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InfoTrends Study Shows Strong Growth up ahead for Digital Signage

Friday, June 08, 2007

Press release from the issuing company

(Weymouth, MA) June 06, 2007 -- After struggling in the early years of its development, the business of networked digital displays in retail and other public spaces is now on the path to sustainable growth. At the end of 2006, the narrowcasting industry was valued at $1.1 billion with an installed base of 630,000 screens at 97,000 sites. Compared to the 2004 statistics, these numbers represent a CAGR (compound annual growth rate) of 56%. This growth marks the first time that the narrowcasting industry has exceeded previous estimations and represents a significant turning point.

To examine this growing market, InfoTrends has released a study entitled, Narrowcasting: The Opportunity for Digital Signage and In-Store TV Networks. This is the third major study that InfoTrends has conducted on this dynamic market. The study provides detailed research, forecasts, and analysis on the commercial market for display technology and services.

“In many regards, this document is an update to our previous studies, with fresh research and some expanded coverage, as our earlier data is now nearly three years old,” commented Normal McLeod, one of the study’s authors. “There are frequent references to findings from prior reports throughout this document, as this report examines the ways in which the industry has continued to develop, as well as the fact that some of the fundamentals have remained the same.”

In an increasingly connected world, decision-makers are gradually beginning to understanding the advantages of digital networks over printed signage – although printed signage will outnumber digital screens for many years to come. InfoTrends expects overall CAGRs of 18.5% for revenues, 8.9% for sites, and 11.9% for screens between 2006 and 2011. By 2011, total revenues are expected to reach $2.59 billion.

Key findings of the study include:

The typical survey respondent is using five different types of media, and printed signage and outdoor signs are still the most common.

Systems integrators are correct in identifying digital signage for advertising, promotion, and out-of-home applications as a key growth area. They should intensify their efforts to increase their exposure for involvement in applications of this type.

Compared with the survey conducted in 2004, respondents in this most recent study were much less concerned about issues such as lack of measurement of ad program effectiveness, as the body of data supporting the effectiveness of narrowcasting systems continues to grow.

Indicative of a high level of satisfaction, of the 51 current users of networked digital displays or in-store TV who responded to our structured survey, not a single one expected their usage over the next three years to decrease, and 80% expected it to increase.

Retailers and brand managers want their promotional programs of any type to deliver sales lift and increase traffic, and they are becoming more confident that narrowcasting systems can deliver on that goal. Securing repeat customers is their secondary goal, while attaining ad revenues from such systems is considered relatively unimportant.

Primary research for the study consisted of direct contacts with many of the industry’s vendors and a structured survey with managers involved in buying, designing, or placing out of home advertising and related media, corporate/IT managers, and systems integrators and VARs (value-added resellers). Responses were received from 244 managers working at advertising agencies, media companies, retailers, consumer goods manufacturers, and related companies and corporate/IT managers. The study also draws on InfoTrends’ extensive body of acquired knowledge in this industry, which has now been a practice area for seven years.

The complete study is available immediately for purchase. For more information about the study or to make a purchase contact Scott Phinney at +1 781 616 2100 ext. 123 or scott_phinney@infotrends.com.




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