ROI of Digital Signage
One of the tremendous benefits stemming from this golden age of digital marketing in which we live is that, theoretically, the return on investment (ROI) on the marketing dollars businesses spend can be calculated more quickly, and with greater transparency and accuracy. The digital signage industry in particular, which has seen an explosion of growth over the last decade, has been wrestling with this issue for at least as long, if not longer. And no wonder: as the technology has improved, and demand increases, the financial cost to the end-user has actually dropped, similar to what typically happens in the consumer electronics sector.
Of course, the operative word in that first sentence is “theoretically.” Digital signage networks allow for plenty of real-time data analysis, including audience numbers, level of direct interaction (especially in the case of kiosks and touchscreens), and even sales figures. Wal-Mart recently unveiled some impressive numbers following its deployment of an integrated digital media campaign that combined both in-store digital displays and its high-traffic online site.
Yet the average digital signage business user without the massive resources of a global retailing behemoth like Wal-Mart still struggles with how to calculate accurate or even semi-accurate ROI numbers. When you invest in a four- or five-figure digital signage network, how do you determine how much of your sales – whether they increased or decreased – following its installation can be attributed to the network itself and its content, and how much from some other, unrelated cause?
Enterprise digital signage experts caution that standard measurements of ROI aren’t enough when applied to something as multipurpose and multifunctional as digital signage. Digital signage, as with many marketing and advertising media, is often used for any or all of the following reasons:
- Brand awareness
- Brand recognition
- And yes, Sales
Any and all of these are perfectly legitimate reasons for using digital signage; however, each of them requires a different means by which to determine ROI. If, for example, a grocery store were to install a digital signage network to inform its shoppers of its non-grocery goods and services (e.g., floral shop, wine store, etc.), it might consider sales in those non-grocery areas to be a relatively good measure of the network’s ROI, but so would increased awareness among that audience that the store even had those goods and services.
In another context, a large research hospital might deploy a digital signage solution to inform its staff and faculty of its daily schedule of conferences, workshops and seminars held throughout the campus. Measuring the ROI of that network would take into account the rate of attendance to those events following the signage installation, as well as the increased awareness of those events among its staff. Hard financials wouldn’t even come into the picture in that context, since the hospital is clearly more interested in promoting its educational offerings and possibly increasing attendance at those events, not in actually selling anything.
Thus, once you determine your reasons for installing digital signage, you can more accurately determine a means by which to measure its ROI. There’s still more work to be done to get to a final, reasonable answer – measuring sales can be challenging in the wake of a digital signage launch, since correlation doesn’t always equal causation, i.e., an increase or decrease in sales may be the result of some external, unrelated phenomenon – but this first step is an essential one in analyzing the effectiveness of your digital signage investment.