Digital signs provide flashy new trend in advertising

by Kazuaki Nagata

Moving through a bustling JR East station, one can’t help but notice the ubiquitous digital information swirling about.

Heading toward the Konan exit in Tokyo’s Shinagawa Station, pedestrians can be overwhelmed by the 44 65-inch displays running digital ads. Even inside trains, small monitors above the doors stream digital content almost nonstop.

With flat-panel displays now affordable and communications infrastructure growing more advanced, digital signage — information displayed digitally in public spaces — is growing in both use and variety, like ads that change depending on the time of day or interactive guides in commercial buildings.

While the fledgling service will still take time before it becomes ubiquitous, some players predict digital signage has the potential to become a ¥1 trillion industry in a relatively short time.

In the rising digital signage market, JR East has been a leader, most notably with its Train Channel, broadcasting ads and news on monitors inside many of its trains.

“Overall ad sales have been down in the past two to three years due to the sluggish economy, but digital signage is growing,” said Takashi Yamamoto, manager of transportation advertising at East Japan Marketing and Communications Inc., an ad agency owned by JR East.

When the company launched the Train Channel service in fiscal 2002, sales from digital ads came to a mere ¥82 million. They jumped to around ¥41.9 billion in the 2009 business year. The growth is obvious from the number of displays installed in stations and trains.

The firm now runs Train Channel on the Yamanote Line, Keihin Tohoku Line, Chuo Line and Narita Express, as well as the Keiyo Line starting last year. Combined, they have about 20,000 displays. It has also installed 210 displays 52 inches or bigger in 14 stations in the Tokyo metropolitan area and aims to increase that number to 300 by the spring.

Yamamoto said the growth in digital signs is backed by price reductions for flat displays and content distribution, as well as accelerated development of communications infrastructure.

For instance, the array of 44 displays in the Shinagawa Station concourse are connected to the WiMAX high-speed wireless network, making it easy to change content.

One big advantage for digital ads is efficiency and flexibility, Yamamoto said, noting that distributing digital content can be less costly because it doesn’t require physical manpower like putting up paper posters.

If it’s hanging “10, 20 or 50 posters, it’s doable. But if it becomes 100 or 500 it takes a huge effort,” Yamamoto said. “Train Channel on the Yamanote Line has 4,900 monitors. If you think about putting 5,000 posters, it is drastically cheaper.”

Researchers say usage of digital signs, now being led by the transportation industry, is sure to grow in other sectors as well.

Nojima Corp. launched a paperless cell phone store in Tokyo’s Roppongi district in November, with all information displayed digitally. Even the price tags for cell phones are displayed on iPads.

According to Yano Research Institute, a Tokyo-based market researcher, the digital signage market was worth about ¥55.2 billion in fiscal 2008 and is expected to increase to ¥128 billion in fiscal 2015.

Advertisers have increasingly shown interest in using digital signs, said Masayuki Nakano, senior manager of the business development department in the out of home media services division at advertising giant Dentsu Inc.

Nakano said digital signage has great potential for creative content, thereby generating even more interest among advertisers.

“I think the analog type (ads) will gradually shift to digital,” he said, but not to the point where everything will be digital.

Meanwhile, Kojiro Masuko, supervisor of Nakano’s division, said digital signage in terms of advertising still needs to clear some hurdles to become a more common option.

Although it’s true that distribution of digital content can be cheaper than print ads, there are still not that many digital content creators, so that part of the process is still costly.

Also, content format, such as types of files, graphic resolution and the amount of data, have not been standardized, so work still needs to be done in this regard.

While challenges lie ahead, the Digital Signage Consortium, which consists of people in related fields, aims to make Japan the No. 1 country in the world for digital signs and expand the market to ¥1 trillion by the end of 2015.

Digital signage has several key players, such as flat- and thin-display makers, content providers and businesses in communications infrastructure.

“Japan is quite advanced in all these fields,” so this business has vast potential, said Miwako Iyoku, managing director of the consortium and a senior manager in NTT’s research and development planning department.

Iyoku said offices will get in the act because the technology will allow employees to share information simultaneously. Touch-panel displays in public places offering information like searchable maps will also be useful, she said.

In addition, it can potentially become a “superlocal” medium for people to share information about their neighbors and local areas, something not really obtainable at present.

“I’d like it to be something that facilitates people’s communication and activities,” Iyoku said.

Fujifilm Imagetec Co., which has been creating print ads, is turning to digital.

The firm provides a touch-panel display for a shopping complex in Tokyo’s Ginza district that shows videos of shops with information in several languages, including English and Chinese.

The company has also introduced a digital display service connected to social media like Twitter and Facebook, in which messages sent through e-mail and social media appear on displays. This service is currently used at the Daimaru department store at Tokyo Station, where tenants can put out information for shoppers like recommended items and sales.

“We have knowhow from the print business, so digital signage is an extension of what we have been doing,” said Takashi Sanse, general manager of new business development at Fujifilm Imagetec.

“We are bringing new technology and integrating it.”