Back-of-House Digital Signage

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Type: Article, Report or Whitepaper

Topics: Digital Signage

Date: December 2010

Despite the recent recession and continued challenges to the world economy, the digital signage sector has enjoyed stellar growth for the past several years. Advertising-based digital signage in particular has seen a double-digit increase in 2010, according to several industry reports. However, there is a lesser known niche within the digital signage market that receives little notice yet can yield vast opportunities for AV integrators and system designers: back-of-house digital signage systems used for employee communication.

Similar to advertising-based digital signage, "back-of-house" systems have seen increasing interest and growth despite the rocky economy. These types of digital signage systems are targeted towards employees and other internal company stakeholders, with content that is specifically geared for them rather than for customers.

"No matter what the vertical market, there is always a need for employee communication. Communicators have always struggled to get the attention of employees, and what they communicate is important information so it's necessary to grab their attention and engage," says Chuck Gose, director of business development at MediaTile. "There are a variety of employee communication tools such as newsletters, focus groups, and intranet. Employee communications digital signage is one part of the wheelhouse."

Mike Strand, president & CEO of StrandVision Digital Signage, explains, "Employee communications is a bigger opportunity due to the sheer numbers of vertical markets who use these systems. Employee communications is night and day compared with marketing communications. The message is not about selling, but more of a focus on staff development and interaction."

Strand started in the digital signage business because of employee communications. At his previous company, a bar code printing software manufacturer, he always wanted a better solution to communicate with worldwide staff. "We had an Intranet, but people had to seek it out rather than it being presented to them," he says. "My background is in computer programming, so I learned about web programming to implement a solution for our company. This pet project turned into what is now StrandVision Digital Signage."

For Steve Gurley, senior vice president of marketing and new market development for Symon Communications, this category of digital signage has seen a bump in spending. "Companies are dealing with an increasingly unsettled workforce so they are increasingly turning to digital signage to try and create a positive feeling," he says. "Just as important, today's employees tend to be so distracted with so many alternate forms of communications, that visual communication solutions such as digital signage are terrific for capturing mindshare and acquiring attention."

In addition to providing visual communications solutions targeted at general employee communications, Symon also provides real-time operational performance reporting for distribution centers, warehouses, and customer service centers. These systems are used to increase employee productivity by empowering them with information.

Gurley says that digital signage is but one component of a larger visual communication ecosystem consisting of display solutions that range from marquees and way finding, information kiosks, to LED Wallboards, desktop displays and smart phones. These display solutions work in tandem to create an immersive visual environment. "Large multinational companies with multiple locations such as hospitality, finance, healthcare, and other distributed companies have embraced this ecosystem approach to visual communications," he adds.

Uses of Back-of-House Digital Signage
Some of the common uses of digital signage for employee communications are company information dissemination, human resources program updates, employee contests, corporate videos and messaging, and real-time accident or performance reporting. Frank Kenna, president of The Marlin Company, says that digital signage is the newest evolution of workplace communication strategies that stretches back decades before computers were invented. "What we do today is the same thing my grandfather did 60-70 years ago with a photo and a poster about safety information," he says.

The Marlin Company approached digital signage as a way to focus on the message of workplace safety. Founded by Kenna's grandfather, the company's product (first analog, now digital) is aimed at helping companies relay safety information. "Until the mid 1990s, we were a print-based business. We had been producing designs that looked great on paper and wondered if there was a way to present them digitally. The Internet came along and solved the delivery problem; then flat panel displays were the final piece," Kenna says. "Employee communications all comes back to changing the behavior of employees; sending the message about a safe, productive, quality conscious workplace."

Opportunities exist at both large and small companies for employee communications digital signage systems to reinforce the mission and goals of the company and act as rumor control during tough economic times. "The more employee involvement means the easier it is to reinforce the company mission. You can implement an employee photo contest. Employees will stop and watch for their photo to pop up onscreen," says Strand. "You can mix in company messages, recognition, sales, and kudos to employees."

Another example of use is by an international hotel chain that is implementing a StrandVision system. Two years ago, this hotel chain removed all of the bulletin boards from the employee area citing that they weren't attractive, it was time-consuming for the manager to print and post announcements, and that there was no corporate control of content. The hotel's headquarters now sends content via the digital signage system, but each hotel site can add their own content for customization.

At his previous position at Rolls Royce, Gose used digital signage to deliver video to line workers on the manufacturing floor. This was revolutionary since these workers didn't have easy access to this content because they weren't working at a desk. He also used digital signage to drive traffic to other employee communications vehicles like the intranet. "Sending a barrage of email and voicemail is like poking people, whereas digital signage is putting information out there for people to consume. You have to use the right medium for the message," Gose advises.

"Investing in employee communications systems proves that the company is invested in improving issues like health and safety."

Market Pressures and Challenges
Back-of-house digital signage systems suffer from the same price pressures that plagued other signage niches. Prices for consumer-grade flat panel TVs and laptops are so low, that potential customers are tempted to buy from a retailer rather than a professional AV dealer for professional-grade products. What differs with back-of-house systems is the pressure to constantly refresh content and to find install locations where confidential company information won't be seen by customers or outside visitors.

As Gose points out, employee communications can be more difficult to manage from a content perspective. A retail location may see customers once a week, once a month, or even once a quarter. However, employees are there every day so the content needs to be fresh and dynamic.

Kenna notes that they have to actively sell the concept into this market segment because the biggest competitor is the do-it-yourselfer. "There is nothing stopping someone from going to a consumer electronics store to buy a flat panel and a computer to transform it into a modern-day bulletin board. What they don't realize is that we have a staff of writers, photographers, and editors to assist with the constant flow of new content," he adds.

According to The Marlin Company's calculations, a simple back-of-house digital signage system needs 18 pieces of content per month to keep employees engaged. "The do-it-yourselfers quickly realize that feeding the content beast is the hardest part of the equation," Kenna says.

Strand says that the economy has a pendulum effect on selling back-of-house digital signage systems. Economic concerns swing a customer either towards or away from the purchase. "The case for spending is that employees are nervous about their job and company loyalty is in decline so purchasing an employee communications digital signage system reinforces that the company is doing well and cares about every employee," explains Strand. "The case for not spending is that capital expenditures are being watched as well as concerns from nervous employees who see people being laid off but money being spent on digital signage."

Looking ahead, the biggest wild card is the U.S. economy. Capital budgets for companies big and small are under intense scrutiny, yet the need for improved employee communications is also greater during anxious times. Mediatile's Gose firmly believes that as budget dollars free up, companies will evaluate employee communications systems more closely.

So what will give a boost to back-of-house employee communication digital signage systems? "Awareness that these systems exist and are affordable," says Strand. "Once the economy starts growing again, companies will recognize the value."