January 2005

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Lessons Offered By New York Subway Digital Signage Network
By New York Subway Digital Signage Network


Lyle Bunn, Senior Partner
 Apogee Partners


The 80-display New York subway entrance digital signage network offers some valuable lessons to digital signage users and suppliers as it celebrates its first birthday. Significant advances have been made in digital signage during 2004 and 2005 is showing signs of being a busy year for dynamic digital signage.

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Digital Signage is being called "the last mile of a marketing program", offering more cost-effectiveness, flexibility and control at product and service selection locations. Many retailers such as Apple, McDonald’s, Bank of America, Circuit City, Safeway, Sears, Virgin Music, US Postal Service, Nike and others have run successful pilots during 2004.

At the same time, some of the firms shifting ad spending to digital signage include astute media buyers and brand-builders such as Bayer, Black & Decker, Colgate-Palmolive, Disney, DirectTV, Frito-Lay, General Mills, Heinz, Kodak, L’Oreal, Minute Maid, Nestle, Sara Lee, Starter, The New York Times, LG Mobile Phones, ABC, Fox, Univision and Lee Jeans.

Lesson One from New York is – "Build it and they will come". The pressure to get more results from advertising continues to grow and digital signage display is becoming a part of $149 billion annually invested in advertising. At one end of the scale, CPM rates of $2-6 make digital signage an inexpensive media buy. There is a question of how long this bargain will last as performance is increasingly proven and more advertisers take advantage of this powerful new communications medium. Revenue increases of 30% are being realized on products profiled, ranging to 109% for a new soft drink and 319% for a new calling card. Digital signage in bank teller lines results in customer inquiries about new services.

Lesson Two is that "Wireless networking is effective for digital signage". This is important for signage location flexibility and deployments in harsh, highly obstructed environments. "Wireless networking has performed well and the system has had no image drops whatsoever" said Rex Williams, President of UDN, which installed the New York network. WiFi 802.11 using multi-polarity antennas from WiFi-Plus Inc. (www.wifi-plus.com) has provided reliable, secure and cost-effective connectivity for the 80 New York street level LED panels. Williams added "Wireless works for digital signage. While it was the only option for installing the New York system, it has proven totally reliable with zero content drop performance".

"Cost-effective, reliable, fully secure and interactive image transport done wirelessly by satellite has long been used for Interactive Distance Learning (IDL) and business television applications" said Larry Steinman, President and CEO of BTV+ , which is contracted by some of North America’s largest organizations to deliver interactive content to more than 13,000 locations in the USA, Canada and Mexico (www.btvplus.com). Steinman adds, "digital signage applications benefit from the cost-effectiveness, location flexibility, security and reliability that satellite connections provide for digital (IP) communications. Overlaying full motion signage on an existing IDL or BTV (business television) infrastructure is easy. Content management, network monitoring, troubleshooting and reporting tools are well advanced."

Lesson Three is offered by Williams to others, in particular municipalities, looking to install digital signage networks; "It is imperative that great care be taken by anyone looking to get into this business to ensure that the integrity of the content is impenetrable by outside forces". System security may be inadequate at the network design stage, or be exposed as digital signage systems expand and use multiple media transport providers (ISP - Internet service providers). Williams added, "The system must be nearly "bullet proof" as far as hackers go". Signage software providers such as Automated Digital Signage Networks (www.adsn.ca) have taken steps to assure security at the content ingest, play-list management, display monitoring and other vulnerable points.

[an error occurred while processing this directive] Lesson Four is reflected by various digital signage projects during 2004; "Digital Signage offers high return on real estate".

Digital displays support commerce, public safety and information needs because they are so visual, vivid and eye-catching. Being able to provide information at a point of decision or when information is needed underpins the value of this communications medium for advertisers and public service providers.

Revenue measures from stock turns, margin per square foot or revenues from print (static) signage locations place a value on retail location space. Revenue from dynamic digital display at, for example $10,000 per month per display to the network owner, offers a good "return on space" comparison. The location benefits of use, such as product lift, branding, better customer relationships, liability containment, etc. are adding to the value assessment. The 25x50 inch LED signs positioned at the street level entrance to New York subways are providing a "return on space" and value along the supply chain from advertiser to signage provider.

The lessons are:

Several upcoming digital signage events offer updates and education on the rapidly advancing area of digital signage. Plan to attend Strategy Institute's Digital Signage Advertising Summit in Toronto, February 8-10, 2005 (http://www.strategyinstitute.com/020805_digisign/dsp_digisign.php ) and New York, April 26-27, 2005
(visit www.strategyinstitute.com).

Happy birthday New York subway signage network! You show the potential of an entire industry.


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