U.S. Digital Signage Market Slated For Growth In 2009

Total revenue from the market is expected to increase by 33 percent this year and includes hardware, software, installation and maintenance, said Zippy Aima, digital media analyst at ABI Research. Aima said 2008 revenue ranged up to $700 million.

One reason behind the increase is customer disenchantment with traditional advertising, which is static and too broad in appeal, Aima said.

"Digital signage has emerged as a way to deliver highly customized and targeted messaging in a variety of locations," Aima said. "In a fast-changing world, digital signs' ability to be updated in realtime is a real benefit."

Resellers are echoing the findings, and said they are seeing an uptick as well.

"We've had a lot of requests and RFPs for both internal and external signage," said Burt Jepson, director of national accounts at Broadcast International, a Salt Lake City-based reseller. "It's a very viable industry, especially as people begin to think outside the box."

New verticals, such as law enforcement and government, are increasingly adopting digital signage in addition to the traditional customer base in retail, education and hospitality.

Jepson noted that BI just closed two deals with law enforcement agencies, and expects that area to grow.

While cost is the first consideration on clients' minds, the price of screens has actually declined, making digital signage even more attractive, said Dave Sallander, owner of Sherlock Systems in Buffalo Grove, Ill.

"We've been getting many more inquires," Sallander said. "And with lower-priced screens along with Software-as-a-Service, digital signage is very attractive."

Sallander said he is getting calls not only from enterprises that have several locations but also from small and even individual retailers.

However, Aima cautions that the road to growth is not without bumps. Because the market is fragmented and crowded with many players, she believes that it might be difficult for customers to sort out exactly which solutions and technology they need.

"It's true that customers might find it hard to distinguish value over partnership," Jepson said. "That's why we take a consultative approach -- we don't tell them what they want, we ask them what they need and educate them about what we can do."