Digital Signage Benefits & ROI

Table of Contents

When I was a kid, I always hoped I would see one of those billboard guys rolling a new sign onto a billboard as we whizzed down the highway.

It fascinated me, the way two or three men rolled a brightly colored advertisement into place for all the world to see.

As I drive down the highway today, I still see those billboards, only they don’t require those men with the tools to unroll and glue them.

One by one, digital billboards are replacing static boards.

And that’s not the only place paper advertising is being replaced by digital signage.

Thousands of brick and mortar stores are ditching their posters and POS banners for the new technology.

It sounds cool, but does it actually make sense for your business?

Before you decide, you want to see exactly how digital signage can benefit your business, and if it’s actually better than traditional signage.

You want to be sure there’s a way to quantify digital signage’s results, so you can measure whether or not it’s a good investment.

Those concerns are valid.

We’re going to answer those questions, and then some. We want you to have the scoop so you can make the right decisions and invest in products that work best for you and your company.

In this chapter, we’ll show you how to measure the benefits of digital vs. traditional print signage and the ROI of digital signage.

I put together a framework for how to track your digital signage ROI. The PDF outlines — step-by-step — exactly what key performance indicators matter to track your ROI… you can bookmark, print out, or keep it in a folder for reference.

Print Signage vs. Digital Signage

It’s the digital age.

Some companies realize that and are on the frontline of technological innovation. Other companies don’t want to transition until it’s a proven method that brings them more business.

I’m going to use retail as an example here. Many of the benefits are also applicable to other industries, so keep an open mind.

Here are five reasons why retailers should switch from print to digital.

1. Increase Customer Engagement

Human psychology says that we have six human needs we must fulfill in order to feel whole. One of those needs is variety: the need for the unknown. We crave change and unique experiences. We need new stimuli, and we need it regularly.

For many, digital signage is new stimuli. If you can engage and stimulate your audience with something powerful, you’re on to something.

Digital signage makes an impression[28]. Of the 70 percent of Americans who recall seeing a digital video display in the past month, 47 percent specifically recall the ad that they saw.

That’s really high, especially since it’s over the last 30 days!

People are more likely to pay attention to colorful, moving images rather than static images.

While pretty posters are nice, moving images that elicit emotion are even better. When you can elicit an emotional response that connects with your customer, you engage with them. (Keep in mind that your digital signage goals might be various things like: educate, inform, entertain, engage, convert, or sell).

2. Make Good—and Numerous— Impressions

One study used anonymous video analytics to log the number of people who noticed both static and digital signs at multiple locations.

The number of impressions (people who walked by / looked at it) logged by the static sign peaked when it was first put up on its first day. After that, the impressions dropped off and remained low for the remaining weeks of the study.

But the digital signs received consistently high numbers of impressions throughout the study— receiving almost as many every day[28] as the static sign received the first day.

This suggests that while it’s easy to look past a sign that just sits there after the first time you’ve seen it.

It’s hard to ignore even a familiar digital sign.

No surprise there: Digital signs allows for constant change in the environment with audio, video, live news and social media streams, and more.

There’s no reason to leave the same content up for too long.

Users can update content remotely and their store, even 1,000 miles away, will see the updates within seconds.

Retailers consider this a huge benefit that saves time, hours, and employee manpower.

By updating pricing, promotions, and adding specials to create an upsell feature, fast casual chains can adjust to customer demand without deploying employees or having new signs printed. It also makes dayparting menus super simple.

3. Digital Signage Can Grow Sales by 12 percent

“You must spend money to make money.”[28]

Roman playwright Plautus[29] said that during his writing career before he died in 184 B.C.

Centuries later, his words are infamous on the lips of business coaches and fiduciaries[30]. Without financial risk, there is no reward.

This philosophy, coupled with the testaments of financial gain by businesses and organizations everywhere, proves that the leap to digital signage is only a danger to those who fear genuine growth in the digital age.

Let’s take an example from the food service industry: Taco John’s. In 2014, they made the decision to deploy digital menu boards.

Seven months into the deployment, they saw a 12 percent increase in sales.

Based on these results, they decided to add menu boards to 100 more locations. They were such a hit that Taco John’s made the decision to upgrade the rest of their restaurants through 2016.

What’s behind that success? Here are several real, relevant stats.

a) Digital signage drives impulse buys.

Have you ever caught sight of an advertisement and suddenly realized that you had, for example, been craving a KitKat bar all day?

Then you’ve joined the 19 percent of consumers who claim to have made unplanned purchases[28] of products they’ve seen advertised digitally.

And that’s only consumers who admit they’ve been swayed. We all know the real numbers are much, much higher — probably closer to 5 in 6 Americans make impulse purchases[42].

b) It’s a great way to promote specific items.

One study advertised certain food items at different locations where those items were sold, some of which had static signage and some digital.

The items advertised with digital signs experienced, on average, a 49 percent increase in sales versus a control period where there was no advertising.

Those advertised with static signs only had a 15 percent increase in sales. In other words, in this case, digital signs were 34 percent more effective[28] in promoting specific items than traditional signs were!

c) Digital signage motivates customers to action.

In the study mentioned above, static signs and digital ads were posted that prompted customers to go to the help desk and receive a free tote bag. One location received static signs; two had digital. Each location received similar numbers foot traffic to advertise to.

During the entire experiment, only 6 people took up the offer in the location with the static sign.

But a combined total of 610 people grabbed totes in the locations with digital signs.

4. Leverage Targeted Advertisement

Your signs don’t all have to display the same content.

You can change the ad depending on the time of day or location of the screen.

For example, let’s say that a library has recently installed digital signage. There are five different screens: at the entrance, the children’s section, the main check-out desk, the computer area, and the coffee shop in the basement.

Some ads might go on all the screens, like if there’s a holiday coming up and the library will be closed.

But some ads will only go on a few screens. The screen in the children’s department might advertise kids’ programs while the screen in the coffee shop might share about an upcoming music night. With digital signage, your information can go directly to its intended audience for maximum impact.

5. Gain Long-Term Savings

The reason so many of us resist buying a big ticket item is, well, because it’s a big ticket item. We fear it costs more than we’re prepared to spend.

Many of us don’t realize that the upfront cost of digital signage is often the same as what we spend on paper and poster marketing all year long!

For example, consider what it costs annually to:

  • have campaigns printed and distributed.
  • employ staff to design, create, and distribute those signs.
  • employ the same staff to redesign, recreate, and redistribute those new, updated signs.

What’s more, digital signage campaigns have a higher Return on Investment (ROI) than traditional campaigns.

We’ve seen time and time again that sales increase when digital signage is at the forefront of a sales funnel, especially when creative video plays a role.

When we can stare at a statistic that tells us anywhere from 65-85 percent of consumers are more likely to buy after watching a product video, investing in a digital signage campaign sounds pretty tempting.

The digital marketing format yields long-term savings, brings interest to your retail store, and gives you an ROI that makes moving into the Digital Age a really comfortable ride.

What’s Digital Signage Worth to You? ROI and ROO

You just finished reading some of the stats on how digital signage can benefit your business. They sure sound tempting! Let’s throw in one more for good measure.

One study found that 83 percent of small business owners who had invested in LED signs believed that their sales increased afterwards, and 86 percent said they thought the signs brought in new customers.

However, that same study cautions that dollars spent in advertising may take weeks or months to pay off (or not), and that many factors may be at play.

How, then, do you measure whether or not the digital signage you’ve installed is actually benefiting you and your business?

Can you get hard numbers instead of just a gut feeling?

Yes, you can.

By using Return on Investment (ROI) or Return on Objective (ROO).

What’s the Difference?

ROI is common. But I’ll define it anyways.

It’s what’s known as a “profitability ratio,”[31] or a way of calculating how profitable an investment you’ve made is. It measures the results (usually monetary, like increased sales) of an investment (such as installing digital signage) as a percentage of the original investment.

ROO is, essentially, a broader version of ROI.

This term has gained popularity with digital signage professionals, because as we’ll discuss later, it can be difficult to directly measure the ROI of digital signage.

ROO involves setting a goal[32] for what you want to get from an investment and then measuring how well those goals are met. The goals could be anything from increasing brand visibility to enhancing order accuracy at your restaurant.

Before we get into the nitty-gritty of how ROO and ROI work, perhaps you’d like a couple of examples. For illustrative purposes, we’re going to focus on Quick Serve Restaurants (QSRs). We’ll look at a form of digital signage popularly used at QSRs, and how a restaurateur could measure ROI and ROO.

The QSR industry is rich with examples of successful digital signage implementation—and it shows how different corporations can have different definitions of “success.”

Digital Menu Boards

If you’ve grabbed a bite at Wendy’s, McDonald’s, Taco John’s, or a number of others recently, you may have noticed a digital menu board (DMB) behind the counter. Seeing footage of shredded cheese showering a taco or a toasted bun falling into place always makes me a little hungrier. What could ROO and ROI look like in the context of DMBs?



Often,  ROO focuses on customer satisfaction. Seventy-four percent of customers say that an easy-to-read menu is a top priority.[33] A bright, colorful, welldesigned menu is highly readable, and by cycling through multiple screens it can display its information at a larger font size.

You could evaluate your objective of increasing readability by orally surveying customers about how easy to read your menu was before and after installing DMBs.

Regulation conformity:

Sometimes, your objective is to meet federal requirements.

Recent laws[33] require restaurants with more than 20 locations to display calorie information next to each item. Many restaurants also choose to list potential allergens such as gluten or nuts, and whether the items are vegan and/or vegetarian friendly.

Traditional menu boards just don’t have room to list all that information at readable size—but a digital menu does. Digital menu boards can cycle through multiple screens and switch information out easily.

If that’s your objective, your return would simply be seeing that your DMBs could fit the required information more easily than your old traditional menus.

ROI Sales:

ROI usually focuses on sales. It can be difficult to assess whether installing a digital sign has a direct effect on your sales. However, it’s still possible to evaluate, as we’ll explain below.

Studies show that installing a digital menu board can boost overall sales by 3 to 5 percent[33] and much higher on specific promoted items.

Digital signage is great for prompting unplanned purchases, and that holds true for DMBs. Thirty percent of customers report that digital signage menus influence which product they purchase. Also, digital menus give restaurants the ability to create promotions and offer upsells that rotate regularly, giving the establishment opportunity to generate more[33] money at specific times.

Foot traffic:

DMBs also drive foot traffic, particularly at locations like malls and airports where they can catch eyes of passers-by: 15 percent of restaurants report an increase in number of customers after installing a digital menu. And this, in turn, increases sales.

This is something you could track yourself, if you compared the average number of customers you received in an hour or day before and after your DMB’s installation.

A Simple Method for Finding ROO

Measuring ROO has become the industry standard in digital signage, because often the goals people have when they install digital signage aren’t purely or primarily monetary.

Is it possible to do without commissioning a study?

In fact, yes! Below, you’ll find a threestep process for designing a method of tracking ROO, along with a handful of specific strategies to get you started.

Step 1: Decide What Constitutes ROO for You

Before you invest in a digital signage system, you should have a clear picture of your goals.

Do you want to increase customer satisfaction by introducing queue management techniques via digital signs, in hopes of shortening their perceived wait time[34]?

Are you hoping to promote specific sales or special offers?

Maybe you’re planning on integrating digital signage with beacon technology, so that the approach of a customer with the right app installed on their phone would trigger a targeted message on-screen, increasing customer engagement.

Whatever the case, your goals will determine what aspect of ROO you’ll want to focus on.

After all, ROO doesn’t have to be monetary. It can be more abstract (though still quantifiable) as well.

If happier customers are your goal, then you wouldn’t look for an increase in sales—you’d, perhaps measure how long customers wait in line, and lessen decision fatigue by using a digital promotion board.

When everyone makes up their mind faster, no one has to wait as long.

This would actually kill two birds. If you cut down on wait time, there would be less people leaving for a place across the street.

Or you could be focusing on increasing your visibility. If that was the case, perhaps you’d be more interested in looking at whether your social media presence increased after installing the system.

Here’s what comes next.

Whatever metric you decide on, set a numerical goal: for example, a 30 percent decrease in perceived wait time within the first month of installing your screens at the checkout line.

You want a concrete way of determining if the digital signage system is worth it.

Step 2: Get Tracking!

After you determine your goals, you can develop a strategy for determining ROO. Here’s five strategies to give you some ideas.

Social Media

As mentioned above, if your goal is increased visibility and generating conversations, one great way to track that is by using social media[35]. There are many, many tools for pulling statistics from platforms such as Twitter and Facebook.

Likewise, there’s many ways you could use a digital signage system to enhance your visibility on social media.

Perhaps your store has its own hashtag, which your customers can use on Twitter. After installing your digital signage system, you can watch for an increase in use of that hashtag. You could program the screens to display a message prompting customers to Tweet about a certain topic, showing some of their responses on the screens in-store.

You can have a drawing to send a coupon or a prize to someone if they use your hashtag.

Customers love the chance to interact and be heard, and you get a publicity boost in the process.

Track Customer Impressions Through Prompted Actions

If you’re hoping to measure ROO in terms of customer impressions, you’ll need a way to track that.

While you could simply look at foot traffic through your store, that doesn’t reveal whether or not customers noticed the signs, and more importantly whether the signs prompted them to action.

The above-mentioned social media prompts could be one way to measure that, but not everyone is willing to use their personal feed to promote a business.

Instead, consider promoting a giveaway and measuring impressions based on the number of customers taking advantage.

You don’t need to break the bank.

An example is using a digital sign to instruct users how to digital download a coupon or enter a drawing, making them more likely to spend while in your store.

Track the number of coupons taken to determine how many meaningful impressions you’re making.

Feedback (from Customers and Employees)

Feedback falls into the more abstract category of ROO, but it’s still valuable—especially when the numbers are proving difficult to interpret.

Do your customers find the signs flashy and distracting, rather than eye-catching and appealing? Do they remember what they read on the signs?

Do they habitually check the displays for today’s promotions and deals? And what do your employees think? Have they noticed customers looking at the signs?

Do they feel they enhance the store’s ambiance?

You won’t know until you ask.

While conducting surveys can be time-consuming, the data yielded is invaluable. It can be a chance to collect demographics information as well.

Perhaps you’ll find millennials like the signs most, or that middle-aged women remember to check for deals most often. This information will help you tweak the signs’ content.

Step 3: Tweak Content to Maximize ROO

Once you’re armed with the demographic information and feedback you’ve collected in the process of determining ROO, you can use that information to maximize your ROO.

If you’re finding that millennials are paying the most attention to your signs, you can target content towards them.

If your older shoppers think the words are too small to read, you can increase font size.

It turns into a feedback loop: determining ROO enhances your ability to increase ROO.

Can You Calculate Your ROI?

That sums up ROO. Those of you who prefer to measure success in terms of hard dollars may be wondering, what about ROI? Like I’ve said, it can be hard to calculate the ROI of digital signage.

Here’s why:

  • Businesses rarely track the ROI of traditional paper signage. That means you won’t have any way to compare your data to after installing your digital signage. Studies have shown that much of traditional paper-based signage never gets installed or isn’t installed during the proposed promotional period.
  • Many factors may be at play besides the introduction of your menu board. How will you control for changes in the economy and seasonal highs and lows?

Is it possible to do?

Yes, it is.

Here’s a few commonly used key metrics for finding ROI.

Digital Signage Benefits and ROI: Digital Signage ROI

However, to get the best possible picture, you’ll need to do a side-byside test, using historical sales data. How it works:

Choose three to five of your chain’s stores. If they’re similar in terms of annual profit and foot traffic, that will be one less thing to control for. You should have sales data from former years on hand.

After installing digital signage in some (but not all) of those stores, continue tracking sales data.

For each store, compare year over year sales[36] (to mitigate the dataskewing effect of seasonality). For the stores that installed digital signage, compare before-and-after data.

Then compare the stores to each other, taking into account as many outside factors as you can: the economy, the stores’ locations, other changes at the store like remodelling…

Whew! Sounds like a lot of work, right? We have some advice to help you along.

When you’re carrying out these comparisons, you’ll also need to be able to measure both the investment and the returns of your digital signage. (Depending on if you are paying for the initial hardware investment out of CapX (and depreciation) or OpX you will need to adjust your ROI model to compare apples to apples.)

You’ll need to consider three things[37]:

  • Total Revenue: Cash generated.
  • Gross Profit: Revenue minus cost.
  • Net Profit: Gross minus expenses.

To measure these three elements, you’ve got to ask yourself some key questions.

Here’s why. They’ll not only help you determine your ROI in the first months as a digital signage owner, but will also continue to lead you in the right direction as things change in your industry.

Let’s dig into those key questions so that by the time you’re done reading, you feel more confident with your direction.

3 Questions to Ask About ROI

1. What Do You Need?

After deciding what purpose you want your digital signage to serve (which should be your first step, before you even think about investing), your next step in finding your ROI should be determining what software and hardware you need for your digital signage campaign.

For example, many restaurants now use digital menus or self-service kiosks.

The kiosks can replace paid workers[33], reducing payroll and insurance costs.

Schools or other institutions often use digital signage for wayfinding purposes. Interactive maps can minimize costs related to the printing of traditional maps and signs.

This alone can reduce employee time[38] dedicated to creating those products, as well as the time spent providing direction assistance.

In remote conference rooms, they replace workers who would otherwise spend hours training new employees on basic policies or new concepts.

Consider how you would use digital signage to enhance revenue, engage customers, and overall improve the movement of your business.

By determining what you need, you can then determine the best digital signage campaign for your business.

2. Does Total Cost of Ownership Play a Role?

The estimation of expenses associated with purchasing, launching, and using the signage should be taken into account. This is called Total Cost Ownership (TCO), and it can vary, based on your needs.

For the most part, digital signage should be looked at as a longterm investment, which is why TCO is important to consider when measuring ROI.

This is most often a point of resistance for potential sign owners, as they want an immediate return on investment. Nonetheless, a new digital sign owner should track how long the technology has been owned[39] before it has paid for itself. New sign owners must also consider the number of man hours spared without an employee or two writing, printing, and sending out updated posters and other disposable signage.

When looking at TCO on digital signage be sure to look at all costs. Freeware is very common right now but usually comes with limited functionality and/or fee-based cloud storage and services, and traditional on-premise signage comes with higher scaling costs to maintain and expand network servers.

With a digital signage network, sales, price changes, and specials can be updated with real-time information, saving thousands of dollars on printing costs and plenty of manpower hours each month.

3. Will ROI Improve my Brand Perception?

Lastly, but certainly not least, enhancing your brand perception can help generate a broader sense of who you are, ultimately bringing more people to you.

Digital signage can provide a platform for your business to help you achieve this. When more people become aware of who you are and what you do, more people will buy.

How’s that for simple analytics?

Because the signs can be changed at the drop of a dime, your brand content can be customized to suit a target demographic.

By doing this, your brand can reach different people at different times, churning sales[40] that may not have been able to happen before with standard, traditional poster advertising.


28. 18 Surprising Statistics About Digital Signage by Irfan Khan, Sixteen:Nine

29. Plautus, Encyclopaedia Brittanica

30. Fiduciary, Wikipedia

31. Return on Investment—ROI, My Accounting Course

32. Measuring Return on Objective: An Alternative Success Metric by Dan Meyer, Empower Media Marketing

33. Data Doesn’t Lie: Why Every Restaurant Should Consider Digital Signage by Irfan Khan, Commercial Integrator

34. How Digital Signage Reduces Perceived Wait Times by Celia Anderson, Digital Signage Today

35. 5 Types Of Social ROI With Big Business Impact by Peter Friedman, CMO.

36. Year Over Year—YOY, Investopedia

37. Return on Investment Formula and Use, Marketing MO

38. The Benefits of Integrating Wayfinding with Digital Signage and Who’s Using it Now by Daniel P. Dern, Corporate Tech Decisions

39. Total Cost of Ownership, Wikipedia

40. Digital Signage Will Increase Your Brand Awareness by James Barry, Ideas for Marketing

41. 5 in 6 Americans admit to impulse buying,