Digital signage market grows, presents new channel opportunities to VARs

Like other traditional forms of communication, signage is evolving. More and more we see retailers, corporate offices, entertainment venues and universities trading in their static content for real-time, digital displays. Just as we’ve seen with mobility over the past few years, digital signage is on the cusp of becoming a multi-billion dollar industry, presenting opportunities for advertisers, solution providers, and especially VARs in a way it never has before. A recent study conducted by ABI Research suggests that the global market for digital signage – which, beyond the displays themselves, accounts for associated installation/maintenance efforts, content management systems, and software applications – will grow from approximately $1.3 billion in 2010 to $4.5 billion in 2016.

As the market expands, implementation costs are declining. As such, more advertisers, particularly within vertical markets, are evaluating digital signage as a more engaging and effective way of boost marketing efforts and attracting new customers.

Digital signage as more than, well, signs:

As the industry advances, so, of course, does the technology. With the rise of solutions such as Intel’s Audience Impression Metric (AIM) suite, for instance, digital displays can now register a spectator’s gender and age bracket to deploy a targeted message on-the-fly. The suite can also gauge how long a consumer views a display, allowing advertisers to more accurately evaluate its "wow" factor. Opportunities for recurring revenue are also being presented through digital displays. Platforms like Vukunet, for instance – which is a turnkey system built by NEC to facilitate collaboration between third-party vendors and digital display advertisers – link additional advertising dollars to digital signs. What’s more, Vukunet automates the running of ads across a given digital display network, reducing manual efforts and, perhaps more importantly, driving new profit for the advertiser.

The most noteworthy advancement within the market, however, is its recent expansion beyond the retail realm. Once viewed strictly as advertising outlets, digital displays are being leveraged more frequently to meet informational or educational needs.

"Digital signage, as an industry, is continuing to grow," said Mike Zmuda, director of solutions development for NEC Display Solutions of America. "But I think we have to pay attention to the fact that ’digital signage,’ as a term, is very ambiguous. You really need to look at is as having different sectors."

Many quick serve restaurants, Zmuda continued, now communicate nutritional values via digital displays, while airports, hospitals, and higher-education institutions are "going digital" with in-house directionals and maps.

A converging channel:

The digital signage channel is unique for a number of reasons. The two perhaps most significant are its mandate of a convergence between AV and IT resellers, and its lending of itself almost exclusively to VARs who can provide an all-encompassing digital display. Both are a result of the technology’s aggregated and multi-facet design.

The aggregation seen within the digital display market has led to a significant shift within the make-up of the channel. While first viewed as predominantly AV-centric, the digital display channel is opening its doors to IT resellers in a way it never has before, thanks, primarily, to rising customer needs within the content and software management space.

"The channel is quite interesting," said Gene Orstead, director of product marketing at ViewSonic, a digital display vendor. "There is still some level of channel convergence taking place between what used to be the pro-AV installer – which was a value-added reseller that knew how to handle large displays, handle the construction, and deliver HD video to large signs – and the IT sector. Now, half the equation of being able to deliver a digital signage solution is how to manage the content, deliver that content, and network that content. And these skills – networking and pushing content – lie in the IT group," Orstead explained.

Jumping on the opportunity:

In addition to blurring the lines between the AV and IT channels, the aggregated nature of the digital signage market bodes well with solution providers who can seize the opportunity to cater all-in-one digital signage solutions.

Todd Swank, VP of marketing at Nor-Tech, a systems integrator based in Burnsville, Minn., and an Intel authorized integrator and platinum partner, believes that the many technical components under the digital signage umbrella – ranging from software management, to AV, to networking – present VARs with an opportunity to ease end-user headaches by providing all-in-one digital offerings from a single source.

"It’s hard to just offer one element of digital signage," Swank said. "When customers are looking into it, they don’t want to buy hardware from one place, the installation from one place, and then the software from another. That’s a lot of people for the customer to talk to. They’d rather just have a solution provider provide all those elements in one, single package."

Bob Rosenberry, manager, visual solutions at HP, reiterated this all-in-one opportunity, as he’s seen IT resellers fare increasingly well within the digital display channel over the last six years.

"I’ve seen this industry evolve to be very channel-driven," Rosenberry told CRN. "Within digital signage you have the hardware, the software, the networking, the content, the physical installation... this big, extended team used to be needed to make this happen. And now, through the channel, this is becoming much more efficient and kind of 'every-day.' A lot of the software companies in the industry are pursuing channel strategies and seeing that as a key to growth."

The opportunity for IT resellers to take advantage of an aggregated market is no doubt there. But here’s the kicker: the many "moving pieces" behind digital signage could imply that, for VARs to be successful, they may need to step up their game.

Kevin Prewett, vice president of vendor management at Ingram Micro – a company that prides itself on creating sales opportunities for resellers – spoke to the learning curve many VARs encounter when warming up to digital display channel. "People see the screen and say 'that’s digital signage,' but there’s so much more on the back-end side," Prewett told CRN. "It’s really just so much more involved than that, and somebody just stepping into it, most of the time they realize that it’s a bit of an undertaking."

In response to this learning curve, many vendors, including Ingram Micro and NEC, offer turn-key digital signage solutions, coupled with training programs, to bring prospective resellers up-to-speed and help them better meet customer needs.

Betsy Larson, channel director at NEC, stressed the importance of reseller training programs within the digital display channel. "I’ve met so many resellers and solution providers through groups, and bootcamps, and digital signage summits. They’ve just been great, and that’s an easy first step," Larson said. "I’ve been in the industry for 15 years and it’s great to see the solution providers really catching on and seeing the value in learning how to put these solutions together."

The bottom line is, despite any looming challenges or "jack-of-all-trade" demands, the digital signage channel is brimming with opportunity. The fragmented landscape in which it sits almost demands a VAR's involvement to meet consumers' expectations and deliver that full, soup-to-nuts solution.

"I think there are more benefits than there are challenges," Larson said. "Many of the vertical markets right now are leveraging signage, and so many of the SMB VARs play into these different spaces, meaning there are a lot of opportunities within their customer base."

Words of wisdom to resellers? "Look in your current backyard," Larson said. "You might even have an opportunity there."