U.S. Digital Signage Market to Grow by One Third in 2009

Total revenue from the digital signage market in the United States including hardware, software, installation, and maintenance is expected to grow by about 33% in 2009, according to a recent study published by ABI Research. This forecast factors in the likely declines due to a recessionary economic environment, showing a healthy growth rate despite the temporarily uncertain financial conditions.

There are several reasons for the positive outlook, according to industry analyst Zippy Aima, reasons that are tied to longer-term trends. "Traditional advertising media are losing their appeal for many consumers," she says. "Consequently, digital signage has emerged as a way to deliver highly customized and targeted messaging in a variety of locations. And in a fast-changing world, digital signs' ability to be updated in real time is a real benefit." Retail, education, hospitality and corporate communication are the first verticals adopting digital signage.

Adoption is also encouraged by improvements to displays' appearance, the generally falling prices of electronics goods, and less expensive data storage. The latest generations of digital signage that include interactivity can offer a more compelling experience to users and provide valuable consumer feedback to marketers.

On the other hand, there are factors working against digital signage. The market is fragmented and comprised of a large number of players, making it difficult for customers to identify the solutions and technologies they want to implement. Data security concerns and a lack of standards also tend to impede the growth of the industry.

Cost is also a factor, especially now. "Although digital signage technology promises increases in sales and revenue, such growth is not immediate," cautions Aima. "The investment in installing a network can still be very high depending on the number of sites and the cost of the other components. Yet, businesses with ready access to capital may see a real opportunity here."