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Digital Signage – threat or opportunity? – Andy McCourt

If we were to believe all the hype behind the digital sign industry – LED and LCD screens containing changeable ads – you’d be justified in thinking the conventional sign industry is on its knees. One digital sign news source even headlined an article ‘The Fall of the Sign Industry.’

LED billboards
OK for Times Square or Kings Cross but flashing billboards can distract drivers on highways

Such blatantly misleading nonsense when all the facts and quality research points to growth in both conventional and digital signage, do little to advance the reputations of the digital signage vendors and spruikers.

The Mordor Intelligence report of signage values the global market at almost USD$46 billion in 2018, growing to around $48 billion by 2024. Most digital signage market research agrees the market value now is around USD$21 billion, rising to around USD$30 billion by 2024. Yes, digital’s CAGR is higher at about 8% against printed signage at 0.31%, but to quote Mordor, “…the market for printed signage is expected to witness significant demand during the forecast period.” This would tend to indicate downward price pressure on printed signage.

There is undoubtedly a shift towards digital in some sectors of signage. Australia’s oOH! Media reports that just over 50% of its revenue is now derived from non-printed signage – but this is large billboards and in-store/mall LED screens. Most signage printers running roll-to-roll and flatbed industrial inkjet printers and engraving machines, do little billboard work and a lot more diverse output from flags and banners, to fabricated structures made from acrylics, ACM, corrugated boards and strengthened paperboard materials.

Own the site, own the advertising

The large out-of-home advertising market depends on site ownership or control, so the big players such as oOh!, JC Decaux etc have the luxury of gaining their revenues in the same way that TV stations gain revenues – from selling campaign ‘airtime’ over their ‘networks.’ The same screen can carry multiple ads. The up-front high cost of switching a static billboard site to digital LED or LCD is amortised over ‘x’ years against ad revenue.

Static, printed outdoor signs need to be produced, periodically updated and physically installed. Digital signage can be changed or updated over the site owners’ IT network. This is the advantage that is used to sell the idea to advertisers. However, the fact that printed signage is ‘static’ is an advantage in some instances where a long-term or permanent presence is needed by one brand, without losing the space to other products and competitors at the click of a mouse somewhere in a data centre!

Think of other areas where digital signage would be lost: flags and banners where ‘flapability’ is the USP. Pop-ups and roll-ups where flexibility is not available to stiff screen-based signage (not yet anyway). Exhibition stand-builds: these have incorporated screens and video-walls for decades but the structure itself needs wide-format printed materials such as soft textile signage, composite panels, point-of-sale and adhesive stand graphics. The list goes on and includes putting the ‘sign’ onto items such vehicles (especially car wraps), clothing, baseball caps, drink coasters, pens, promotional products, golf balls, mugs and cups…the list is endless and unassailable by digital signage. Even if LCD or OLED screens become flexible, I wouldn’t want to put one through the washing machine.

Road safety - flashing, changing billboards under the lens

A worrying aspect of digital, changing roadside signage is that it may distract drivers. The Capitol Weekly in California reported a Berkley University study that looked at driver distraction from billboards, noting: "The latest research, Wachtel says, provides persuasive evidence that billboards – particularly digital billboards — take drivers’ eyes off the road for dangerously long gazes. That’s a problem especially when the bright electronic displays change messages, which typically happens every six to eight seconds."

So, let’s let the facts speak for themselves. Digital signage a USD$21 billion market; printed signage $46 billion – more than double. It may be higher when non-core sign products such as printed apparel and promotional products are included. We’re in a thriving, fascinating market that is using advanced digital technologies to produce tangible (‘Haptic’ is the posh academic term!), products that people all over the world want.

This is not to say we should avoid digital screen-based technology – it has a place and is great adjunct to printed output. If you can place, say A1 or AO screens around your town or area and ‘own’ the advertising space and have the IT skills to manage the content, go for it.

Last week we published the results of our reader survey on digital signage…let’s let them speak and round off the article. The question asked was:

"Does your sign business already offer digital LCD/LED sign panels and also manage the ads?"