CALCULATE

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SUCCESS

DETERMININ

G THE ROI OF DIG

ITAL S

IGNAGE

CHALLENGES:The need for measurable success in competitive economic environments is rapidly increasing.

The goals of digital signage cannot always be tested and measured monetarily.

A lack of understanding between ROI (Return on Investment) and ROO (Return on Objective).

Clear goals must be created before implementation to avoid challenges when determining ROI and ROO.

KEY TAKEAWAYS:The most important factor in calculating the success of your digital signage campaign is proper planning.

When calculating the ROI and ROO of digital signage, TCO (total cost of ownership) must be determined and factored in.

1 INTRODUCTION 32 THE BASICS 53 RETURN ON INVESTMENT 94 RETURN ON OBJECTIVE 135 CONCLUSION 16

CONTENTS

IntroductionThe utilization of digital signage as a form of marketing can be traced all the way back to 1928 with the world-famous “zipper” in Times Square. It was not until the 1980s that companies would begin making use of video monitors and VHS tapes to display retail advertisements. Since then, the popularity of this form of signage has grown exponentially, transcending the retail environment to find widespread use across all markets, from healthcare to consumer financial services. The reasons for this adoption range from advancements in technology that make implementation of a digital signage campaign more easily accessible to the ever-decreasing cost of displays and players. However, the driving force behind this sustained, substantial growth in utilization is clear: ROI (Return on Investment) and ROO (Return on Objective).

The bottom line is this — digital signage works. David Bawarsky, an authority in the digital signage and technology community, may have said it best when he wrote, “Consider this statistic: 80 percent of U.S. residents aged 12 or older have seen a digital video display in a public venue in the past month; 62 percent recall seeing one in the past week. And nearly one in five (19 percent) said they made an unplanned purchase after seeing an item featured on the screen. What would one in five unplanned purchases do for your business?”

Some recent reports even claim the statistic of impulse buying after engaging with a digital display has risen to as much as 33%.

With the ability to increase engagement, reach, influence, and sales, it’s no surprise that while the average ROI of other forms of media has remained stagnant or dipped over the last four years, that of digital signage has only increased. Simultaneously, the need for measurable success in competitive economic environments has also grown at an impressive rate. With the advancements in technology that allow companies to track all manner of metrics, the proof of ROI and ROO has become more than simply a requirement, but an expectation.

While many experts admit that finding the optimal metrics by which to determine ROI and ROO for digital signage is challenging, Allen and Jonathan Brawn of Brawn Consulting state, “The majority of failures for those entering the dynamic digital signage industry can be directly traced to a lack of planning and due diligence up front.”

Understanding the methodology behind calculating ROI and ROO for digital signage prior to engaging in the planning phases of the campaign ensures a clear path to measurable success, one which avoids the many pitfalls of improper planning.

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 1. INTRODUCTION

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The Importance of Calculating Returns For any company, large or small, understanding the impacts of business investments is essential to creating a profitable, stable, and enduring model. One of the ways in which companies do this is by calculating ROI or ROO. By studying the profitability of an expense, in this case digital signage, businesses are able to measure their success over time.

For large companies, determining the ROI of a digital signage campaign is invaluable for optimizing processes, facilitating growth, and guiding future decisions. Here, the success of the campaign may not be directly related to profitability. Instead, the campaign may be deemed a success simply by providing the answer to a question. In this case, that question would be, “Is digital signage a useful and profitable tool for our company?” However, for smaller

companies, the initial investment in digital signage can carry additional weight. It’s estimated that the average cost of a digital signage campaign ranges from hundreds to thousands of dollars, depending on the complexity of the project. For companies like startups, small chains, or locally owned businesses, this can be a significant investment, one which may be the key to success or failure. Without the safety net of a large company’s budget, the proof of ROI or ROO, and the success of the campaign, becomes exceedingly important for these businesses.

To begin the process of determining whether digital signage is lucrative in the long run, it’s first important for a company to understand their goals — what they hope to gain from the investment. This will determine whether they should be measuring ROI or ROO, which will greatly affect the methods by which they study and test the various metrics.

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 2. THE BASICS

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Return on Investment vs. Return on ObjectiveFor many digital signage campaigns, especially in the retail and telecom markets, the primary goal is to increase sales, whether in quantity or quality. The basic method for determining whether this type of campaign is profitable is to compare sales prior to the launch of the campaign and after. Then, a company would subtract the total cost of their digital signage from the increase in profits, factor in all time savings, reduced costs of other types of marketing, and any variations in operation costs, and that would represent the ROI. While there are many factors to consider, such as customer satisfaction and social media engagement, the primary form of measurement for these types of campaigns is quantitative data.

However, for many other markets, the returns of implementing digital signage may not directly translate to dollars and cents. For instance, in the education, health care, and industrial sectors, digital signage campaigns may be implemented for the purposes of educating viewers, sharing company news, directing foot traffic, or providing updates to policies. For these types of campaigns, there is no direct link between the money invested and the return. Instead, companies will have to rely on qualitative data by measuring visitor or employee satisfaction, education, social media engagement, and variations in interaction. This is called ROO, or return on objective.

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 2. THE BASICS

Step 1: Define Your GoalsTo determine which measurement of success is right for a company, the first step always begins by defining the goals of the digital signage campaign. What does the company hope to gain from this implementation? The answer to that question will help guide the business’ team in creating clear forms of measurement for either ROI, ROO, or some combination of both. It’s important to remember that the goals of a campaign do not have to, and in many cases should not, be purely quantitative or qualitative.

If the primary goal of a digital signage campaign is to increase sales, one of the measurements for determining success may still include customer

engagement and satisfaction, both qualitative in nature. Even if the goal is to increase profits, it’s important to have created ways to measure these types of factors in order to understand how the increase happened in the first place.

Determining the goals of a campaign is the single most important step in the process of calculating ROI or ROO. This is when a company’s team will select indicators of success, create strategies for measuring the metrics, and lay out a clear timeline for acquiring data, compiling the evidence, and reaching a conclusion.

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CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 2. THE BASICS

Return on Investment Sales Data

Prior to launching a digital signage campaign, a company must create a robust plan for measuring the various metrics needs to determine ROI. The following are some of the actions a team will need to take in order to paint a clear picture of their returns after the campaign has launched. These types of questions and actions can be used as a starting point for creating strategies on how to locate, compile, and capture the necessary information.

• Study historical sales data. After the implementation of the digital signage, what changes occurred? If there were changes, it’s important to take into account all factors that may have played a role in the shifts. This helps companies understand exactly how much of an effect the digital signage had, and it begins to reveal the quantitative results of the campaign.

• Don’t simply focus on the total profits for each period of time. It’s important to analyze changes in the quality of transactions. Did the way in which people spend shift? Study the variations in which products were purchased. Did the quantity, quality, or price of the items increase after digital signage?

• Examine the amount of time customers spent in store. Did they interact with or watch the digital signage? Try to compare data on how often customers returned, if that data exists. Was there a significant increase or decrease since digital signage implementation? Determine if there is or was a direct a link between time spent in store and the amount of sales.

Study historical sales data. After the implementation of the digital signage, what changes occurred? If there were changes, it’s important to take into account all factors that may have played a role in the shifts. ”

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CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 3. RETURN ON INVESTMENT

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Savings DataAfter compiling historical sales information, acquiring post-launch sales data, and comparing the two to determine the increase in profits, a company must also determine how much their campaign is saving them.

In other words, any amount of money saved due to digital signage can viewed as profit. These two figures will be combined to compare against the cost of the campaign itself to determine ROI.

Digital signage can have a significant effect on the amount spent on other forms of marketing, such as direct mail pieces, flyers, brochures, posters, out of home, etc. It’s important to take this into account when determining the profitability of a campaign. Compare the costs of these types of marketing before and after implementation. There are a few factors to keep in mind when creating this figure, such as:

• Which types of marketing witnessed a change in quantity?

• Which types of marketing became obsolete altogether?

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• How much was saved on shipping costs?

• Digital signage will likely negate a portion of the time employees typically spend explaining sales to customers. With more time available to push sales or offer assistance, how does this translate to dollars earned?

• Has digital signage impacted your social media presence? If so, has it affected how much is being spent on social?

Determining SuccessOnce a company is equipped with data that indicates profit, they can compare this information to the TIC, or Total Investment Cost, of the digital signage campaign. The TIC will consist of a variety of expenses, including monitors, player hardware and software, display mounts, management software and tech support, installation, project management, and content creation. After combining these factors and determining TIC, a company can compare the difference between it and profitability to reveal their ROI.

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 3. RETURN ON INVESTMENT

Return on Objective Asking the Right Questions

For companies that wish to implement digital signage for reasons other than the direct increase of sales, determining their returns can be significantly more challenging. The first step that a company must take is to decide precisely what qualitative goals they wish to achieve. The following is a list of possible questions a company may ask to determine the success of their campaign:

• Are there higher levels of staff engagement?

• Do employees report higher levels of satisfaction?

• Are employees better educated about events, changes in policy, etc.?

• Is there an increase in social media engagement and reach?

• Is there an increase in communication between staff members?

• Is efficiency increased?

• Is there an increase in responses to opportunities, both for internal and external individuals?

Satisfaction Efficiency Communication

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 4. RETURN ON OBJECTIVE

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Finding the Answers

Since there will be few direct figures, such as profits, to assist in determining the answers to these questions, a company must plan alternative ways to acquire data. As with many types of qualitative research, it is paramount that a baseline be set prior to the implementation of the campaign. Once a baseline is formed, a company can then create percentage-based figures representing the changes after the campaign’s launch. Below are some of the most common methods for acquiring qualitative data for digital signage:

• Distribute employee surveys

• Observe changes in communication/interaction

• Facilitate focus groups

• Create a landing page that is ringfenced to test engagement and reach

Determining Success The first step in analyzing the effectiveness of a digital signage campaign is to determine whether the goals laid out in the beginning of the project were met. This will be the primary factor in measuring success. Once it has been determined that the goals were met, a company will compare their qualitative data to their TIC.

However, it is vital that companies consider any changes that may have affected the TIC in order to

paint the clearest possible picture of their success. Though sales may not have been the primary purpose of the campaign, if there was a noticeable increase in profits after implementation, this should be subtracted from the TIC before comparing the number to the qualitative data. In much the same way, it is important to determine any changes in marketing expenses, operational costs, etc.

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CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 4. RETURN ON OBJECTIVE

Conclusion Determining the ROI or ROO of a digital signage campaign can be a complex process. For ROI, there are a substantial number of factors that come into play when attempting to determine the return with great accuracy. For ROO, due to the qualitative nature of the returns, determining whether the campaign was worth the investment can be a serious challenge.

However, when the goals of the campaign are clearly defined and the steps for measuring those goals are clearly laid out prior to implementation, the results can be invaluable. It’s important to remember that ROI and ROO are not mutually exclusive. In many cases, it is important for companies to determine both sides, quantitative and qualitative, simultaneously.

This is where precise and careful planning comes into play. Prior to all other steps of the implementation process, companies must first determine exactly what they are hoping to achieve through digital signage and how they will measure that success. While the content that will appear on the screen is immensely important, the process of defining its success is equally so.

For companies that wish to go down the path of digital signage, they must set precise goals, develop strategies for acquiring ROI- and ROO-specific data, and fully understand the TIC of their campaign. Only then will a company truly understand the value that digital signage can hold for them.

CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 5. CONCLUSION

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• http://www.blmtechnology.com/wp-content/uploads/2017/06/Digital-Signage-BLM-Technolgies.pdf

• https://screen.cloud/ideas/innovation/exciting-digital-signage-trends-and-statistics

• http://mvixdigitalsignage.com/blog/digital-signage-statistics-infographic/

• https://www.avisystems.com/blog/how-to-measure-the-roi-of-your-digital-signage-strategies/

• http://www.ingrammicroadvisor.com/proav/four-ways-to-measure-interactive-digital-signage-roi

• https://screen.cloud/ideas/ideas/return-on-objectives-digital-signage

• https://www.commercialintegrator.com/digital_signage/digital_signage_hardware/5-ways-to-prove-roi-of-dig-ital-signage/

• https://www.digitalsignageconnection.com/the-history-and-evolution-of-retail-digital-signage

• http://www.sixteen-nine.net/2016/01/27/18-surprising-statistics-about-digital-signage/

• https://www.dialogtech.com/expertise/infographic/the-challenges-of-marketing-roi

Brawn, Alan C. Brawn, Jonathan. Metrics and Analytics for ROI in Digital Signage. Brawn Consulting. PowerPoint. 1w0.3.2013.

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CALCULATE YOUR SUCCESS: DETERMINING THE ROI OF DIGITAL SIGNAGE 5. CONCLUSION

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