The Display Is Not the Investment

When businesses begin considering an LED display, the conversation often starts with:

How much does it cost?

That’s an understandable question, but it’s not the first question that should be asked.

The more important question is:

What can this asset accomplish for the business?

A commercial display can potentially:

• Increase visibility
• Influence purchasing decisions
• Promote products and services
• Increase customer visits
• Improve communication
• Promote multiple messages
• Support marketing campaigns
• Generate advertising revenue

The value of the display comes from what happens because it is there.

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Start With the Business Objective

Before considering pixel pitch, brightness, cabinet size, or software, define the result you’re trying to achieve.

Are you trying to:

Increase Sales?

Use visual communication to promote products, services, offers, or opportunities.

Increase Traffic?

Give people a reason to visit your location.

Increase Transaction Value?

Promote complementary products, upgrades, or higher-margin opportunities.

Improve Communication?

Provide timely information to customers, visitors, employees, or members.

Build Awareness?

Increase visibility and reinforce your organization within the local market.

Generate Advertising Revenue?

Sell access to the audience your location already attracts.

The same display could potentially accomplish several of these objectives.

The objective should determine the application—not the other way around.

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Identify the Audience

A display has value only if people see it.

Before evaluating technology, consider:

Who is the audience?

Where are they coming from?

How often do they encounter the location?

How long do they have to see the message?

What are they doing when they see it?

Are they approaching a purchasing decision?

These questions help determine whether visual communication can actually influence behavior.

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Evaluate the Location

The physical location is part of the marketing asset.

Consider:

Traffic

How many people pass or visit the location?

Visibility

How easily can the display be seen?

Viewing Distance

How close or far away will the audience be?

Viewing Angle

Will people approach from multiple directions?

Dwell Time

How long does the audience have to engage with the message?

Environment

Is the display indoors, outdoors, roadside, on a building, or within a customer environment?

Competing Attention

What else is competing for the audience’s attention?

A technically excellent display in the wrong location can produce disappointing results.

Location and audience should be evaluated before technology.

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Understand the Marketing Medium

An onsite LED display is best understood as a visual marketing medium.

It occupies a physical location and provides the ability to communicate changing messages to a recurring audience.

That makes it different from a traditional static sign.

A static sign generally communicates one message until someone physically changes it.

A dynamic display can communicate:

Message A

↓

Message B

↓

Message C

↓

Message D

throughout the day.

That creates something more valuable than simply changing the appearance of a sign.

It creates an inventory of communication opportunities.

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Determine How the Asset Will Generate Value

There are two primary economic models.

Model 1 — Use It to Grow Your Business

The organization owns the display and uses it to influence its own customers.

Potential value can come from:

• More visits
• More transactions
• Higher transaction values
• Product promotion
• Service promotion
• Increased awareness
• Repeat business

The fundamental question becomes:

How much additional business would the display need to generate to justify the investment?

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Model 2 — Use It as an Advertising Asset

The organization owns the display and sells some or all of the available advertising time to other businesses or brands.

Potential advertisers may include:

• Manufacturers
• Suppliers
• Distributors
• Local businesses
• Service providers
• Community organizations
• Other complementary businesses

Now the display has another potential revenue stream:

The audience itself becomes an asset that can be monetized.

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Model 3 — Combine Both

A business doesn’t necessarily have to choose.

Some inventory can be used for the organization’s own marketing while other inventory is made available to advertisers or partners.

This creates a hybrid model:

Own-use marketing + advertising revenue

The appropriate mix depends on the location, audience, objectives, and economics.

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Evaluate the Economics Before the Equipment

This is where the investment conversation should become more rigorous.

Start with:

Total Investment

Consider the complete cost of the project—not simply the display.

Potential components include:

• Display hardware
• Controller
• Structure
• Installation
• Electrical work
• Permitting
• Content management
• Software
• Maintenance
• Financing costs
• Ongoing service

Then consider:

Potential Return

For an own-use application:

Incremental revenue

→ Incremental profit

For an advertising application:

Advertising revenue

→ Operating costs

→ Net contribution

The question isn’t whether the display is expensive.

The question is:

Does the potential economic return justify the investment?

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Don’t Confuse Revenue With Return

An increase in sales doesn’t necessarily equal an increase in profit.

For example, if visual marketing generates additional sales, the business needs to consider:

• Gross margin
• Variable costs
• Promotional discounts
• Additional labor
• Product costs
• Other incremental expenses

Likewise, advertising revenue isn’t the same as advertising profit.

The economics should be evaluated based on incremental contribution, not simply top-line revenue.

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Build a Realistic Scenario

No projection should be treated as a guarantee.

Instead, evaluate multiple scenarios.

Conservative

What happens if the display produces a modest improvement?

Expected

What happens if the application performs as reasonably anticipated?

Optimistic

What happens if the location and content significantly outperform expectations?

A range is more useful than a single predicted number.

This is also why Envoltage’s ROI Calculator should be used as a planning tool, not a promise of future results.

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Understand What Influences Performance

A display doesn’t automatically produce a return simply because it is installed.

Performance depends on factors such as:

Location

Can the audience see it?

Content

Does the message earn attention?

Relevance

Does the message matter to the audience?

Timing

Is the message being shown when it can influence behavior?

Frequency

Does the audience encounter the message often enough?

Offer

Is there something worth responding to?

Measurement

Can the business determine whether the communication produced an effect?

This is why the display itself is only one part of the investment.

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Content Is an Operating Expense—and an Opportunity

A common mistake is to treat content as an afterthought.

A dynamic display creates the ability to communicate continuously.

That means someone has to determine:

• What should be displayed?
• When should it be displayed?
• How often should it change?
• Which messages deserve priority?
• Which campaigns are working?
• What should be removed?
• What should be tested?

The more strategically the display is managed, the more opportunity there is to extract value from the asset.

The screen creates the inventory. The content determines how that inventory is used.

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Choose Technology After Defining the Application

Only after the business objective and application are understood should you begin evaluating the display itself.

Important considerations may include:

Pixel Pitch

How closely spaced are the LEDs, and how does that relate to viewing distance?

Brightness

How much light output is appropriate for the environment?

Viewing Angle

How broadly can the audience see the display?

Refresh Rate

How does the display perform for video and camera-based applications?

Weather Protection

What level of environmental protection is appropriate for outdoor installations?

Size

How large does the display need to be to communicate effectively at the intended viewing distance?

Structure

How will the display be mounted or supported?

Content Management

How will messages be created, scheduled, changed, and monitored?

Serviceability

How will the system be maintained over its useful life?

The best specification is the one that supports the application—not necessarily the most expensive specification available.

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Consider the Entire Lifecycle

The initial purchase price is only one part of the investment.

Think about the asset over its useful life.

Consider:

Acquisition

What does it cost to purchase and install?

Operation

What does it cost to operate and manage?

Maintenance

What service and replacement costs should be expected?

Content

Who creates and manages the content?

Technology

Will software and control systems remain supported?

Revenue

What value can the asset generate?

Longevity

How long is the asset expected to remain productive?

This gives you a more realistic picture of the investment than simply comparing equipment quotes.

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Compare Suppliers After You Understand the Application

Once you understand what you’re trying to accomplish, supplier comparisons become much more meaningful.

Ask:

• Can the supplier explain why its proposed solution fits the application?
• Are the recommended specifications appropriate for the environment?
• What is included in the project?
• What happens after installation?
• How is content managed?
• What does the warranty actually cover?
• What service is available?
• What happens if something fails?
• Who owns the equipment?
• What are the ongoing software or service costs?
• Can the system evolve with the business?

And perhaps most importantly:

Is the supplier helping you buy equipment—or helping you build a useful marketing asset?

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Don’t Let Price Become the Only Variable

Two displays can have very different prices and still produce very different value.

The least expensive system isn’t necessarily the best investment.

Likewise, the most expensive system isn’t necessarily the best investment.

The right question is:

Which solution provides the appropriate capability, reliability, and economics for the application?

That’s a very different purchasing decision than simply finding the lowest quote.

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Measure the Asset After Installation

The investment shouldn’t end when the display goes live.

Establish a baseline before implementation whenever possible.

Depending on the application, measurement might include:

• Sales
• Transactions
• Average transaction value
• Product sales
• Customer visits
• Promotional response
• Event attendance
• Advertising revenue
• Customer engagement
• Other defined business outcomes

Then compare performance over time.

Not every result will be attributable entirely to the display.

The goal is to develop a reasonable understanding of whether the asset is contributing value and how that value can be improved.

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The Investment Doesn’t End With Installation

A commercial display is different from many traditional capital purchases.

Once installed, it creates an ongoing opportunity.

The business can:

Change the message

Test different offers

Adjust the schedule

Promote different products

Respond to seasons

React to events

Add advertisers

Change strategies

The asset becomes more useful as the organization learns how to use it.

That’s why the investment should be viewed as a marketing system, not simply a piece of equipment.

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The Envoltage Approach

At Envoltage, we believe the conversation should begin before the equipment is selected.

First:

What are you trying to accomplish?

Then:

Who is the audience?

Then:

Where does communication have the greatest opportunity?

Then:

How could the medium create value?

Then:

What does the economics look like?

Only after those questions are answered should we determine:

What technology is appropriate?

That’s the difference between buying a display and evaluating a marketing asset.