Digital Signage technology is the most favored means of advertising as it transfers real time information to a target group of consumers. This information can be in the form of data, images, animations, videos or multimedia content. Various types of display devices such as plasma TVs, LCD panels, video cubes, projectors and full matrix LED boards can be used for displaying content. The greatest advantage of this technology is the increased return on investment as it only involves a one-time cost as opposed to the static medium of advertising which has high costs associated with updating content. Due to this flexibility in updating content, this technology is also referred to as Dynamic Digital Signage Software Solution.

Among the numerous benefits associated with this technology, the most common ones are real time information transfer from anywhere in the world, revenue generation by targeting specific locales and customers, influencing customer behavior, creating brand awareness, enhancing customer experience, consistency of cost and lower cost of production. Using this technology, information can be distributed to the servers and relayed over a network via TCP/IP protocols.

Used by industries as well as retail chains, this state of the art technology utilizes a network of displays which can be customized and controlled electronically. It is a confluence of hardware devices and a digital signage software solution. However, one needs to be aware of the network and bandwidth in order to successfully deploy this solution which should have the ability to accommodate future growth. Compatible with all file formats such as HTML, Video files, Flash files, QuickTime, Microsoft office and JPG, these solutions are available in both stand alone as well as customized formats. Easy to set up, manage and update, these software solutions are designed with either a single user or multi user interfaces.

Used globally, this out of home advertising medium is being used in airports, bus terminals, hospitals, entertainment facilities, financial institutions, educational institutions, supermarkets, government sectors etc. Since it has the capability of transferring high resolution images instantly while maintain security across the digital signage networks, this technology is growing in popularity worldwide.

Since beginning this column last fall, I’ve attempted to point to trends, analysis and reports that gauge the development of digital signage and identify the strengths and opportunities for this emerging medium.

I’m not alone on this mission. An excellent white paper from Profitable Channels makes a strong case for digital signage networks as an effective advertising medium with the ability to compensate for deficiencies in television advertising manifested in increasingly fragmented audiences, digital video recording and its accompanying commercial “zapping,” and the lack of certainty in measuring audience metrics.

The white paper presents highlights of a larger in-depth report entitled “Adding Out-of-Home Digital Advertising Networks to the Marketing and Media Mix” by Profitable Channels partner Stephen Diorio.

The white paper makes a strong case that marketers should take digital advertising seriously. It’s in the best interest of their companies, the white paper contends, to “make sure their agency partners are considering” digital advertising networks “as part of the marketing/media mix.” Additionally, it recommends marketers should be setting aside a portion of their marketing budgets for this emerging new medium.

According to the white paper, emerging digital advertising networks offer five advantages over traditional media offerings, including:

measurable sales impact proximity to the sale better ways to target media greater relevance to the product being sold tighter integration with local selling efforts

Many marketers have begun to recognize those benefits. The white paper points out that as of August 2006, 37 of the 50 largest supermarket chains “are rolling out, piloting or planning” for in-store digital signage networks and that more than 4,000 “big-box retail stores” display in-store video advertising. Further evidence supporting that marketers see the value of digital ad networks comes in the form of budget allocation.

Referencing research from Veronis Suhler Stevenson, Carat Media and others, the document asserts that by 2011 “up to $40 billion of traditional media spending” will be shifted into new media. Obviously, a large portion of this will be devoted to Internet advertising and other new media, but digital advertising networks stand to benefit as well.

“This reallocation of media spending reflects a shift in consumer “attention” away from traditional newspaper and broadcast media to the Internet and new digital media, including cell phones, video games, podcasting, and out-of-home digital advertising networks,” the white paper says.

It is important to note that the report lumps “cinema” into the overall digital media networks category without distinguishing between commercials and still ads projected on-screen by digital projectors and digital signage in and around motion picture theaters to promote films. Equally important to understand is that the former is likely to be significantly larger than the latter at this point. Regardless, the white paper identifies the overall strength of digital advertising networks, of which digital signage is an important part, and the likelihood that they will only continue to grow.

Perhaps best of all, the white paper identifies five separate research organizations that have found consumers like digital advertising networks. All show these networks have “value to, acceptance by and positive response from consumers.”

If you only have time to read one report this summer, spend it reading “Adding Out-of-Home Digital Advertising Networks to the Marketing and Media Mix” by Stephen Diorio.