Service Systems: Digital Signage

By George Koroneos • Contributing Editor | November 01, 2007

Large-scale digital signage isn't just for Times Square and sporting events anymore — it's everywhere. Take a stroll through a mall and you are bound to find dozens of LCD or plasma flat-screens previewing the latest movies, advertising designer jeans, or listing menu items. With monitor costs plummeting and high-speed Internet available almost everywhere, now is the time for the hospitality industry to go digital.

"Traditionally, companies would spend their marketing dollars on television, but that is no longer providing the return or the audience that they received in the past," explains J. Joseph Finizio, executive director of the Retail Solutions Providers Association, an industry association that represents technology manufacturers to the retail end-user market. "They are paying more in dollars, but are not getting much reach. Dollars are now going into Internet ads and into digital displays in the retail segment, be it stores, hotels, or food service."

According to a Forrester Research report about high definition (HD) technology at the point-of-sale, "Retailers will need to start including digital signage solutions in their marketing efforts in order to remain competitive." Forrester states that retailers could see sales lifts from 15 percent to 60 percent if they use digital signage to catch consumer attention.

Menus on demand
From Europa to Chop't, many quick service and fast casual food providers have replaced traditional (and pricey) static menu boards with flat-screen monitors that can be changed at a moment's notice.

At the cost of $1,500 to $2,500 for a static board, it is often more practical to leave a bad item on the menu than buy a new board, says Clint Eatherton, CEO of 7th Heaven Eatery in Phoenix, Arizona. Eatherton realized the benefits of easily modifiable digital displays and as such had four 46-inch NEC (www.necdisplay.com) monitors installed in the restaurant's new Scottsdale location.

"The displays offer creativity in terms of video and photos, allowing the user to change the look of the menu according to breakfast, lunch, or dinner," Eatherton says. "We calculated our return on investment as six years on the initial displays, but now that we developed the template, we expect to meet ROI in two and a half years for new stores."

The menu boards can be hardwired to the point of sale system and controlled through a menu-item usage program. Many software providers, such as Epicure Digital (www.epicuredigital.com), offer digital-display control programs that run on Web-based servers so the menus and advertisements can be controlled remotely. "In this scenario, you can go on the Internet and update pricing instantly," Eatherton says. "This is great if you are in a large company and you have to maintain pricing throughout many different regions."

Hotel communication
In hotels, digital signage is used primarily for event information or internal marketing but not so much for external advertising. Some hotels are attempting to fund the cost of digital signage installation by running ads on the signs, but most properties haven't found the practice fruitful.

There is also a heated debate about how to gauge the ROI of digital signage in the hotel space. Advertising can't be measured by traditional cost per thousand metrics. In retail, businesses can track the number of people that pass a sign, but can't measure whether it leads to a sale. Food service can use a similar tracking system, but there isn't a comparable ROI measurement system for hotels.

The Marriot-Anaheim is trying to sell airtime (during meetings at the adjacent convention center) to run commercials on its eight large-format Pioneer (www.pioneerelectronics.com) plasma screens, but as of press time had yet to make a deal. Most of the time, the screens show directional displays and in-house signage.

"The screens have a huge amount of potential and we barely scratch the surface," says Lynn O'Brien, Marriott's senior convention coordinator. "They can be used in so many ways that we are still playing catch up technology-wise."

The Marriot runs all of its displays through Omnivex's (www.omnivex.com) backend system, which resides on the company network as part of its server. Content is generated on the server and is sent via hardwired cabling over the Internet to small players nestled close to the displays. The signal is then fed directly to the screens.

"This gives us the flexibility to send a different program or schedule to each digital display," O'Brien says. "It's a little more involved than a reader board system and you need to have a little more experience with video and graphics to take full advantage of the system."

Going beyond advertising, one company is networking with external partners in a whole new way. Using a content system created by Flyte Systems (www.flytesystems.com), the Sofitel Chicago O'Hare hotel displays flight information from nearby Chicago O'Hare airport directly to a flat-screen monitor in the hotel lobby. Departure and arrival times are piped over the Internet through a live IP address. The system runs on the same Internet connection that the hotel uses to access the World Wide Web.

"People have so many things to do and juggle and it's so common for people to go from one city to the next," says Pierre Louis Giacotta, general manager of Sofitel Chicago O'Hare. "This technology offers one less thing that the guest has to do at the airport. It's also giving us an extra service to offer guests that they might not even know about."

Installation
Although monetizing and taking full advantage of digital displays might require a learning curve for the hotel industry, installation seems to be painless. Most systems consist of three components: a software content program, a content player or media pod, and monitors. The content management systems can be loaded onto the in-house computer network much like any other software. The signal is fed over the network to the media pods and then sent to monitors via CAT6 Ethernet cables. Media pods are small enough to fit in utility closets or even behind the monitors (if the hotel wants to do a little renovation). Finally, the monitors are mounted using traditional television mounting brackets.

Prairie Meadows Racetrack and Casino is considering updating its Key West Technology (www.keywesttechnology.com) media pods to show moving commercials rather than still images and is considering adding text crawls across the screen that stream hotel information. "You can't load thirty images onto these systems because you are trying to catch peoples' attention for the two to three minutes they are sitting at a slot machine or the minute and a half that they walk by the signs," says Prairie Meadow's Ryan Dunn. "So we try to keep the images to three at a time."

The casino is replacing all of its backlit signage throughout the casino with digital displays that are hooked up to media pods that control what is being shown on the 40-inch Sony (www.sony.com) LCD screens mounted in portrait mode.

"You can schedule every single one of these signs from a centrally located computer that ties into the company's network," Dunn explains. "Each pod is then designated to each TV so using your network you can find a media pod, download content to it and the second the content downloads, the media pod acts as a separate computer and will cycle through what you want it to show according to a prewritten schedule."

Giacotta says that digital signage offers both convenience and a wow factor. Hotels and restaurants need to keep up with the Joneses. Consumers are now dropping thousands of dollars to upgrade boxy televisions to fancy flat-screens. The professional signage and display market is in the double digit billions and hotel and food providers need to catch up, be it at the counter, in the guest rooms or in the lobby. The price point on LCD and plasma screens have dropped from obscene to affordable and it's only a matter of time before static menu boards are obsolete.

"People used to go into hotels and they would have a phone, a television Ã.‚¬" things they didn't have at home," Giacotta says. "Now, it's the opposite. Homes have Wi-Fi, flat-screen TVs Ã.‚¬" if the hotel doesn't have these things it is perceived as outdated. The paradigm has completely changed and people are expecting more and more technology." HT

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