How Effective Is Digital Signage Compared to Traditional Advertising Methods?

This article will evaluate the effectiveness of digital signage compared to traditional advertising methods, highlighting its advantages, challenges, and integration into broader marketing strategies to provide businesses with insights for making informed advertising decisions.

Introduction

The role of digital signage has increased over the years, in large part thanks to its integration into modern advertising strategies. Throughout history, traditional advertising has been the only method available to companies other than word of mouth, but now digital signage technology is casting a shadow over broadcast advertising, billboards, and print media by offering something that increases customer engagement, is more visually stimulating, and has a higher return on investment.

Advantages of Digital Signage Over Traditional Advertising

So, what are the key advantages of digital signage over traditional advertising?

Dynamic Content Updates

The first is the ability to change content in real-time. This is simply not possible with most traditional methods. This means that you can offer dynamic content updates based on several factors.

For example:

Companies can utilize features that provide information on inventory, such as a countdown measure, which is continually updated in real-time based on previous purchases. On the other hand, companies can also include a count that increases with the number of purchases on a specific product or the number of customers who have taken advantage of a discount or promotion.

This type of display is not only constantly moving and therefore eye-catching, but it capitalizes on the psychology behind consumer behavior by encouraging customers to recognize the scarcity of programs or to want to be part of the exclusive club of people who have purchased a new product.

With traditional advertising, if you want to provide educational content or holiday discounts to people, you need staff members to physically change out the signs in your store. But with digital signage, you can manage those changes automatically, have them generated at your leisure, and schedule for when the holidays approach.

Increased Engagement

One of the ways that you can see the effectiveness of digital signage over traditional advertising is increased engagement. Digital signage has a higher likelihood of being able to retain attention, capture potential customers with visually appealing content, and increase the dwell time in front of an advertisement.

Stagnant advertisements with things like promotions and weekly sales can be much more easily ignored by customers who are passing by the sign compared to a moving advertisement that has interactive elements and motion graphics.

Moreover, the dynamic content that you create offers a chance to increase engagement with additional features like social media connections or QR codes. QR codes are one of the easiest ways that your company can increase engagement with digital signage. While this is a possibility with traditional advertising as well, digital signage provides the chance to instantly and easily update those QR codes to modify the deals that are offered throughout the day.

You can change the digital advertisement displayed for audience segmentation and, with it, the QR codes or other engaging activities that accompany it.

Targeted Advertising

How effective is digital advertising compared to traditional advertising? With traditional advertising, you are confined to things like print media, and if you want to relate to several audience segments, that means budgeting for print material for each. 

By comparison, you can use targeted advertising to create tailored messages to specific audiences at specific times, enhancing the relevance and impact of advertising on digital displays. This means you can use features to:

1. Create multiple ads for different demographics
2. Schedule those ads to run at different times, corresponding with normal audience traffic
3. Change ads quickly without increasing costs in response to performance 

Cost-Effectiveness

Initially, there are higher costs for investing in digital signage compared to traditional advertising expenses. This is owing in large part to the fact that you need to invest in hardware and software when starting with digital signage. 

However, many businesses find that the effectiveness of digital signage is worth the costs because they can make use of things like flat-screen televisions or computer screens they already have, converting them into the primary source of their digital display. 

In the long term, your digital signage effectiveness might be based on several things, such as the type of software you use or the digital content service providers with whom you work. Ongoing expenses can vary from companies with limited services to companies with highly engaging services and several additional features. 

That said, the monthly cost of such services is notably low compared to traditional advertising expenses, ranging from $15 to $100 per month. Compare this to the cost of writing articles, printing flyers, and paying for large posters, and it saves your company hundreds of dollars in advertising. 

Moreover, a secondary long-term benefit of this cost-effectiveness is the ability to quickly modify displays without having to purchase ongoing posters or pay for printers. All it takes is a quick modification within the software for you to change a meeting time or update the discount percentage on a sale item. 

Measuring the Effectiveness of Digital Signage

How effective is digital signage? The only way you'll know the effectiveness of digital signage advertising is by measuring key performance indicators and using the right types of tools and Technologies to track engagement.

Key performance indicators (KPIs) 

KPIs can be used to gauge digital signage effectiveness. This can include:

1. A/B-tests, where you evaluate different variations on the same type of advertising but with slightly altered prices, designs, and so forth. This lets you test two different advertising videos or graphics to see which one has higher revenues, more sales, or drives increased foot traffic.
2. ROI is another key metric that you can continue to use in traditional and digital advertising.

Tools and technologies

There are different tools and technologies that make it easier to track engagement and conversion rates. If you work with a company that provides digital signage solutions, you can investigate the types of tools and technologies they provide to measure things like social media content, conversion rates for customers joining a loyalty program, and sales traffic based on specific advertisements.

Conclusion

Overall, digital signage effectiveness is not only higher than traditional marketing when it comes to user experience, engagement, and return on investment, but it's significantly more cost-effective in the long term. Changes can be quickly made, new advertisements can be displayed at various times of the day, and none of this requires increased manpower. Review the ways in which your company can make informed choices that balance digital and traditional advertising methods for your company's needs.