How Does Digital Signage Work? An A to Z Guide

May 5, 2024

This article will demystify the operation of digital signage systems, providing a detailed explanation of each component and process involved, aimed at helping potential users understand and effectively implement these systems in their own settings.


Today, digital signage is a pivotal tool in modern communication and marketing. It has widespread use across various industries, including serving as wayfinding stations in hospitals, areas for patient check-in services, places of interaction, ever-changing advertising space, and more. But how does digital signage work?

What is Digital Signage?

Digital signage is a form of technology that relies on digital screens to display content. That screen can display:

  • Animations
  • Videos
  • Images
large digital sign with white screen in the airport terminal

The digital screen is controlled by software or a central server where industries like healthcare, food service, and retail can innovatively capture the attention of their audience by displaying content based on:

  • Audience 
  • Holidays
  • Promotions/Sales
  • Updates
  • Schedule

How Digital Signage Works

Digital signage is, at its core, an LED or LCD display that comes in different resolutions and sizes. The display or screen can be a standalone unit that is installed into a supportive kiosk or frame. It can also be a wall-mounted unit that is mounted somewhere within your facility.

With digital signage how it works relies on three primary components:

  1. Hardware
  2. Software
  3. Content


Unlike traditional televisions, digital signage serves as a screen. So, the hardware is not a fully flushed system. Instead, it's the same as a computer monitor, which requires connections to other things in order to display data.

From there, the rest of the hardware is designed to facilitate the display of your data. 

Some other hardware might include speakers if your display has audio and physical connections to things like a USB drive or a computer. However, in many cases, companies prefer to rely on cloud-based connections or Wi-Fi-enabled connections that utilize software to manage content.

Note: Not all hardware is the same, just the same as not all screens are the same. Some have better display capabilities for improved graphics or contrast. Others have certain features that facilitate better connectivity and software options. 

If you are unsure what type of hardware is best for your needs, what size screen you might need, you can reach out to professionals to get a consultation for your company.


Software is something that is not a physical piece of technology associated with the digital signage display. Software is what controls the content and enables you to manage your displays across several screens and facilitate regular updates or changes.

With the right type of software, you can:

  • Target specific locations with your advertisements
  • Control the volume or graphics
  • Troubleshoot content where needed
  • Perform analytics to track effectiveness
  • Manage different content across multiple screens
  • Push regular updates
  • Schedule content so that targeted advertising campaigns update automatically 

Note: Software needs to be compatible with the hardware you have. There is also a great deal of difference between how easy certain software is to use, how quickly it can scale, and other content management options.

If you are not sure what software would work best for your needs, consultations can offer better information based on industry, content goals, and size. 


The type of software you use serves as a platform in many cases for not only managing your content but for creating and organizing it. Certain content creation tools will provide templates you can use, allow you to schedule when you want certain content to be displayed, and control distribution using connectivity like local networks or your Wi-Fi connection.

Connectivity and Networking

As mentioned, there are connectivity and networking options based on hardware or software. With digital signage, how it works is either by connecting the system to a wired or wireless connection. 

  1. A wired connection would be anything that is directly connected through a cable like an HDMI cable linked to a laptop and overseen by an employee.
  2. A wireless connection is something connected to your Wi-Fi or Bluetooth which can be managed remotely.

In either case, it's important to have reliable connectivity and networking so that you can get content updates. If, for example, you need to be able to push an update based on holiday hours for the upcoming 3-day weekend, your business needs to have stable connectivity to be able to manage that remotely; otherwise, customers might look at outdated information when they look at your digital signage.

large advertising digital sign in red interior

Integration with Other Technologies

Depending on how you choose to use digital signage based on your industry, you'll be able to integrate digital signage with other business systems.

  1. Retail companies can integrate digital signage with a point-of-sale system so that customers can use a kiosk not just to find information but to make a quick sale. 
  2. Other companies including educational industries and healthcare industries can incorporate things like emergency alerts into their digital display such that the display might provide a wayfinding station or regular promotional advertisements but as soon as emergency information comes up, the content updates in real time with emergency alerts.

You can also integrate with other systems that improve the content you produce like integrating with inventory systems so that customers can get real time information on product availability, social media feeds to increase your brand awareness and interaction with customers, even weather APIs so visitors or clients sitting in a lobby can view real time updates on traffic and weather patterns later in the day.


The basic principle behind digital signage is the delivery of dynamic content through digital displays. Digital signage uses digital screens and connects through other hardware and software to display content on a specific schedule based on personal needs. How digital signage works remains relatively the same across several industries, with the key difference being the type of content that is produced and how it is integrated with other technologies.

Don’t hesitate to consider digital signage as a solution for enhancing communication and engagement.

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