When speaking about electronic signage, first, one must distinguish the billboard market from everything else. Mark Hanley, president, I.T. Strategies, Inc., has studied the impact of digital billboards for the past half decade. Rewind to 2008, and digital billboards posed no imminent threat to print counterparts. Then, I.T. Strategies estimated that there were 500 digital displays in the U.S., out of a total 450,000 billboards.

One of the compelling arguments for digital billboards is revenue potential. In the January 2011 study, Electronic Billboards in the U.S. – 2010, I.T. Strategies suggests, “the revenue generated from an electronic billboard is up to ten times higher than print billboards, in part because the number of advertising turns is typically six to 20 times greater.”

However, the market is clearly restricted by geography—large metropolitan and high-traffic regions are ideal. There are locales that are decidedly more billboard friendly than others, according to Hanley. In certain municipalities they’re banned altogether, out of concern for safety.

Still, there is modest growth in the electronic billboard space. Hanley foresees an install base of 12,000 to 16,000 by 2015, but this will still only represent 3.5 percent of all billboards installed nationwide.

“I would characterize the exterior electronic billboard market as a more stable dynamic than indoor electronic signage, which is a whole other kettle of fish,” forewarns Hanley.

Everything but Billboards

Beyond billboards, the market for other types of indoor and outdoor electronic displays is far more dynamic. Thus, it’s a bit more difficult to define and predict.

David Conrad, marketing manager, Mutoh America, Inc., notes that the electronic signage model is exponentially more expensive than its print alternative, and that’s a daunting barrier for print suppliers and buyers alike. In addition to cost distinction, there are other variables that naturally dictate whether a static, printed sign is more appropriate than electronic, and vice versa.

“A lot of the indoor graphics being digitally printed these days are not just strictly for advertising purposes. Often, they’re a combination of brand communication and décor. That’s a very different function than a screen performs,” notes Hanley.

“A screen, some people say, is a method for attracting short-term attention. Like a television, it compels you to stop and look. That’s unlike what a poster does, for example. A poster becomes part of the ambient environment. It semi-passively influences you about a brand, and it is capable of giving you simple information,” he adds.

Being that the electronic signage market is still rather immature, most questions have to do with the business model itself.

“Nobody has concretely defined the supply chain. What are the products? Who is taking part? What are the services worth,” ponders Hanley.

“For example, if a retailer wants to install a display,” he continues, “Who is going to sell that to him? Is it the person who rents out the retail space? Or is it the sign shop that will be contracted? Then, who controls the content, and if it’s the sign shop, what are customers willing to pay for that service? These displays are changing all the time, and I don’t think anybody has the science down yet as to how often the display should change, and what products or services are best suited to this type of medium.”

The introduction of electronic signage to the graphic arts market distinguishes service suppliers—separating pure print providers from a new breed of marketing service providers.

That’s an important distinction, according to Tim Greene, wide format service director, InfoTrends. The marketing service supplier thinks big. “They can say, ‘You want to integrate quick response codes into these signs? We can help you with that. Or if you want to go with a multimedia display, we can help you with that,’” he explains.

“It’s probably a more complex and longer selling cycle, but at the end, it’s rewarding to be that kind of company—to be a partner, as opposed to just a guy who gets sent specifications and is asked to bid,” continues Greene.

Adding electronic signage expertise to the menu requires more of an active role during the conceptual phase of design. “Then you’re dealing with the consultative sale. That’s what everybody wants. That’s the key role that some companies can play. If you’re just responding to bids, you’re always going to find yourself complaining about price competition,” he shares.

Doing Digital Right

Burney Dobbs’ Fastsigns of Athens, GA produced its first electronic display five years ago.

“I started out as one of the few people in the Fastsigns network that bought a $10,000 digital sign and didn’t know what the heck I was doing with it. But that’s how it is. You have to immerse yourself. That’s the only way you learn. We are very fortunate—with our leaders at Fastsigns and everyone in our network—to have access to some knowledgeable partners. Along the way, if we didn’t have the answer, we could find someone who did," he says.

Today, electronic signage is such an important part of the business that Fastsigns is one of two companies in North America to have a dedicated server expressly for it, states Dobbs.

Most anyone can master the technology—learning the basics of display technologies; how lighting comes into play, for example—but it takes particular skill to create and manage digital content, according to Dobbs. A central Scala, Inc. server—shared by the franchises—enables Dobbs to do just that.

“With the software, I can sit in my office in Athens, GA and program a display anywhere in the world. That is a big piece of the puzzle. If you’re going to compete in this market, you must be able to manage content,” confides Dobbs.

“The other component is being able to create content,” he suggests. “I’ve got two graphic artists, and they create content each and every day, whether it’s a sign, a digital image, or a video.”

Dobbs concurs that electronic signage lends itself to more of a consultative sales strategy. Being able to devote the resources to it has paid off, he asserts. “We had a breakthrough year as far as electronic signage is concerned.”

One might think that this growth adversely influenced Dobbs’ print business, but he says that’s not the case. The first quarter’s print sales were up by 45 percent.

The print provider currently runs three Hewlett-Packard (HP) Designjet 5500PS printers, a Mimaki USA, Inc. JV3-160 SP, and an Epson Stylus Pro GS6000—all 64-inch printers. A standalone Mimaki cutting plotter rounds out the equipment list.

“Fastsigns recently changed its own brand image. Our new slogan is: more than fast; more than signs,” notes Dobbs. “Rather than being known as a supplier that creates something static, we’re now becoming known as a supplier that creates any product or solution to fit any need—print or digital—and any budget.”

They are not only selling $80 banners; but quoting $750,000 electronic signage projects to customers.

On the Digital Horizon

What’s next in digital signage? Interactive and experiential, perhaps as many experts are discovering.

After spending time at the Digital Signage Expo in Las Vegas, NV earlier this year, Marcus Fischer penned an op-ed for AdAge Digital, “The Next Generation of Digital Signs Will Interact With You.”

“The most important thing right off the bat—the signage industry has come a long way, and that growth is only going to continue,” writes Fischer. “Some estimates put the number of digital signs at 20 million by 2015.”

Based on techno-teasers at the show, many will be interactive—leveraging the somewhat ubiquitous touch screen capabilities of electronic displays, and even facial recognition software.

“Some early applications of this were recently launched in a London interactive bus shelter that recognizes gender and service appropriate content,” notes Fischer.

Dobbs cites Christie Digital Systems USA, Inc.’s new interactive multimedia design for the Miami Dolphins, using Christie MicroTiles. Fans can literally get their hands on the interactive technology and manipulate the content in a uniquely personal way.

It will become increasingly common for sign buyers to conceive and demand multi-media solutions to indoor and outdoor signage, these experts concur. The question remains, will the traditional sign shop, steeped in paint and print, be able to capture those jobs?

“For example,” Conrad suggests, “say you’ve got a sign shop that wins a contract for the local stadium. That venue may need everything from menu boards to big centerfield display signs, LEDs, and perhaps plasma screens here and there. But they also need banners and directional signs. The smart suppliers will not put all their eggs in one basket and only offer electronic signage or print media. They’re going to learn how they complement one another, and begin to offer it all.”

There are two ways to achieve that goal, according to Conrad. A print service supplier may invest the resources and retool the business model to become experts in all things digital. Or they may follow their own lead and develop strategic partnerships, as they have done with installers.

“There are a lot of companies in wide format that, frankly, are somewhat turning a blind eye to electronic signage. But if there’s something out there that’s truly threatening the way we do business, I’d want to take a look at it,” according to Greene.

While content may be king in other realms of communication, when it comes to signs—especially electronic—context reigns supreme, he adds.

Greene also suggests that print service suppliers already working with retailers may have an advantage in adding digital signage to their roster.

“There is a mindset,” he explains. “It’s not about just doing something because you can do it. It’s about when and how to deliver the message so that it’s most effective. That’s what signage is, after all. It’s communication. How do you want to target that communication? And how can you most accurately represent your brand with it?”

There’s a Place

“Electronic signage isn’t really dramatically impacting print futures at this point in time,” reports Hanley. “But since none of us in the industry are bold enough to predict beyond five years, everything is subject to change. Electronic display will have its place in the market, but I also think that printed display is so intuitively easy to handle, and it’s so obvious in its function, that it’s hard to imagine anything quickly displacing it.”

The markets for electronic billboards and all other forms of electronic displays have some things in common. They’re running parallel to print, each offering a different dynamic and serving a particular function. In addition, they are somewhat limited in scope, because of cost and context. At least for the time being.