Measuring the return on investment (ROI) of any new business venture is crucial for proving its effectiveness and making smarter business decisions in the future. But when it comes to digital signage, how can you tell if your investment has been worthwhile?
What is Return on Investment (ROI)?
Put simply, ROI is a measure of how much money you get back after investing in a return-generating activity. This lets you know whether your investment was worthwhile, as well as giving some indication of its effectiveness. You can calculate ROI using the following method:
- Calculate the total amount generated from a given activity.
You’ve sold 15 pairs of jeans at $12 a pair – generating a total of $180.
- Quantify the total cost of that activity.
The jeans cost a total of $85 to produce and sell.
- Subtract the total cost from the total amount generated. This gives you the total profit generated.
$180 made - $85 cost = $95 profit
- Divide this profit by the total cost and then multiply it by 100 – this will leave you with your ROI expressed as a percentage.
$95/$85 = $1.12 * 100 = 112% ROI
Calculating ROI is straightforward when the return is expressed monetarily, but what about digital signage, which often delivers intangible returns like awareness?
How to Measure Digital Signage ROI
It’s a problem faced by marketing departments everywhere – how can you accurately measure the ROI of a marketing campaign? Do you just need to look at sales figures?
In the retail space, where digital signage is generally used as a replacement for posters and marketing material, measuring ROI may be as simple as looking for a spike in sales of a particular product. For example, if your digital signage is promoting a specific special offer, counting the amount of people who take up this offer will give you some indication of the effectiveness of your content.
However, it’s generally difficult to assign a monetary value to media messages that aren’t intended to sell. Many of the benefits of screen publishing campaigns are intangible – brand loyalty, awareness, information, and so on. This is not to mention the increasing number of organisations that are choosing digital signage as a solution for their internal communications, a use-case that offers no defined return on investment.
In situations such as these, ROI may well not be the figure that your organisation should be focusing on.
Shifting from ROI to ROO
Because making money may not be the (only) goal of your investment in digital signage, it’s worth thinking less about ROI and instead focus on measuring ROO – return on objectives.
Before you can measure ROO for your digital signage investment, you must set some clear, achievable goals. Do you want to make more people aware of your brand? Perhaps you’re looking to better inform your employees about organisational updates?
Measuring the success of your digital signage against these defined objectives is far easier, and more useful, than calculating ROI. What's more, shifting concentration from ROI to ROO will allow you to better understand whether your investment in screen publishing has been worth it.
How to Measure Digital Signage Content ROO
Now you've set some objectives and your digital signage is displaying great content to help you achieve them, how can you tell if it’s working?
1. Ask Your Audience
This seems overly obvious, but talking to people – on the street, in your shop, or in your workplace – is a great way of receiving feedback. In a retail environment you could perform exit surveys, asking your customers if they took notice of your displays and if they can remember the information conveyed on them. The data collected from these surveys can then be taken into account when designing content in the future.
2. Include Calls to Action
A tried and tested method of measuring digital signage ROO is to include compelling calls to action (CTAs), exclusive to your digital signage. If your digital signage goal is to drive more people to your website, you could promote a unique URL on your displays. The number of people that access your site from this URL will give some indication as to the effectiveness of your digital signage content. You can encourage further participation by featuring discount codes or promoting other freebies.
3. A/B Testing
A/B testing is a great method for experimenting with your content to discover what’s most effective for achieving your goals. It involves creating two pieces of content that are identical except in one specific way.
As an example, imagine two bits of content. One could include a CTA saying “Offer ends soon! Use code ABC1”, the other would be identical except the CTA says “Offer ends this Friday! Use code ABC2.” Powerful digital signage software would allow you to automate the alternation of these two pieces of content across, say, the course of a week. If you then discover that there are more instances of the discount code “ABC2” being used, its safe to assume that the second CTA is more effective than the first and should be used going forward.
A/B testing can be used again and again and is an effective means of polishing your content and ensuring it works towards achieving your goals.
Get the Most From Your Digital Signage
Measuring ROI for digital signage is a tricky business when turning a profit isn’t always the main goal. Changing focus from ROI to ROO may hold the key to getting more bang for your buck with digital signage. For guidance on creating content that captivates audiences and helps you achieve your digital signage goals, download our 8 best practices.