Digital signage has become one of the most preferred advertising and communication tools over the last couple of years. The number of businesses employing it continues to skyrocket, and according to this MarketWatch report, by 2023, the digital signage market is expected to be worth about $33 billion.
The first step to leveraging the full potential of digital signage is developing an understanding of what it is, how it works, and all that it has to offer. You can find additional different resources that cover the most important aspects of digital signage here. With this foundation in place, you will be able to create the right strategy for your business and successfully deploy it.
WHY HAS DIGITAL SIGNAGE BECOME SO POPULAR?
The use of digital displays has been proven to provide a host of benefits for businesses. Higher levels of engagement from customers, effective media for relaying information, relieves employees of non-core duties, increased profits; just to mention a few.
Research indicates that compared to static displays, digital displays capture 400% more views. Digital signage promotes brand building by creating a stimulating environment while influencing consumer behavior in real-time.
HOW DIGITAL SIGNAGE CAN ENHANCE YOUR BRAND.
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IMPORTANCE OF DETERMINING RETURNS ON DIGITAL SIGNAGE
For both large and small organizations understanding the impact of an investment is essential to creating a stable and profitable digital marketing model. One of the ways to determine this is by calculating ROI and ROO. By measuring the returns of digital signage, businesses can measure their effectiveness over time.
Is digital signage a useful and profitable tool for our business? This is the question every organization should seek to answer. For large organizations determining the returns of digital signage investment is critical for spurring growth, optimizing processes and planning for the future. For smaller organizations such as startups and SMEs, digital signage is a major investment which can lead to success or failure. The measurement of ROI (Return on Investment) or ROO (Return on Objective) is extremely important for small businesses.
To determine whether digital signage is a good investment in the long run, it is critical that an organization understands its goals. What you want to gain from the investment will determine whether you measure ROI or ROO and the metrics that you will use.
RETURN ON INVESTMENT vs. RETURN ON OBJECTIVE
For most companies and especially those in retail, the primary objective is driving sales. The basic method of determining whether their digital campaigns are profitable is comparing sales before and after the campaigns. The company will then proceed to subtract the total cost of digital signage from the increase in profits. Factor in reduced costs, time savings, and any variations in operation costs, and this will represent your ROI. While there may be other factors to consider, such as customer satisfaction the primary form of measurement is quantitative data.
However, for many other industries investing in digital signage, many not directly translate to monetary gains. Digital signage may be used for sharing company information, providing real-time updates, and educating consumers. For such uses, there is no direct correlation between funds invested and returns. Instead, companies have to rely on qualitative data by measuring consumer or employee satisfaction, variations in interaction, and social media engagement. When relying on qualitative variables, you measure Return on Objective or ROO.
DEFINE YOUR GOALS
To determine which measurement of returns is right for your business, you should start by defining the goals of your digital signage campaign. What do you want to achieve from the implementation of digital signage? The answer to this question will guide your team in formulating the best forms of measuring either ROI or ROO or a combination of the two.
Determining the goals of your digital signage campaign is the most important step in calculating returns on investment or objectives. This helps your team determine indicators of success, create strategies for measuring critical metrics and layout a timeline for collecting data, compiling evidence, and reaching a conclusion.
For example, if a convenience store is running an in-store special on a food item, heavily promoting it on their digital signage within the grocery or hot food zone during the corresponding dayparting, you can evaluate the total revenue in sales for the in-store special products, even breaking sales totals into dayparts. This data can be cross-referenced and directly correlated to the effectiveness of the digital signage promotion - reasonably attributing the investment of the digital signage promotion to the increase in product sales that are advertised.
Another example of a defined goals and tools to measure digital signage ROI include:
- Increase in total sales for a retail product that has been showcased on digital signage.
- Quantify the total revenue for engaging in an activity that has been promoted on digital signage. This can consist of product promotions, sales, specials, cross-promotions, awareness, attendance, etc.
- Analytics measure and present information about your results that you can use to improve your program, increase your digital signage ROI and boost your business.
HOW TO DETERMINE SUCCESS OF DIGITAL SIGNAGE
The initial step to analyzing the effectiveness of a digital signage campaign is to determine if the goals set at the beginning of the project have been met. This is the primary factor in determining digital signage success.
Once you have determined that goals have been met, you will compare your qualitative data to your TIC (Total Installed Cost). However, it’s critical that you factor in any changes that may have affected the TIC to get accurate results. Though the increase in sales may not be the primary purpose of a digital signage campaign, if there is a noticeable increase in profits after implementation, this should be deducted from the TIC before making a comparison with qualitative data. It is also critical that you determine any variations in operational costs and marketing expenses.
Determining ROI and ROO of investing in digital signage can be complex. However, when goals and steps to measuring goals are clearly stipulated, the results are invaluable. It is important to note that ROI and ROO do not have to be mutually exclusive. In most cases, it is critical that businesses measure both the quantitative and qualitative gains of digital signage.