-based media Venues
In addition to retail venues there are many public places that make for ideal locations for digital signage. These range from hospitals to health clinics, universities to fitness centres, and hotels to golf courses. The US census of 2011 counted 6,588,336 public establishments in total. For the sake of simplicity we can say, as a rule of thumb, that for every retail store there are five non-retail establishments.
Number of venues, total (6x retail)
Avg revenue per customer per month (USD)
Revenue opp, All Venues, North America (monthly)
Using our subscriber fee as a stand in for the average revenue opportunity associated with each average customer, that comes to $3.6B USD annually. Is this a bulletproof number? No. Is there plenty to quibble with here? Yes. Naturally, it’s hard to imagine the presence of digital signage in every single public-facing venue, certainly not for some time. On the other hand, there are and will be plenty of venues that, rather than having one screen, will actually have several dozen.
Furthermore, the average revenue per customer that any given vendor might generate through one customer relationship naturally depends on a host of factors. $40 per month might seem rather low when you consider some of the more sophisticated requirements of a high-end digital signage project. It really depends on the nature of any given vendor’s product line, whether they are a full service provider or prefer to focus on one part of the total solution. It also depends on pricing, on the nature of a vendor’s particular target market, and so on.
There is no perfect model that accounts for every angle and every instance. That’s why they call it a model. However, we humbly submit that this sketch, grounded in real world venues, does well to help us visualize the total market for digital signage solutions, over time – at least as well as any forecast we’ve seen to date.
The best method for estimating the market opportunity for digital signage is likely this method PLUS a thorough analysis, triangulation, and normalization of all similar, credible approaches. It’s looking at various approaches together that helps us to circle the problem and arrive at the best conclusions. How do the different approaches compare? What do the results say? Do they offer up a market value range that is consistent with the others? If it’s possible to accurately measure the size of the market, the value range that is common to a variety of approaches is likely your best bet.
From Digital Signage Systems Towards an Internet of Screens
We should stress that the broader, longer term market opportunity of place-based media & marketing, is actually much bigger than we’ve suggested here. The first phase of the market opportunity is in building out the infrastructure, the plumbing if you like, of digital signage systems. This is the market that us vendors are competing for in 2016, the sale of new software and hardware solutions, and that’s why we’ve focused on it here. For ScreenScape it refers directly to the revenues we generate through software subscriptions as we build out our network.
However, a true Internet of Screens is certainly coming. The traffic that travels over and through the combined global digital signage infrastructure will evolve. Just like the World Wide Web it will become more interconnected, more sophisticated and begin to offer new and exciting marketing opportunities. Therefore a secondary longer-term market opportunity exists, beyond the sourcing of the software and hardware infrastructure, in the metered flow of content and in the growth of advertising services that have been enabled by digital signage systems. The leading providers of digital signage technology solutions, who today charge for usage fees or licenses, will find themselves in a strong position to become the leading providers of place-based marketing services leading to new business streams that are based on transaction or brokerage fees. Ad-based digital signage networks, the world of outdoor digital media and what, today, we commonly refer to as Digital-Out-of-Home (DOOH) marketing, together is but a very early incarnation of that bigger opportunity we like to call the Internet of Screens.
Get the long form analysis
If you found this approach to sizing up the current digital signage market valuable you should know that it is just one excerpt of a more indepth analysis we’ve completed that takes more than just a quantitative look at the nature of the digital signage market. It takes a qualitative approach as well looking at various contours within and beneath the umbrella term digital signage. It’s a more thorough analysis that helps to answer questions like:
What is the difference between the digital signage market and digital-out-of-home (DOOH)
How will the market opportunity for digital signage evolve over time?
How can you break down the opportunity into distinct sub-categories? Who’s buying?
What are the use cases for digital signage? for digital out-of-home marketing?
ScreenScape is lucky to be able to work with professional, experienced industry partners like Ingage Solutions (“Ingage”) out of Oceanside, California.
Ingage is a brand of Federal Heath Sign, a visual communications company that traces its roots back to 1901. With over 110 years of full-service national sign manufacturing, project management, maintenance and re-imaging experience, our products and services offer solutions for any environment, from traditional signage to the latest in digital technology. Ingage Solutions creates collaborative end-to-end customer experiences, delivering unrivaled options for digital signage that create customer engagement.
We’ve just launched our self-serve e-commerce site. Now you can purchase digital signage software by ScreenScape in just a few clicks. Getting started with digital signage has never been easier. Buy your device online today!
Telus does a great job of describing how ScreenScape allows entrepreneurs to use their TVs to advertise their services & create new business income on their blog today. Putting digital signage in reach for any size business. Check it out on the Telus blog.
To succeed in the technology business you need to have good partners. Since being introduced to the Dell Wyse Cloud Connect back in 2013 when it was still called Project Ophelia we have enjoyed a productive and mutually beneficial partnership with the great team at Dell. Dell is known widely as one of the world’s leading computer hardware vendors and as a trusted name in delivering enterprise technology solutions. As much as we love their hardware, having worked with various Dell teams across North America, including the Wyse team in Santa Clara, California, the Cloud Client Computing Group in Round Rock, the Dell Canada team here in Canada, and many others along the way, I can honestly say it’s the people of Dell and their commitment to this solution that have been the most impressive aspect of the partnership.
Thank you Dell for being a great partner! The right technology solution for digital signage requires a happy marriage of hardware and software and we’re glad that we found you. Thanks for doing such a great job with Cloud Connect. Thanks for embracing our high standards in the areas of security, scalability, and ease-of-use and for working with us to tailor the solution for the needs of the professional digital signage industry.
For those of you discovering us for the first time, Dell Wyse Cloud Connect is a pocket-sized device that plugs into the MHL/HDMI-port of a television or other screen to display digital content in Full HD. Organizations can update, manage and monitor their devices through ScreenScape.com to deliver localized content to specific retail outlets. Non-technical retail store managers can set up the system quickly, easily and affordably to achieve professional-looking, on-screen promotional material in their store that can be changed or updated at the touch of a button.