A Look at the Costs of Digital Signage Networks and Content
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A Look at the Costs of Digital Signage Networks and Content

Find out how to get a handle on the costs associated with deploying a digital signage network to make sure you consider known obstacles to prevent you from being caught on the wrong side of the budget curve.

By Bill Gerba, CEO, Wirespring Technologies

Ever since I wrote the first type of article on budgeting for a digital signage deployment back in 2004, I've gotten calls from all sorts of companies asking why we picked price "X" or why we didn't include service or feature "Y."

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  • After updating the digital signage budget again in 2006, we took some flack from people who suggested that our estimate was too low, while others thought it was too high. Sigh ... there's just no pleasing some people. But here we are a year later, so I think it is prudent to update our estimates to account for some of the new industry developments.

    Now, what's the cost for a typical 100-screen digital signage installation?

    First of all, I'm not going to redefine what digital signage hardware, software, installation and maintenance mean, since most are familiar with the common terms listed here. Before we get into any business-model specifics or try to estimate the content cost, I wanted to give you a ballpark price based on a mid-2008 cost basis for our budget this time around:

    Cost of a Digital Sign for Three Years
    40-inch LCD screen $1,500
    Player hardware $1,200
    Display mount $250
    Player software $500
    Management software & tech support $1,800
    Installation $1,200
    Initial project management $300
    Total $6,750

    Based on these numbers, the cost of deploying a 100-unit digital signage network has dropped a significant 18 percent since 2006, mostly because of dramatic price reductions in LCDs. Our $1,500 price point for a 40-inch LCD assumes that you'll eschew the largely unnecessary 1080p resolution in favor of much less expensive 1360-by-768 screens, and purchase the three-year extended warranty for a few hundred bucks (it's a wise investment, and probably a necessary one if you're leasing your kit from a third party).

    While we still recommend professional displays for a lot of deployments, even consumer-grade screens have seen significant improvements, and a lot of customers opt to use them instead. We also adjusted the digital signage media player down $300 to $1,200. Computers keep getting faster, and more manufacturers are experimenting with low power and small-form factor designs that can be readily adapted for out-of-home use, so we can reap some benefits from those trends.

    Finally, we dropped the installation price by $200, not because ceiling-dropped installations have gotten cheaper, but because we're seeing a much wider range of mounting options on the market. Additionally, less expensive end-cap, pole-mount, wall-mount and floor-standing displays are getting more popular as people test new business models and deploy to different kinds of venues.

    The prices for service components like technical support and project planning have remained relatively static. Just as it was in 2006, we continue to find larger companies prefer to handle first-level technical support in-house if they already have a service desk in place. If your project needs outsourced first-level support, a three-year service contract for 24/7 support will probably set you back an additional $2,000 to $4,000 per screen, depending on the type of service being provided.

    I've left the project management cost unchanged at $300 per screen, although we now have more capable service organizations that can offer less expensive options. We've also found a fair number of companies prefer to utilize their own in-house project management teams to handle the logistics of deployment and installation.

    Content Considerations
    Content is the single largest unknown cost in a digital signage project, and I'm astounded by the number of companies that never figure it into their deployment cost. The thought that somebody else - your venue, advertisers, a local TV station - is going to provide you with usable content for your screens is dangerously nave, and frequently budget-busting.

    At the same time, though, I could interview 1,000 agencies and network owners and write a bookshelf full of material on the topic - and still not accurately estimate how much content is the right amount, where it's going to come from or what it will cost to produce. But here are a couple of trends that I've noticed over the past 18 to 24 months. Take them with the knowledge they may not fit your exact situation, but serve as a useful starting place when examining your budget.

    Static content can be extremely effective, and it's some of the least expensive content to produce. Estimate a minimum of eight hours for each new screen, which will likely cost somewhere from $250 to $1,000. If your software supports them, consider using dynamic templates so you can make adjustments and even reuse the same creative collateral for several products or announcements.

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    Animation can be eye-catching and powerful, but it also can be distracting. For text-heavy segments, use animation sparingly to draw attention to key elements. A simple Flash animation will take a skilled designer anywhere from a day to a week or more, so budget a minimum of $2,500 for every piece that needs to be created from scratch.

    Again, use templated areas when possible to get extra use out of your animated assets, and consider purchasing a template and animated effects library to cut down on production times and costs. Even brand-centric animations can take advantage of this, since it can be less time consuming to take a template and customize it for a particular brand or message than it would be to start from scratch.

    Talking heads are attractive, but they don't always work on digital signs. Humans put a lot of cognitive effort into processing facial expressions that might be wasted for a short advertisement or information clip. What's more, talking-head videos often rely on audio to deliver the real message, which is still taboo in some deployments.

    But if you're planning to use a spokesperson or talking head in your spots, count on a minimum of $250 per finished second of content when making your budget. The real number could easily be much higher, depending on your production techniques and the actor or spokesperson you hire, but $250 per second is a good place to start.

    Full-motion video can be spectacular, but expensive. Use it when appropriate for added visual appeal, but don't count on it to be more effective at selling a product in-store than a more elegant and simple animation would be. Good video designers will know when it's appropriate to use stock art and footage. When it comes to shooting new video on-location, $1,000 per finished second is a low-end starting point for your budget.

    Video can have other shortcomings. One particular caveat with doing lots of flashy full-motion video sequences is that they're frequently impossible to template and reuse - because the individual shots are subject-matter specific. Thus, you might wind up producing a larger quantity of unique spots, further driving up the budget.

    Figure out the number of spots you'll need to produce or acquire before settling on a production technique. For example, if you find you need to create 500 new spots a week, the template-based route might suddenly seem much more appealing. If your advertisers or host venue plan to participate in the network, give them the option to foot the cost for more expensive production techniques when they are appropriate.

    Don't be afraid to mix and match. While it's becoming increasingly important for the content on digital signage networks to complement the environment they're located in, you don't need completely homogeneous spots on your screens. In fact, by making all of your clips blend with each other, you may be reducing the chance that any one of them will stand out enough to engage your viewers. A flashy and eye-catching, full-motion spot followed by a couple of short animations or still screens can be visually arresting without breaking the bank.

    Spurred on by global demand, we're rapidly approaching a point in which the tangible costs of deploying the hardware and software will take a backseat to other challenges - such as filling the screens with content and making them effective - when organizations look at what it takes to run a profitable digital signage network.

    Bill Gerba is the Co-Founder and CEO of WireSpring Technologies, a retail-media software and services company. Its products have been used to remotely manage more than 8,000 interactive kiosks and digital signs around the world. Gerba also maintains a number of industry news and analysis sites, including WireSpring's popular Digital Signage Weblog (http://wirespring.com/weblog). billg@wirespring.com

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