Digital Signage Market to Grow Despite the Economy
This could be the right time to think about diversifying your portfolio with digital signage solutions.
This year won’t be a total bust for solution providers–at least not those whose companies offer digital signage solutions. Total revenue from the digital signage market in the U.S.–including hardware, software, installation, and maintenance–is expected to grow by about 33 percent in 2009, according to a report by ABI Research released this week. This healthy growth rate may be somewhat surprising, considering that the forecast factors in likely reductions in adoption due to the current recession.
There are several reasons for the positive outlook that are tied to longer-term trends, says Zippy Aima, industry analyst covering digital media for ABI Research. “Traditional advertising media are losing their appeal for many consumers,” she says. “Consequently, digital signage has emerged as a way to deliver highly customized and targeted messaging in a variety of locations. And in a fast-changing world, digital signs’ ability to be updated in real time is a real benefit.” Retail, education, hospitality, and corporate communication are the first verticals adopting digital signage, says Aima.
Other factors spurring adoption include improvements in the appearance of displays, the generally falling prices of electronics, and less expensive data storage, according to ABI’s report, Digital Signage Market Analysis. Digital signage solutions that include interactivity can offer a more compelling user experience and provide valuable consumer feedback to marketers as well.
But the report indicates there are factors working against the adoption of digital signage. The market is fragmented and comprises a large number of players, for example, making it difficult for customers to identify the solutions and technologies they want. Data security concerns and a lack of standards also impede the growth of the industry to a certain extent.
Cost is a factor too, especially in today’s economic climate. “Although digital signage technology promises increases in sales and revenue, such growth is not immediate,” says Aima. “The investment in installing a network can still be very high depending on the number of sites and the cost of the other components. Yet businesses with ready access to capital may see a real opportunity here.”
