Best-in-Class Companies Increasing Their 2010 Digital Signage Budgets

Gail Chiasson, North American Editor

A new research study by Aberdeen Research, Boston, conducted Nov./09 among 138 companies, shows that Best-in-Class companies are increasing their 2010 digital signage budget 3.6 times more than other companies.

The companies studied were divided into Best-in-Class (20%), Industry Average (50%) and Laggards (30%). Four key performance criteria were used to distinguish Best-in-Class companies: customer advocacy and the likelihood that customers will recommend the company’s brand; customer acquisition cost; brand awareness; and cross-sell and up-sell performance.

To achieve Best-in-Class performance they had to dedicate appropriate resources to address the differences between digital signage and traditional marketing and advertising approaches; establish contact management and a creation process aligned with digital signage objectives; and identify and track key performance indicators aligned with digital signage goals.

The research shows that distinct business pressures are driving companies to either migrate their existing static signage strategy to a digital signage approach or adopt a new digital signage strategy. Most notably, it reveals a connection between the changing expectations of target audiences and a decline in the effectiveness of traditional marketing tactics.

Best-in-Class companies share several characteristics:

  • They are 2.8 times more likely than others to adopt highly interactive content that responds to active customer input via touchpad’s and cell phones;
  • They are four times more likely than other companies to use content that reacts to passive input, such as mobile device proximity and optical sensors;
  • They are twice as likely as the Industry Average and 3.5 times as likely as Laggards to have defined performace metrics for digital signage;
  • They are likely to have resources devoted to digital signage content creation (54%) and management (58%);
  • They are 5.5 times as likely as Laggards to have a process for capturing and tacking customer engagement with digital signage.

“The distinct advantage of digital signage relates to its ability to deliver dynamic content to the audience at the time and place of the marketers’ choosing,” says David Hatch, Aberdeen’s senior vice-president, general manager and senior analyst.

Aberdeen’s research refers to several case studies as examples where digital signage has added to a company’s success.

“Digital signage has been a chisel which AT&T Mobility LLC has used to carve out a unique space in the cellular market,” says Hatch. “AT&T Mobile used digital signage to transform retail locations into ‘Customer Experience Stations’ where customers could encounter a range of AT&T products. Using touch screens and kiosks as part of its use. AT&T Mobile has seen notable improvements in sales at its retail outlets, and substantially increased brand awareness overall, thanks to the personal and interactive experience provided by its digital signage system.”

Another example is Stop & Shop, a leading supermarket chain with 375 locations in the northeastern United States and an additional 175 locations in the Mid-Atlantic region under the Giant banner. One of numerous digital signage applications it offers is the ‘Scan It’ handheld shopping device. This device is activated with a customer’s frequent shopper card and delivers messages and offers that are personally relevant to them, designed to save them additional money while they shop.

Aberdeen’s research found that Best-in-Class companies are more likely to integrate digital signage within existing media buys to enhance the performance of current campaigns before making major digital signage investments.

And Best-of-Class companies take 9.5 months to achieve a positive ROI on their digital signage initiatives, as opposed to 12 months for the Industry Average and 16.5 months for Laggard companies.

The research also noted that, among all technologies being used by respondents, content management software clearly presents the greatest differentiation between Best-in-Class, Industry Average, and Laggard performance. Best-in-Class companies are acquiring dedicated content management software to support that process.

It is also important to enable the delivery of digital content to the digital signage device where and when it is needed. Media server systems are critical to accomplishing this, and are used by Best-in-Class organizations at significantly higher ratios. Meanwhile, consumer mobile devices are only just being incorporated into digital signage strategies.

The research makes several recommendations to help companies achieve success, or higher success:

  • Laggard companies should develop a process for capturing and tracking customer engagement activities over time and define performance metrics for digital signage.
  • Industry Average companies should devote resources to digital signage campaign measurement and performance reporting, acquire digital dashboard or performance reporting tools, and devote resources to content creation and content management.
  • Best-in-Class should have or increase the ability to link results of digital signage activities to increased revenues and other financial outcomes

The full report is available from Aberdeen Group.

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