Capital expenditures and ad spending on digital out-of-home (DOOH) registered the greatest gains among nine components measured in the First Quarter 2010 North American Digital Signage Index (NADSI), according to the Platt Retail Institute at The Chicago School of Professional Psychology. Overall, the Current Digital Signage Index for the fourth quarter of 2009 increased 1.56 percent versus the third quarter.
Moreover, the Near-Term Digital Signage Index (three- to six-month outlook) registered a 16.07 percent increase in sentiment. This is down slightly from the revised 18.02 percent increase in the Near-Term DS Index last quarter.
This 1.56 percent industry growth during the fourth quarter can generally be described as disappointing. Nevertheless, the score of 115.53 (over 100) still indicates a positive outlook, but at a slow rate of growth.
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| The Current Digital Signage Index for the fourth quarter of 2009 increased 1.56 percent versus the third quarter. Moreover, the Near-Term Digital Signage Index registered a 16.07 percent increase. Source: PRI First Quarter 2010 North American Digital Signage Index |
“We believe that the optimism associated with a new and growing industry collided with the headwinds of a generally weak economy,” said Steven Keith Platt, director and research fellow, Platt Research Institute., Chicago. “This result, however, is in direct contradiction to the general growth trend exhibited for the U.S. economy, which grew at a robust 5.90 percent during the fourth quarter.”
This divergence can be attributable to various factors, including: digital signage is not a core corporate function during a recession/depression; the current economic climate has seen a collapse in advertising spending; the Current DS Index is a lagging indicator; and the Near Term DS Index is a leading indicator.
“It is our view that the digital signage industry will improve slowly during the first half of 2010, with steady and moderate growth anticipated for the second half of the year,” said Platt. Various factors support this view, including the following:
- A gradual improvement in the U.S. economy.
- A recovery in advertising spending.
- A willingness/need for retailers and brands to embrace multiple media outlets to connect with consumers, including emerging digital platforms.
Review the entire First Quarter 2010 North American Digital Signage Index here.