One of the most common strategies in deploying a digital signage network is to generate revenue through advertising. There are a couple ways in which this is done. A lot of operators place their screens within certain stores and accept ads for products offered by that store. Others position their screens in areas that receive public foot traffic and promote a range of products and services from various companies.
In some cases, the signage network is owned and operated by the store, facility, or landlord of the area in which they’re deployed. In other cases, the screens are managed by an owner who focuses on placing them and finding advertisers. In this article, I’m going to clarify some of the issues behind the ad-driven business model. I’ll describe the advantages and possible drawbacks to the model as well as how to get started.
Who’s In Charge?
As I suggested above, there are several ways in which this business model can work. Each approach has someone different at the helm. For example, if a signage network is deployed in a retail store, the screens may be owned by the store’s management or an outside party. In the former case, the store might sell advertising spots to companies whose products line the shelves. The store’s management might be responsible for screen placement, maintenance, and content distribution.
On the other hand, an outside company might approach a retailer and offer to take on each of those responsibilities. In return for access to the venue, they would divide the profits generated from the advertising.
Advantages Of An Advertising-Supported Business Model
There are a number of advantages to deploying an ad-driven signage network. Beyond the potential profit from advertisers, a retail store can enhance the shopping experience of those who visit. Through a balanced blend of information and promotion, a store’s management can educate and entertain shoppers while alerting them to sales.
The profit generated from the advertising – which can be paid for by vendors – can also help allay the high costs associated with operating a retail outlet. Another advantage is the opportunity to form a cooperative marketing campaign with nearby businesses. For example, a movie theater might promote a nearby deli on their digital screens while the deli promotes the theater.
Possible Drawbacks And Potential Snags
Finding potential advertisers and negotiating rates is the main challenge in making an advertising-supported signage network profitable. Also, keep in mind that most advertisers will not agree to a long-term contract. After a few months, they may decide to opt out of their ad segment, thereby turning a profitable project into an expensive one.
For outside network operators, there is an ongoing need to have advertisers lined up as well as venues who have agreed to host the screens. One without the other eliminates the project. Being able to sell ad segments to prospective advertisers is critical, of course. However, just as important, operators must be able to work within the constraints of each venue. For example, ads that may be appropriate for a casino might be less so – and unwelcome – in a family-friendly retail outlet.
Be careful not to underestimate the effort and risks involved with managing a signage network through an ad-supported business model. If you have access to sufficient capital or already control a signage network, you can get started by approaching local businesses. Some will be open to hosting your screens while others will be interested in purchasing ad segments. Plan everything in advance. Calculate the revenue you can reasonably expect to attract given your ability to sell. Also, consider partnering with others who have experience with operating a digital signage project.
You can get involved with this business model if you plan carefully. The important thing is that you remain grounded with the right expectations.