Strong Growth Ahead for Digital Signage

June 22, 2007

This article is included in these additional categories:

Out-of-Home | Technology

After struggling in its early years, the business of networked digital displays in retail and other public spaces – a “narrowcasting” segment – is now on the path to sustainable growth, according to an InfoTrends study, “Narrowcasting: The Opportunity for Digital Signage and In-Store TV Networks.”

At the end of 2006, the narrowcasting industry was valued at $1.1 billion with an installed base of 630,000 screens at 97,000 sites – a compound annual growth rate (CAGR) of 56% from 2004 to 2006, and the first time that the narrowcasting industry has exceeded estimates, according to InfoTrends.

InfoTrends forecasts CAGRs of 18.5% for revenues, 8.9% for sites, and 11.9% for screens between 2006 and 2011. By 2011, total revenues are expected to reach $2.59 billion.

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Other key findings from the study:

  • The typical survey respondent – managers involved in buying, designing, placing out-of-home media – is using five different types of media, with printed signage and outdoor signs still the most common.
  • As the body of data supporting the effectiveness of narrowcasting systems continues to grow, respondents in the current study were much less concerned about issues such as lack of measurement of ad program effectiveness, compared with the survey conducted in 2004.
  • Of the 51 current users of networked digital displays or in-store TV who responded to the survey, none expected usage over the next three years to decrease – and 80% expected it to increase.
  • Retailers and brand managers want their promotional programs of any type to deliver sales lift and increase traffic, and they are becoming more confident that narrowcasting systems can deliver on that goal:
    • Securing repeat customers is their secondary goal.
    • Attaining ad revenues from such systems is considered relatively unimportant.

About the study: Primary research consisted of direct contacts with industry vendors as well as a structured survey with 244 managers involved in buying, designing, or placing out-of-home advertising and related media, corporate/IT managers, and systems integrators and VARs (value-added resellers).

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