The ROI of Digital Signage

Market Trends

The retail and out-of-home landscape is being moulded by digital signage. The long-standing electronic boards that have shone over Piccadilly Circus are being joined by digital street billboards and screens positioned in train stations, shops, galleries, theatres and supermarkets. The out of home (OOH) to digital out of home (DOOH) transition has gradually cemented itself over the last few years. Wherever we go, digital signage has become a sensory influencer

Quite simply, digital signage can be a powerful tool for advertisers looking to reach and engage with their audience in a more impactful and effective way. It can be used to display a wide range of content, from static images and text to interactive elements and video. This versatility allows advertisers to create more impactful and engaging messages that can influence purchasing decisions and enhance the customer experience. 

While the specific return on investment (ROI) of digital signage can be difficult to calculate, there’s no questioning its impact, making it one of the most powerful revenue and awareness generators today.  


Attract attention, influence purchasing decisions, increase sales 

The power of short, eye-catching video content has been propelled by the likes of Instagram and TikTok, designed to capture the attention of viewers in seconds. This is exactly the initial role digital signage plays. Whether an LED screen is placed in a shop window, enticing pedestrians from the street, or illuminating supermarket aisles with product offers, the aim is to attract and influence – and quickly.

The supermarket example showcases how ROI and sales can be directly attributed to digital signage. By placing screens by certain food sections and displaying relevant brand content,  you can see how many purchases of said product have been made during the time the advertising was being shown. This is directly influencing purchasing decisions in seconds. 

But with outdoor or public signage, the process becomes much more indirect; it’s near impossible to calculate the direct ROI of this advertising. Instead, it’s more about the creativity of content designed to enhance a brand’s awareness. Let’s say Coca Cola takes over a digital signage screen at a railway station. It’s incredibly hard to measure the direct impact as you can’t have an immediate purchase of goods (unless brands decide to link such content to shop sales in the station, for example). 

By taking in the number of pedestrians at the location during advertising, you could gauge a rough scale of how many people may have taken in the advertising at certain moments. But the power of digital signage here is to spark brand awareness that catches attention, emotively communicates with potential customers and generates a wider influence. 


Reduce costs

Cost is based on strategy. Strategy is based on vertical. So, again, it’s highly correlated to the context and situation. Yes, there is the initial cash hit for digital implementation and the running costs of keeping this technology active. But alongside the ability to create greater, flexible awareness that increases sales, there is an obvious and clear-cut cost saver. 

Printing and distribution is immediately taken out of the equation. By removing paper waste and optimising content, not only is efficiency enhanced and costs reduced, but it creates a much more sustainable approach (with further potential to have renewable energy power digital signage screens). 

Supermarkets, for example, have a lot of promotions that change daily. Instead of paper displays, newsletters and vouchers – which make it infinitely harder to keep up with the stream of changing promotions – digital signage immediately unlocks paper-free advertising that is adaptable in real-time, opening up whole new avenues of opportunities. 


Advertise in real-time

A chief trait of digital signage is that it can project whatever, whenever. For authorities like TfL, for instance, live updates and travel advice can be changed in line with the current status of travel, helping to encourage other forms of transport for ease of journey and to manage traffic flow. 

For brands, it opens up an array of possibilities. Offers can be displayed in relation to campaigns, creative videos can be produced to entertain and content can be adapted in line with a variety of factors such as time of day, weather and footfall. For example, a rainy day could be aligned with imagery showing people enjoying coffee inside the shop. 

Not only does this enhance efficiency and the customer experience, but it can increase customer satisfaction and loyalty. Crucially, it’s a far more streamlined, efficient and effective approach to advertising than traditional methods. This ability to produce real-time content is opening up new ROI opportunities for marketing agencies and brands. 


Create a world of revenue opportunities

The technology equips brands with the ability to sell ‘digital space’ to other brands. A new revenue stream at no extra cost. This can happen from collaborations and agreements. For example, a multi-brand trainer store could sell this space to another brand that they also sell themselves. It’s very strategic. The brand could have domination of all the screens during the day, at precise times or take over customisation of the shop window. This is all while the store concurrently generates revenue. 

This also works with different sectors that aren’t in direct competition with each other, helping to provide a mutual benefit of either exposure or revenue. Supermarkets too can sell to brands strategically and weigh up the costs of signage space depending on time, positioning and sales. As with most things, the negotiation of price for both product placement and signage has to happen on a case-by-case basis. 

And then there is DOOH, where on street placement is sold and randomly flits between sectors such as beverage, fashion, travel and tourism. DOOH is totally free from brands that manage them, and this is where the outdoor advertising market is heading.


Future of digital signage 

Is digital signage the future of advertising and retail? Digital signage is digital communication – what you see on the screen or in the shop needs to reflect what you see on your phone. This is the place the advertising world is shifting to, and the whole omnichannel experience will land on digital advertising. 

And why not do that if you’re a brand? Communicate in the moment, save on costs and optimise advertising’s impact, efficiency and, crucially, the customer experience. Why not also earn money from your own shop and digital signs? 

Brands are looking for earnings in every sector. And, as of yet, the potential of digital signage is pretty untapped. Its growth presents an exciting new realm of possibility.  

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