Show me the money Digital Signage!

Friday, December 17th, 2010 at 4:15 pm by DigitalSignageBlog, 0 Comments »

I have been asked this question quite a number of times and thought I’d give my opinion on which areas you can make money in the digital signage industry. I have broken this up into the following areas:

Selling Hardware/Software

I believe this is an area that the majority of the IT and AV companies are getting into which has now become over saturated and too competitive. With the growing number of digital signage manufacturers and developers, choosing the right solution is also now becoming more difficult. There are too many options available on the market. Each system has it’s own features and issues so choosing the most suitable solution has now become more difficult. I don’t believe there is a one size fits all solution on the market and please don’t try to convince me. I’ve seen and tested quite a number of products, both hardware and software packages and they seem to be either too limited in it’s capabilities or too comprehensive which equates to being too expensive. If you’re starting a business in the digital signage industry, selling hardware and software packages is not where the bulk of the money is unless you started at the early stages of the digital signage boom, or if you became a distributor of a well know digital signage company in your country. I don’t believe resellers make a lot of money just by selling another company’s equipment or software.

Now if you’re thinking of developing your own player then that’s worse. You’re going to struggle selling and and penetrating the market unless your solution is innovative and different from the others.

Maintenance

This is an area or service you would generally offer to clients who are purchasing hardware and software. The only drama is that a large percentage of clients do not think or budget for this particular service. It’s pretty much like selling life insurance to someone who doesn’t want it so if you have a good sales pitch and provide your client with this service then you may be able to earn some yearly revenue. The only catch is to make sure your hardware is reliable so that you don’t have to spend the time, money and resources to replace failed equipment. If its software, you may be able to charge an additional fee for upgrades and maintaining patches etc. I don’t believe there’s much money to earn from this aspect of the digital signage business.

Installations

This involves anything from installing the screen, digital signage player, configuring the software, network, cabling etc. These are one off costs and generally its for paying the labour costs – either charged per hour or per screen. So if your an installer you can make a bit of money from this but it’s not where the big $$$ are.

Content

There’s no point in installing a digital signage system if there’s no content. The saying “Content is KING” can be misinterpreted but in in the digital signage world content is important. There are different types of content e.g video, images, text, RSS feeds, MRSS feeds, news, TV and if you’re a designer, content producer or provider you can make quite a bit of money especially when content needs to be refreshed on a daily or weekly basis.

Advertising Network

I strongly believe this is where the “secret treasure chest” is. Simply put, an advertising network is a collection of screens and an operator manages the contents on all of these screens. I know most advertising networks struggle in the first few years to make a reasonable profit but once they expand their screen and viewer coverage then they will be able to make a considerable amount of money. Advertisers are always looking at ways of marketing their new products and services and digital out of home advertising is an area that most advertisers are looking at spending their marketing dollars.

Building a advertising network can become costly at first (the operator covers the costs of all of the above areas) but the ROI is high if done well. It will be the most difficult and the most challenging but at the same time it will be the most rewarding.

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