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Digital Signage has Mixed Growth Potential

The digital signage market in the United States -- including hardware, software, installation, and maintenance services -- is expected to grow by about 33 percent in 2009, according to a new market study by ABI Research.

This latest forecast factors in the likely declines due to the recessionary economic environment, showing a healthy growth rate despite the current uncertain financial conditions.

There are several reasons for the positive outlook. Most traditional advertising media are losing their appeal. Consequently, digital signage has emerged as a potential way to deliver highly customized and targeted messaging in a variety of public locations.

And in a fast-changing world, the ability digital signage to be updated in real-time is a significant benefit. Retail, education, hospitality and corporate communication are apparently the first verticals deploying digital signage.

Adoption is also encouraged by improvements to a display's appearance, the generally falling prices of electronics goods, and less expensive local data storage. The latest generations of digital signage that include interactivity can offer a more compelling experience to users and provide valuable consumer feedback to marketers.

However, there are factors working against digital signage. The market is fragmented and comprised of a large number of smaller players, making it difficult for customers to identify the solutions and technologies they want to implement.

Data security concerns and a lack of standards also tend to impede the growth of this video-related industry. Cost is also a factor, especially now. Although digital signage technology promises increases in sales and revenue, such growth is not immediate.

The investment in installing a network can still be very high depending on the number of sites and the cost of the other components. Yet, businesses with ready access to capital may see a real opportunity in this technology.

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