Digital Display/Signage

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According to the 2007 CRN Profitability Study, average gross margins for the segment are 18.1 percent, the sixth highest for the 13 areas studied. The average deal size was $14,900, while the category's services-to-product sales ratio remained steady at $2:$1.

"Getting a service/maintenance contract [is key]—and it's not just the hardware, it's the software, too," said Jill Miller, executive vice president at The Digital Signage Group, a Poulsbo, Wash.-based distributor, noting the "lion's share of our opportunities are sold through integrators."

"There are so many managed services we can provide for digital signage—that's where the bulk of the money comes in," said Rich Perry, sales director for the U.S. and Mexico at Mississauga, Ontario-based BTV+.

The survey found the median sales cycle for digital signage was three months. Yet many solution providers experience something different anecdotally and report that they see cycles of 12 months or more.

Contributing to this lengthy time frame is what many resellers cite as the biggest challenge in implementing digital signage: getting the new customer to trust, understand and then transition to this burgeoning technology and form of advertising.

"The retail sector ... they're not used to advertising in the store," Perry said. "I think the overall part, because digital signage involves so many departments within an enterprise—it involves IT, merchandising, finance, a few others probably—getting everyone on the same boat is a time-consuming process. Not that it doesn't happen, it just takes longer."

Miller agrees and acknowledges an average sales cycle of more than eight months. "It really depends on what the [reseller] is going after," she said, adding that some retailers have the tendency to go direct with manufacturers but if they don't, the implementations generally take longer.

Next: Profitability numbers for digital display/signage

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