Downturn Drives Upswing in Low-cost, Hosted Digital Signage

Last fall, two months before Christmas, Eric Kanagy loaned one of his company's 19in. digital signs to a small retailer nearby. Kanagy, CEO of RedPost in Goshen, Ind., didn't expect to sell the sign 2/10/2009 7:00 AM Eastern

Downturn Drives Upswing in Low-cost, Hosted Digital Signage

Feb 10, 2009 12:00 PM, By John W. DeWitt

A low-cost RedPost digital sign in the diagnostic waiting room of a small, nonprofit hospital facility announces upcoming events, fundraisers, and health information.

Last fall, two months before Christmas, Eric Kanagy loaned one of his company's 19in. digital signs to a small retailer nearby. Kanagy, CEO of RedPost in Goshen, Ind., didn't expect to sell the sign. But after two months of consistently selling out products that were advertised on the sign, the retailer opted to buy the RedPost sign and subscribe to the company's web-based signage platform. The total one-year cost for the solution: $800, which included $699 for RedPost's LCD sign with integrated player and about $100 for a year's use of the hosted application.

"This is a very small-scale example, but this story is indicative of the value of signage even at that small store level," Kanagy says. "It's all about selling more. With digital signage, people are looking for higher-value technologies to invest in because their funds are so limited."

Makers of low-cost digital signage, such as RedPost and Seattle-based AdvancedMethod, are convinced that the economy's downturn will foster an upswing in sales of their digital signage offerings. The low investment required for basic web-based (or SaaS—software as a service) hosted digital signage solutions makes them particularly appealing to smaller AV integrators who want to expand their offerings and grab incremental sales, and for small- and mid-sized business (SMB) end users looking for high-impact marketing solutions.

"The downturn is forcing people to recognize what we've been saying for years: This technology is worth more and provides an instant return on your investment," Kanagy explains. "There's a real opportunity for those of us at the lower end of the scale to prove the value of what digital signage offers."

A challenging economy provides a great opportunity for SMBs to invest in low-cost digital signage, agrees Robert Grawet, general manager of AdvancedMethod. "As the professor said in my first marketing class, when times are tough, that's the best time to grab market share," he says. "Those who are going to survive are those who have added some edge to their offering. Digital signage can be part of that edge."

AdvancedMethod sells its plug-and-play signage player for an MSRP of $1,495, plus $69 a month or $699 annually to subscribe to the web-based service. Grawet cites several benefits that make signage more compelling for SMBs than other marketing and technology investments:

  1. Look professional. "It gives the small business the opportunity to look like a big guy by doing professional signage rather than a hand-written sign on a box," he says. Even a novice can look like a pro using one of the 250 signage templates that AdvancedMethod provides as part of its solution.

  2. Respond immediately. "Signage offers the opportunity to seize the moment," Grawet explains. "If your deli gets a deal on ham, then you put ham sandwiches on sale today. You can respond instantly to market conditions and take advantage of every opportunity when it arises."

  3. Communicate consistently. Even though they are low-cost solutions, both RedPost and AdvancedMethod support multisign, multilocation signage networks, which provided an efficient promotions and public communications platform for smaller businesses with several locations. "It ensures you have continuity and uniformity in messaging across multiple stores," Grawet says.

  4. Personalize. Digital signage simplifies the process of personalizing messages for a particular venue or customer. For example, "That personal welcome to customers can be a way to strengthen loyalty that you need to survive in this economy," he says.

Downturn Drives Upswing in Low-cost, Hosted Digital Signage

Feb 10, 2009 12:00 PM, By John W. DeWitt

Outside of the retail setting, Kanagy believes that digital signage also will make inroads as a powerful tool for healthcare providers, educational institutions, and other organizations that need an effective solution for visual (and audio) promotions and public communications. For instance, RedPost is completing development of a retirement center signage application that allows residents and staff to submit announcements and provides audio functionality to reach audiences with poor eyesight. Another RedPost application, deployed by a nonprofit community health center, promotes dental hygiene and other healthy practices for underprivileged children.

The opportunity to pursue digital signage installations in the SMB market is attracting other, larger makers of SaaS-based digital signage. For example, Montreal-based BroadSign and Etobicoke, Ont.-based Rise Vision are packaging their offering and signing deals to allow their integrator and value-added reseller (VAR) channels to pursue smaller businesses.

BroadSign just announced a deal with Ingram Micro to provide digital signage kits for resellers "who want to sell and in many cases install digital signage solutions, but just don't have the expertise or resources in house," said Kevin Prewett, digital signage division vice president of Santa Ana, Calif.-based Ingram Micro U.S. Prewett emphasizes that "we're offering our channel partners another lucrative, commission-based revenue stream that can be easily incorporated into their existing solutions portfolio and sold to a variety of businesses of all sizes."

In late January, Rise Vision added its fourth distributor, Tech Data Corporation, which will distribute the Rise Display Network to its VAR customers via its Digital Signage and Projectors Specialized Business Unit. According to Ryan Cahoy, Rise Vision managing director, "our software-as-a-service platform will help them reach the small- and medium-sized companies that are so important to their business."

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