Digital Signage: Is the Business Model Finally Catching Up with the Technology?

TFT-LCD makers are looking to the digital-signage market to move production to the next and larger stage. The large-format commercial flat-panel-display market is forecast to grow, but the usage models for advertising and information dissemination via digital signage are still being worked out.

by Chris Connery

THE TERM DIGITAL SIGNAGE is now being used quite loosely in the display industry as well as in the popular press. It encompasses small electronic shelf-label liquid-crystal displays (LCDs) or electrophoretic displays, medium-sized thin-film-transistor LCDs (TFT-LCDs) used in check-out lines at grocery stores and gas pumps, poster-sized LCDs and plasma-display panels (PDPs), and billboard-sized light-emitting-diode (LED) displays. The most common use of the term digital signage over the past decade, however, has been for large-format (26-in. and larger) LCD and PDP products, and these are the focus of this article. The anticipation is that displays used in out-of-home (OOH) environments to convey dynamically changing information and advertising will be the next large-area application for flat-panel displays (FPDs) and that this application will join TVs, monitors, and notebooks as a major market for TFT-LCD technology. Many in the industry even refer to this market as "The Fifth Screen."

With TFT-LCD production under way at Gen 10 fabs, there is speculation about Gen 11 and larger lines, but that raises the question of whether such large fab lines are needed (to produce televisions at any rate) because surely there will come a point at which the average-sized FPD TV is "large enough." At that point, bigger glass substrates would simply allow for more of the same size products to be produced from one piece. The question for LCD producers is if there is a market beyond televisions that demands even larger displays and whether or not such a market is already being served by technologies that have more cost-effective scaling abilities, such as PDP, LED, and projection technologies (both rear and front). Certainly, because substrates have grown larger over the years, new applications have been discovered and have moved from smaller-sized notebook PCs to desktop monitors to TVs, with digital signage being the next logical step.

One of the most visible applications of this OOH signage is the poster-type advertising seen in airports, malls, and nearly any public space imaginable. These posters are ripe for replacement by digital technology for the following reasons: they already have pre-defined dimensions (typically 60–80+ in. diagonals); the vendors associated with these displays would seemingly profit by updating the content dynamically; and the ecosystem for this type of public-space advertising seems to be well-established. Increased production of PDP and larger LCD glass substrates planned in the near and long term seems to be helping to make this vision a reality. So, using LCD production as a template, digital signage really does seem to be poised to become the next major large-area application for FPD technology (Fig. 1).

Digital-Signage Market Is at the "Frontier" Stage

Digital signage has caught the attention of the likes of Intel, Microsoft, Cisco, H-P, and others. Intel and Microsoft are even bullish enough on the technology to be spending money on demonstrations showing the power of digital signage in retail. In 2010, these two companies have been showcasing an in-store kiosk, with elements ranging from large-sized LCDs, to touch activation and interaction, to gender and ethnicity recognition.

While such efforts are important to create awareness of the category and provide manufacturers and vendors with concepts of what might be, other vendors have already been actively participating in making this market, though still quite fragmented, a reality. Behind some of the most visible digital-signage installations are major players in the FPD market, including Samsung, Panasonic, NEC, LGE, and others. An example of what many companies in the digital-signage value chain mean when they say "digital signage" is the fully functional – and revenue-producing – installation at JFK airport (Fig. 2). This initiative was a collaborative effort among many players, but most notably Samsung, with its commercial-grade 70-in. LCD panels and leading OOH advertising company JCDecaux. The 40–70-in. displays not only provide a glimpse of what all airport and mall concourse signage might look like in the future, but also represent a real-life demonstration of digital signage in action. The messaging on the screens can be controlled dynamically, thus allowing JCDecaux to quickly alter a message for its advertisers, split up the messaging on the screens by time of day (called day-parting), and even tap into emergency alert systems.

Year: 2000 Largest "Glass" size = 4G and smaller Monitors and  Notebook  Screens	Year: 2004 Largest "Glass" size = 6G Monitors and Larger TVs (and Public Displays)	Year: 2006 Largest "Glass" size = 7G Larger TVs and Digital Signage / Public  Displays	Year: 2010 Largest "Glass" size = 10G Larger TVs and Digital Signage / Public  Displays
Optimal Sizes: 6-Up 17'' 9-Up 12''	Optimal Sizes: 8-Up 32'' 25-Up 17'' 6-Up 37''	Optimal Sizes: 8-Up 40'' 25-Up 19''	Optimal Sizes: 15-Up 40" 6-Up 65"
In-Office In-Home Notebook 2000	In-Office In-Home LCD Monitor 2004	In-Home Notebook FPD TV 2006	Out-of-Home FPD Digital Sign 2009–2015

Fig. 1: Out-of-home signage is a logical next step in LCD evolution from a production standpoint. Source: DisplaySearch and Corning Incorporated.

The industry is also beginning to examine the OOH market beyond indoor applications and is looking outdoors, even for smaller-sized applications (compared to large LED-based billboard-type displays). Mainstream technologies such as TFT-LCD and PDP have not been considered optimal for outdoor usage due to their limited sunlight readability and sensitivity to harsh environments. However, as ruggedization improves, flat-panel manufacturers are now looking at applications including bus shelters, outdoor train platforms, or city-centric way-finding or advertising on street furniture (Fig. 3). Successful deployments of super-large-scale LED billboards can be seen throughout many major metropolitan areas across the globe, but replacements for the 65–85-in. 4–6-sheet printed poster boards used for bus shelters have been difficult to match in an electronic format that works well outdoors using flat panels. The aforementioned advances in ruggedization, as well as seamless tiling of these displays, may soon make these transitions to digital formats easier and more affordable.

Growth of the Large-Format Commercial Display Market

The large-format commercial display market (consisting of 26+-in. LCD and PDP products used in commercial applications) is one of the fastest-growing segments in the display industry. Just the display segment of this market is forecast to grow at a 24% compound annual growth rate (CAGR) from 2007 to 2015 and to exceed 7 billion in unit volume shipments by 2015 (Fig. 4). But this growth will not be without challenges.

The OOH Advertising Market

Much has been learned over the years in trying to reach the low-hanging fruit of digital signage – replacing Mylar poster boards in airports and malls with FPDs, for example. This segment of the OOH advertising market is dominated by large advertising companies not generally known to the FPD industry, such as Clear Channel Malls, Clear Channel Outdoor, Clear Channel Airports, CBS Outdoor, JCDecaux, and Titan Worldwide, which have all been in the OOH advertising business for decades. A close look at advertisements on the walls of any airport or mall will generally reveal the "owners" of these advertising spaces. Most of these companies have 10-year contracts on the space and make money out of selling it to their client base (typically through advertising agencies).

Fig. 2: This signage installation at JFK Airport was created by out-of-home advertising company JCDecaux and uses 40–70-in. LCDs from Samsung. Picture property of JCDecaux.

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Even if these companies are tempted to "go digital," the investment required to replace printed posters with flat-panel displays is massive, even with FPD prices falling. Arguments abound as to how much more these companies can make by "time slicing" their ads so that they can, for example, sell three ads on one display within a day rather than just one a week (for example, an ad for coffee in the morning, a snack at lunch time, and a dinner special in the evening). Advertising companies all have some sort of digital-signage initiative and even refer to the market as the Digital-Out-of-Home (DOOH) market. Many look favorably toward existing display technologies, especially "commercial grade" products, which are customized for harsh environments and 24 x 7 usage, but still are not convinced of the ROI involved in swapping out printed posters with digital signs. The advertising world has also not escaped the impact of the global recession, thus making it even more difficult for such companies to make the investment to go all-digital.

Fig. 4: The worldwide large-format commercial flat-panel-display market is forecast to grow aggressively over the next 5 years. Source: DisplaySearch Q4 '09 Quarterly FPD Public Display Shipment and Forecast Report.

A further challenge for DOOH is the lack of standards and interoperability. Up until now, the digital-signage market has been the "wild west," with many companies, both big and small (but mostly small) putting up their own type of installation. If they want to attract advertisers to their network, then they need to make all advertisers aware of the existence of their network and its audience reach, in terms that the advertising community can understand. Traditional media such as radio, TV, newsprint, and magazines all have established and audited metrics for pricing and measuring audience awareness typically classified by cost-per-thousand (CPM) (not million) viewers. Such metrics are just now being defined by various digital-signage trade organizations, but have yet to become widely accepted. With so many different digital advertising networks available, certain companies have become key data aggregators, which advertising agencies can leverage to find similar DOOH installations without having to contract with each one. Forward-thinking display companies such as NEC have also launched initiatives that allow for open platforms for one network to talk to another, thus eliminating the infrastructure barrier.

Information Portals

Digital signage is often associated with digital advertising, but other applications such as multi-use displays for mass transit, emergency-response boards, general-information points on college campuses, and electronic menu boards may offer even more growth potential in the near term, as digital-signage advertising models continue to develop. New opportunities could arise through the American Recovery and Reinvestment Act, which allotted an estimated $8.4 billion to the Department of Transportation; it is likely that a significant portion of this will be spent on IT, including electronic public displays/digital signage. In addition, the need for consumers to reduce fuel consumption and pollution means more people are leveraging mass-transit alternatives in metro areas. There are many projects with FPDs in public places on the drawing board, with proposed uses including advertising, train schedules, and homeland security in locales such as subways/train stations, ferries, or bus stops. In total, the use of digital displays in out-of-home markets, whether for information or for advertising, is on the rise worldwide. •