Industry Revenues Grow 24.5% So Says Lyle Bunn

Gail Chiasson, North American Editor

Industry revenues grew 24.5% in the past year to reach USD 1.687 billion Lyle Bunn told attendees of the conference in Montreal yesterday (18th November)

Describing 2008 as having been a year of maturation for Digital Signage and Digital Out-of-Home, Bunn said that he expected revenue by 2011 to reach USD 2.6 billion with 837,000 displays of 40” or more across North America – plus “lots more small screens.”

Bunn has extensive knowledge and experience in the industry, particularly as a consultant to both governments and private industry (his business card reads ‘strategy architect’ and you can see his 17 page biography on his Web site says that North America is at or ahead of the digital pace of other countries worldwide.

Asia, he said, has “lots of individual signage, but it’s not networked

“There are lots of compelling indicators to show the maturing of the industry,” he told JADN delegates. “Companies are using digital signage for cost reduction and for branding as well as merchandising.”

Bunn gave as one example, among many, General Motors’ use in all Saturn plants of digital signage as a cost-reducing way of internally contacting staff (he expects it may add advertising to these displays in early 2009.)

Other examples are the Bank of Montreal putting in digital systems through Cisco, and Toyota using digital signs at dealers to reach consumers directly.

“In a study of 600 companies, 32% of them plan to put in between one and 24 screens within the next five years,” he said. “And there’s a huge market for small screens.”

Retail took centre stage as discussion centred around Walmart’s R&D investment of USD 10 million before deciding to install its next generation network of 27,000 screens in an additional 2,700 stores (it’s already in 300 outlets in the U.S.)

“Advertisers are seeing that digital advertising works, attracting people to spend more dwell time in departments, and at the sales level,” said Bunn, citing Walmart’s digital advertising for Clairol that resulted in a 4% category increase and 16% actual sales increase for Clairol. Walmart has its new Studio Squares agency specialized in content strategy and personalized programming.

Interestingly, various JADN audience members stressed that it’s easier to sell digital advertising and signage by dealing directly with the advertiser rather than an ad agency, and that – rather than requiring a long lead time – developing an advert based on the advertiser’s strategy and advertising on TV, for example, can often be turned into a digital signage ad within a day or two. (eg. Three five-word messages can quickly be turned into a nine-or-10-second loop.)

Bunn said that of 800,000 screens studied, more than half are supported by advertising, with 8.7% of them 100% ad-supported.

He also said that the current economy can be good for digital business as advertisers look for cost-cutting and new ways to stand out and reach the customer with a measurable system – he noted as allowing media to compare the value of digital against traditional advertising.

Also augering well for the industry, “Investors are interested in digital because they can see that it works,” said Bunn.

(Several speakers noted that the current economy will also weed out a lot of smaller digital signage companies that currently have good ideas but don’t have solid history and backing.)

“In 2009, the level of content will be better, which will help growth,” said Bunn.

“2009 will see growth in use of digital signage for consumer services. And quick-serve restaurants (QSR) will use it to captivate people and have them spend longer in the venue. Further, 2009 looks like the year for breakthrough infrastructure happening.”

In a Q&A session, Bunn and panelists David Haynes, sales director for BroadSign, Claude Sénéchal, vice-president sales and marketing for Intello Technologies, and Denys Lavigne, president of Arsenal Media, were asked: –

  1. “What is often overlooked for digital signage by the end user?”

    Their answers included: the process of how it can be operated in his environment; that fact that it takes more time to develop and install; that it costs more than he expected; and content strategy.

  2. “Who at the client side should be at the table when discussing installation of digital signage?”

    The conclusion was that, if there are more than four or five people, things become difficult. Best to have are the marketing director, IT specialist, merchandising director, and store operations manager.

    And, they said, “Keep out all the various department directors with their own agendas, and keep the chief financial officer out at the beginning because he will slow down the process by saying you can’t afford it – although you’ll have to eventually bring him into the process so that he can see the savings. Further, align with people who know digital signage Build a team and take a strategic step-by-step approach because the client has to learn.”

Bunn has just put an extensive 2008 overview of the North American market under RESOURCES on his own Web site.

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