Digital Signage: InfoTrends Sees Significant Growth For Narrowcast

Market research and consulting firm InfoTrends last month forecast strong growth for digital signage in North America for closed-box applications between now and 2011.

The research firm expects a compound annual growth rate in the number of broadcast digital signage displays of nearly 12 percent between 2006 and 2011. It also forecasts strong compound annual revenue growth of 18.5 percent for the period, reaching total revenue of $2.59 billion for 2011. For comparison’s sake, the narrowcast industry was valued at $1.1 billion at the end of 2006 with an installed base of 630,000 screens at 97,000 sites.

The findings are part of a new InfoTrends report, “Narrowcasting: The Opportunity for Digital Signage and In-Store TV Networks,” the third major study researchers have conducted on this market.

Questions about the effectiveness of using narrowcast to deliver targeted advertising appear to be fading. InfoTrends reports that respondents to this year’s study were much less concerned about the lack of measurement of adware’s effectiveness than they were in their 2004 study. The researcher attributes the reason to the growing body of data showing that narrowcasting systems they are effective.

In addition, the report showed that of the 51 current users of networked digital displays or in-store TV systems who responded to a structured survey for the report, 80 percent plan to increase their network usage in the next three years and remaining 20 percent expect to maintain usage at current levels.

What does all this point to? Digital signage networks for narrowcast advertising are becoming part of the mainstream, not some kind of fringe experimental medium reserved for the daring and forward-thinking. Rather than being seen as a risk in the eyes of media buyers, they are becoming an essential communication avenue for marketers and advertisers who want to influence consumer spending decisions at the point of purchase.

It’s not particularly surprising that narrowcast digital signage networks are entering the mainstream. Put yourself in the shoes of advertising buyers and sellers who are witnessing a radical transformation of a mainstay of advertising: television. Television, once a medium they knew and understood thoroughly, is moving away from a controllable and definable advertising proposition to one that gives viewers greater control of what they watch and when, most notably for this discussion, viewers. commercial.

Consider an article this week from the Denver Post announcing the fact that venerable ratings agency Nielsen Media Research has improved its viewer tracking for the digital age. According to the article, watching a particular show after three days on a DVR was 108 percent of the live views of the same show. Sounds pretty good so far.

However, the article quotes an executive from Group M, a New York ad agency, as saying that many ad agencies have analyzed how viewers watch in time-shifted mode (i.e., via a DVR) and have determined that 60 percent skip commercials. Viewed in light of the fact that 18 percent of TV households have DVRs and more are on the way, it becomes apparent that as so-called “live viewing” gives way to “timeshift” viewing , the number of viewers watching commercials will decrease. hastily

Narrowcast networks with digital signage screens located at the physical location where consumers decide to make a purchase do not give people the option to fast-forward beyond the commercial. For that reason alone, it would not be surprising if InfoTrends’ forecast for digital signage narrowcast revenue growth and growth in the number of displays in North America were to be exceeded.

Leave a Reply

Your email address will not be published. Required fields are marked *