Digital Signage Expo Opens Amidst Cautiously Bullish Expectations

The Digital Signage Expo begins Tuesday, Feb. 24, in Las Vegas with a backdrop of bleak economic news, but Chicago-based analyst Chris Connery remains quite bullish on the category. Digital Signage U 2/24/2009 7:00 AM Eastern

Digital Signage Expo Opens Amidst Cautiously Bullish Expectations

Feb 24, 2009 12:00 PM, By John W. DeWitt

The Digital Signage Expo opens Tuesday, Feb. 24, in Las Vegas amidst optimism for continued growth in the digital signage marketplace.

The Digital Signage Expo begins Tuesday, Feb. 24, in Las Vegas with a backdrop of bleak economic news, but Chicago-based analyst Chris Connery remains "quite bullish on the category." Digital Signage Update caught up with Connery, vice president for PC and large-format commercial displays at DisplaySearch, as he was packing for the Feb. 24 to 26 show. Though positive about the category's prospects for 2009 and 2010—Connery cites transportation, quick-service restaurants, and higher education as growth areas—he warns integrators not to be complacent about their installation pipeline. Even if you're doing well now, it often reflects deals closed in previous years. To keep business growing, he says, signage integrators should cross-train staff on both AV and IT technologies and become more comfortable with leading IT vendors who are making major pushes into the market.

SVC: What's the state of the digital signage market going into this week's show?

Connery: I would say we're still quite bullish on the category. We still see growth in areas such as quick-service restaurants and public transportation. Also, higher education is an area where we're seeing some new activity.

A leading indicator we look for are new project starts, but maybe I should offer a little bit of a cautionary tale for your readers. Though our market forecasts look good for 2009 and 2010, a lot of those decisions were made in 2007 and 2008, before the economic crisis we're in right now. That's why I'm headed to the show. I'm really interested in getting my finger on the pulse of new projects in the pipeline.

What are you hearing about project starts and new deals right now?

I've heard that there's a little bit of a slowdown. Business is going well, but refilling the new business pipeline has become a little of a challenge, at least in the first quarter of this year. What people are trying to differentiate is whether this slowdown reflects typical seasonality—Q1 is normally a slower time—or is it the multiplier effect of slowdown in the economy?

What about the growing interest in digital signage from leading technology companies?

There are some good signs for the future. Heavyweights such as Cisco Systems are pushing further in the marketplace; the company introduced a couple of Cisco-branded flatpanel displays. Readers of Sound & Video Contractor might be interested in getting a complete solution from an 800lb. gorilla like Cisco. I also anticipate other very big names getting into the market very soon. Keep your eyes peeled for announcements coming out soon. These bigger companies are now paying more attention to signage. This is good for signage integrators. These vendors can help them put together a complete solution.

What other advice can you offer for digital signage integrators looking to grow their businesses in the current economy?

A decade or two ago, IT and AV used to be very distinct markets—they lived in their own worlds. They now have converged, especially in this digital signage space. So folks who've been more video-focused in the past definitely should be more open to IT. If Cisco scares them, it shouldn't. Contractors from the IT world are familiar with them for many types of products. In order to be a complete solution provider for digital signage, the IT component has to be a strong component. So training your resources and making sure they are educated on the IT side is a really strong thing for you to be doing.

This market may also cause AV-focused integrators to look beyond their current suppliers. If you're a small contractor, you've probably worked with the same distributor to get your video products. You should also be familiar with the IT distributors and cross-train your folks on their products.

What advice do you have for end users of digital signage networks?

One of the good things about digital signage is that every project is unique. It's also one of the bad things. What a retailer wants is not what Michigan State University would want. So I tend to advise folks to seek out what others in similar positions have done and make sure their contractor knows everything you want to tie together in your signage network.

What do you mean by tying together?

For example, a higher-education campus will want to tie in alert networks so if there's an unfortunate event on campus, they are able to immediately to broadcast that alert as well as making sure kids know what movie is playing in the common area on Friday. So they need to have that alert system built into their signage network.

This is entirely different from what a retailer would look at. Nobody knows their customer set better than that retailer, but the value that the contractor can add is telling the retailer how they can attract those eyeballs better or attract customers at different parts of the day.

What should retailers be considering in this economy? For instance, should they look at using digital signage for employee communications?

Many users of signage networks repurpose signage for training, employee communications, and other applications. It comes down to cost-justification for the end user and what they envision doing with the network. Some of them don't see it beyond replacing static point-of-purchase posters, while others think beyond that to leverage it for companywide communications, after-hours training, etc.

One go-to market strategy that some are taking with digital signage is to show ads for products that aren't even available in the retail establishment. This is a way to generate an additional revenue stream and go beyond using signage just as an in-store promotions vehicle.

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