Digital signage is a combination of electronic display devices and content that delivers information, advertising and other messages to a broad or narrow target audience. The benefits of digital signage over traditional static signs are centered on two basic concepts:
- Digital signage content is easily manipulated, changed or enhanced, thereby allowing far greater flexibility, updating and “tweaking” of marketing messaging during a campaign rather than requiring a re-write or re-launch of an entire campaign.
- Digital signage allows for interactivity with intended target audiences rather than just the passive experience associated with static signage.
The result of this is a more personalized, interactive, and timely message or incentive to consumers where (whether a location or via a device) and when it can have its greatest impact. This ability is making a difference.
Impact on Performance and Business Background
Aberdeen research shows that companies with at least two years of experience using digital signage (early adopters), are seeing greater performance improvement versus companies with less experience (recent adopters). For example, early adopters of digital signage achieve 1.3 times greater improvement in their cross-sell and up-sell performance compared to recent adopters.
Research suggests that without question, the top strategy among all companies pursuing digital signage is to reach the consumer at the point-of-sale. These companies seek to influence purchase decisions including up-sell opportunities. As an example, grocery store chains are now experimenting with digital signage that integrates same-day or historical sales data into the selection of messaging and incentives for specific customers.
Companies build and/or acquire certain capabilities in order to execute on their digital signage strategies and achieve the performance gains illustrated in Table 1 below. Capabilities that distinguish early adopters from recent adopters are broken into two categories; “performance management” and “organizational management.”
Table 1: Early Adoption Results in Greater Customer Impact
Performance MetricsRecent AdoptersEarly AdoptersCustomer loyalty29 percent44 percentCustomer experience quality46 percent61 percentCustomer retention30 percent49 percentCurrent customer satisfaction46 percent65 percent
Findings from Aberdeen’s January 2010 report, “Digital Signage: A Path to Customer Loyalty, Brand Awareness and Marketing Performance,” suggest that dedicating organizational resources devoted to digital signage content creation and management helps to improve marketing effectiveness; improved performance in marketing effectiveness by early adopters justifies greater investment in people as well as other resources devoted to digital signage. Early adopters are more than 70 percent more likely than recent adopters to have resources devoted to content creation (53 percent vs. 30 percent) as well as 60 percent more likely to have resources devoted to content management (53 percent vs. 33 percent) for their digital signage initiatives.
A digital signage strategy is not something that is purchased once and implemented overnight. Measuring performance is crucial to achieve the gains reflected in Table 1 above. Careful measurement of results leads to proper investment based on areas of the business where desired results are achieved. Measuring performance is a critical aspect of any marketing initiative, but when it comes to digital signage activities, companies are not overwhelmingly doing this. Twenty-nine percent of early adopters have defined such performance metrics to measure compared to 17 percent of recent adopters.
Establishing the relationship between customer data and product data to drive precision marketing effectiveness is another capability that early adopters are increasingly relying on in support of their digital signage strategies (21 percent vs. 7 percent). It allows to route customers to specific products based on their previous and current purchases, and directly impacts cross/up-sell performance.
Observations and Suggestions
Companies should carefully observe the performance improvements that early adopters have achieved with digital signage. The following actions will help spur the necessary performance improvements for prospective as well as recent adopters and help them move faster along the maturity curve:
- Determine a specific strategy instead of following a holistic approach. Use digital signage to interact with customers at the point of sale.
- Define performance metrics to measure the effectiveness of digital signage initiatives.
- Devote enough organizational resources for digital signage content creation and management.
Omer Minkara is a research associate at the Aberdeen Group.
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