Digital signage has become a popular way for businesses to increase their visibility and reach potential customers. It is an effective method of advertising that can be used in many different settings, such as retail stores, restaurants, corporate offices, airports, schools, and more.
But how do you measure the return on investment (ROI) of your digital signage software? We explore that and more in this article.
How to Measure Digital Signage ROI or ROO?
By understanding the basics of measuring ROI, you can make better decisions about where to invest your marketing budget and ensure you’re getting the most out of your digital signage. Here are some practical strategies for measuring digital signage ROI effectively.
Determine Your Objectives Clearly
Defining clear objectives will provide the foundation for determining how you want to reach your audience and measure success.
Think about what you want to accomplish with digital signage: do you want to increase sales, attract customers, promote products or services, or deliver messages? You can also use digital signage to engage customers by showcasing your brand or announcing special offers.
Whatever your purpose for investing is, make sure that you are able to define your goals in a clear and tangible way. Your objectives will shape your entire strategy for measuring ROI, so it’s important to get this right from the get-go.
Once you have established your objectives, the next step is to track key performance indicators (KPIs) such as engagement, visits, conversions, and impressions. KPIs need to be tailored to each individual objective in order for them to gauge success accurately.
For example, if your goal is increasing customer loyalty, then tracking customer retention rates would be a good indicator. If your goal is to increase sales, then tracking the average purchase value or the number of transactions would be more appropriate.
Choose the Measurement Methodology
Next, it is important to decide how your digital signage campaign goals should be measured. The most effective way to measure ROI from a digital signage campaign is by choosing the appropriate measurement methodology.
The main types of measurement methods include qualitative research (e.g. surveys and interviews), quantitative analysis (e.g. analytics), and observational studies (e.g. focus groups).
Qualitative research can provide insights into how customers are engaging with your digital signage, while quantitative analysis can track which content elements are performing best or not. Observational studies will offer you an in-depth understanding of customer behavior in the environment where your digital signage screen is located.
No matter which measurement methodology you choose, the key is to make sure that it’s aligned with your digital signage campaign goals. You should also consider what data points will provide the most meaningful insights into the effectiveness of your digital signage campaign.
By setting up metrics that are specific and relevant, you can ensure that you obtain accurate results.
Calculate Your ROI
To calculate your ROI from a digital signage system, you first need to determine the costs associated with the project. This includes hardware such as displays and media players, software licenses, maintenance fees, and any other associated installation or setup costs.
Once these expenses have been determined, you can create a rough estimate of how much money the system will save (or earn) for your business.
For example, if you are using digital signage to display promotional offers or advertisements in a retail setting, you can estimate how much additional revenue will be generated by each advertisement displayed. By dividing this expected ROI by the total cost of the project, you can determine your approximate ROI.
However, to get a more accurate assessment of your digital signage ROI, you should also consider any long-term savings or efficiencies that the system may generate.
For example, if you are using digital signage to reduce printing costs or streamline customer service processes, then those cost savings should be taken into account. Additionally, if the system allows you to reduce employee labor costs or enable better customer service, you should also take those savings into consideration.
ROI vs. ROO
When creating a business strategy, two of the most important metrics to understand are ROI and return on objectives (ROO). ROI measures how much money is generated from an investment, while ROO measures how well objectives are met through that investment.
ROI evaluates financial success and is typically used to measure one-time investments, such as advertising campaigns or capital investments. It’s usually expressed as a percentage and calculated by dividing the net gain from an investment by its total cost.
ROI helps companies decide if they should invest in new projects or not, or how much they should invest in any given project.
ROO is a more holistic metric that evaluates a project’s success by measuring how well it meets its objectives. It takes into consideration not only the financial returns but also qualitative factors, such as customer satisfaction and brand perception.
ROO is used to measure the overall effectiveness of projects, programs, or strategies over time, rather than one-time investments like ROI.
Know What to Measure
Understanding the ROI of your digital signage is key to proving its value and getting the most out of it for your business. To do this, you’ll need to know what metrics to measure. There are a few common metrics that can be used for effective measurement:
- Number of Views: Measuring how many people view your digital signage can help you determine how many people have been exposed to it. This is particularly useful if you are trying to promote products or services, as knowing the number of viewers can give you an indication of potential success.
- Engagement Rate: Measuring engagement rate is another important metric to consider. The engagement rate measures how much viewers interact with your signage, such as clicking on links or watching videos embedded in the content. This can give you an indication of how effective your digital signage is at communicating with viewers and whether it’s likely to lead to any purchases.
- Conversion Rate: Measuring conversion rate can be particularly beneficial for businesses that are using digital signage for promotional purposes. Conversion rate measures how many viewers take the desired action after interacting with the digital signage; this could be making a purchase, signing up for an email list, or following a link. This metric can give you an indication of how successful your promotions are.
By tracking these metrics, you can gain valuable insight into the effectiveness of your digital signage and start to measure its ROI. Having a good understanding of the metrics can also help you optimize your content for maximum engagement and conversions. With this knowledge, you’ll be able to get the most out of your digital signage investments.
Assess by Asking
Measuring ROI can also involve collecting feedback from customers, such as surveys and interviews. This can help you better understand the impact of digital signage on consumer behavior and perceptions. Additionally, it can provide valuable insights into how to further optimize your digital signage strategy and improve ROI.
It’s important to remember that measuring ROI isn’t just about tracking tangible numbers; it’s also about understanding the overall impact of digital signage on customer experience and satisfaction.
By assessing the effectiveness of your digital signage implementation against customer feedback, you can ensure that your digital signage is creating the desired customer experience and driving ROI.
Perform A/B Testing With Your Content
A/B testing is a powerful tool for any digital signage content campaign. It allows you to test different variations of content so that you can identify which one performs better and increase engagement with your audience. By comparing two or more versions of the same content, you can determine which elements are most effective in capturing viewer attention and driving customer action.
A/B testing is simple and easy to set up. First, you'll need to create two versions of the content you want to test. Once these are ready, you can deploy them on your screen or display. Then, monitor the analytics data for each version over time. This will allow you to compare performance metrics such as dwell time, views, and interactions.
To get the most out of your A/B testing, you should be sure to test different elements such as images, fonts, colors, layout, and design. Additionally, track changes in performance over time to make sure that your results are reliable.
Use the Power of Digital Signage
Digital signage is a powerful tool for businesses to increase their visibility and reach. It offers an effective way to communicate with customers, prospects, employees, or any other target audiences quickly and easily.
With digital signage, you can create visually appealing displays that draw attention, engage viewers, and get your message out more clearly, making it easier to keep track of what's happening and drive more sales.
But before investing in a digital signage solution, make sure you have a strategy in place to measure ROI to ensure that you’re harnessing the benefits of digital signage for your business. By measuring the ROI of your digital signage investments, you can determine how well your messaging is performing, and make necessary adjustments to ensure maximum effectiveness.