Digital Signage ROI: A Digital Signage Cost Breakdown

It can be difficult to measure engagement—but if you are careful, you can calculate it. In order to decide if digital signage is the right choice for your business, you have to weigh the challenge you’re trying to solve against the potential rewards of a well-executed digital signage network. And to do that, you need some benchmark data and a digital signage cost breakdown. 

The first step is to determine the purpose of your signage. This will help you decide on the type of hardware to purchase, as well as other factors, like content and placement. Once the equipment is installed, the launch and usage of the signage should also be tracked to help determine your digital signage ROI (return on investment).

Calculating Digital Signage ROI

Determining ROI for digital signage can be tricky if you’ve never done it, but it’s actually quite simple.

First, what is the digital signage cost breakdown? What's known as "total cost of ownership" (TCO) plays a role in calculating the ROI of your signage. This simply means the total cost of purchasing, launching and using your digital signage over time. TCO can vary based on your specific needs, but digital signage should always be viewed as a long-term investment.

In order to calculate the ROI of digital signage, you'll need to consider a few things

  • Total cost: The total amount you spend on hardware and software amortized over a specified time period
  • Benchmark data: Determine the data surrounding the challenges you’re trying to solve
  • Assign a value to that data: Whether solving for employee engagement challenges or advertising revenue, your benchmark data needs to be tied to dollar amount

It's not a perfect science, but having a plan to calculate digital signage ROI before your signage is implemented will put you in a better position to measure your project’s success.

Cost Factors to Consider

As digital signage evolves, the cost of purchasing and installing the software becomes much more affordable. The reason TCO is used with digital signage is that it is a long-term investment and thus the costs of maintaining the equipment must also be taken into consideration

Digital Signage Cost Breakdown

In most cases, the digital signage cost breakdown looks like the following:

  • Displays
  • Display mounts
  • Media player/s
  • Software license
  • Installation and cables
  • Maintenance
  • Content management

 This is a basic digital signage cost breakdown model and should be based on your needs. Other things to consider would be additional costs like shipping, site servers and professional services.

Potential Rewards to Consider

Areas of improvement

Studies have shown that installing digital signage can boost sales, improve employee engagement, drive performance and more. While it may be difficult to assign values to each of those, it’s imperative to do so.

Cost Savings

You should also be thinking about cost savings. How much labor are you saving with your digital signage deployment? Are you factoring in the reduction of print costs? Are you considering the time it takes to go from content ideation through deployment vs the time it takes to do that with other communication mediums?

Brand Identity

The return on investment of digital signage can be increased through brand identity. Digital signage can help provide a platform to enhance brand perception. This, in turn, generates a broader sense of awareness and calls people to action.

Consistency is the key here and the long-term savings of digital signage far outweigh that of any conventional marketing tactics.

Understanding digital signage ROI can be confusing at first because digital signage is so fluid and there are so many factors to consider. However, there is no set standard on how to measure signage performance—it’s completely based on individual projects.

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