HOW TO: Sign Up for Profits

I was recently watching the sci-fi movie Minority Report, in which advertisers use retinal scans to identify individuals and create animated advertisements that greet them by name and mention their past and potential future purchases. Talk about direct marketing!

The next morning, at McDonald’s, the cashier asked if I wanted a latte at the very moment that a steaming hot latte image popped up on the digital menu behind her. I broke out in a cold sweat, paused a moment to make sure that my name didn’t pop up on the menu, covered my eyes and slowly backed out of the restaurant.

Everything above is true, except my reaction. What really happened is I ordered a latte and got to thinking about direct and targeted advertising and marketing, and how best the developing technology of digital signage could be applied in bar or beverage operations.

The Signs
Bar operators and their suppliers have attempted to influence the drinking and eating habits of their customers for generations through the use of signs made of neon and paper and scrolling LEDs that give sports scores, weather, and stock quotes. These are all categorized as ‘Out-of-Home’ advertising by the marketing industry, differentiated from in-home media like broadcast, print, and the Internet in that they are media distributed across place-based networks in venues. They may have, at some point in time, represented the best available alternative for reaching patrons, but they are all severely limited.

Neon signs are customizable only once, and when promotional needs change, the only alternative is to have a new sign made. At this point, they are mostly nostalgic, decorative fixtures. Paper flyers and posters are less expensive and quicker to change as needs change, but are certainly not interactive or dynamic. LED scrolls are more dynamic in that they can be changed by the operator or remotely by a subscription provider. Digital signage, however, overcomes all of these shortfalls while providing the operator with a world of additional opportunities.

The Technology
The simplest description of a digital sign is a high definition flat screen television located in a specific venue featuring some combination of promotions, advertising and entertainment. The entertainment provides the hook. The operator inserts the advertising and promotion to a very targeted market, someone who is almost sure to buy something from you—your customer, in your establishment, now.

The technology can be relatively simple and inexpensive. For purposes of our discussion we’ll assume that you don’t have an IT department. No problem. There are operators out there who are willing to provide a Web-based solution that covers both the technical challenges and content. Simage ( in Chicago, is one such company. It offers video content that compliments your concept, as well as templates and support for creating your own on-screen promotions. Their content includes advertisements, so there is no cost to the operator.

AMI Entertainment Network ( also offers its brand new digital display service for on-premise use. is a private TV network that streams directly into your establishment, showing exclusive content featuring full video ads that you create and control. Ad creation takes just minutes, and they can be used to advertise specials, contests, promotions, or anything else you want to let your patrons know about.

The Benefits
There are some tremendous benefits to employing digital signage in your establishment. Here are five facts to prove it:

1.  Research indicates that digital signs promote ten times more eye contact than static signs. Your patrons won’t see your message as readily if it’s delivered in any of the traditional ways. It will stick if delivered digitally.

2.  Your customers have a short attention span—and it’s getting shorter. The content on digital signs can be exciting and can change often, often every few seconds. This is an especially effective method of holding the attention of Generation X and Generation Y. Research also indicates that, as the result of almost constant sensory input, all generations have short and shortening spans of attention and demand the same instant gratification normally associated with youth.

3.  Consumers take between one and seven seconds to decide whether they will engage a message. They are more likely to engage your message in that short period if it’s exciting and interesting.

4.  Your customers won’t see advertisements from your direct competitor. When playing broadcast channels on your televisions, it’s possible—and in some segments of the industry highly likely—that your customer will view a competitor’s ad. This doesn’t happen with digital signage, as ads are carefully selected by your provider and certainly won’t come from competitors. The only ads and promos any of your customers will see for businesses in your segment are yours.

5.  Your advertising and promotion will be sure to hit a market that’s interested in your product. Advertising over broadcast media and in print provides you a good chance to communicate with consumers interested in your product. If you own a bar and want to promote a special event centered around a big game, you can buy broadcast advertising during televised games or take out print ads in the sports section of the local paper. Alternatively, and for a lot less money, you could promote that event within your establishment on digital signage and be sure that virtually everyone hearing your message was someone interested in that future event.

The Opportunities
There are some clear advantages that digital signage holds over traditional signage and media. Here are five ways to leverage those advantages:

1.  Selling advertising. Up to this point, I’ve discussed only providers who offer their service at no fee. These providers are able to do so because they include third-party advertisements with their content. There are other providers who charge a fee for support and content and allow the bar owner to sell advertisements, often at a substantial profit. I’ve stayed away from this discussion because bar operators don’t sell ads for a living and can get into trouble by focusing on something that is a potential source of revenue, but is not one of their core business skills. That being said, if you think it’s possible to sell your own ads, more power to you. Alternatively, aggregators are starting to pop up and can be an alternative to selling ads yourself. These “middle men” can match advertisers with operators looking to sell some of their digital signage time to third parties.

2. Driving new business. The most effective form of marketing is direct advertising. The term infers that the advertising is being targeted directly to interested parties likely to avail themselves of your product or service. This is a virtual impossibility; so direct marketing attempts to contact a group of customers who are mostly likely to be interested in what you have to offer. We can assume that those individuals who are already at your establishment are as good a target market as there is, and that promoting and advertising to them is the best way to make contact.

3.  Customizing your advertising and promotion. When I teach the marketing section of my beverage management classes, I discuss the importance of identifying your target market and then making sure all operations are consistent with the preferences of that target. A student once asked about a club in Providence that, on different nights of the week, attracted very different crowds. Each week the club ran a college night, a techno night, an oldies night and a fetish night. Surely, the student pointed out, each of these evenings must attract a different target market and, based on these widely varying markets and their widely different preferences, consistent operations must be difficult. I told her that as long as operations were consistently supportive of a given night’s customer preferences, then the operation could be successful (which it is). This club uses digital signage and is able to change all of the content depending on the night of the week and theme. Video content, advertising, and promotions for signature cocktails, drink specials, nightly activities or contests, and future events are completely different for each, making it possible to effectively market to each highly diverse group.

4. Influencing point-of-purchase decisions. You have a signature cocktail with a high profit margin; You received a good deal on a particular brand of beer from your supplier; Your beverage sales are great but your food sales are off. Any of these items could quickly be featured on digital signage in an effort to influence patrons and sell high-profit items or improve lagging sales. Have your staff up-sell, and imagine having your signage help.

5.  Enhancing your brand. You have a particular image and need to constantly reinforce it with your patrons. The video content and association with other advertisers included on your digital signage can help you do it. If you seek to attract a young, alternative crowd, then video content of extreme sports and advertisements of energy drinks help to reinforce your image with that target market. If you seek young professionals, then video content of beautiful people out on the town and advertisements from a luxury watch maker might reinforce your image with that target market and increase its patronage.

The Future
Digital signage technology offers some incredibly useful applications in the bar and beverage industry right now. Most experts agree that the technology has just begun to scratch the surface of its potential, and that new, more affordable, and even more exciting options are soon to come.

There is some indication that broadcast networks—whose advertising revenue has suffered as the result of the proliferation of cable channels and the fragmentation of their audience—see great revenue potential in providing video content for digital signage. If you’ve been in a hospital waiting room, airport, or even on a plane, you may already have come into contact with the first iterations of this move. Broadcast networks have re-purposed much of their material, packaging it for specific markets and then selling time to these broadcasters who crave access to the markets they provide. The success of these efforts is likely to encourage these networks to provide content to a greater variety of businesses, including those in the food and beverage industry, in an effort to reach valuable markets for advertisers, leading greater choice and perhaps new sources of revenue for bar and beverage operators.

There is also some discussion among industry watchers of putting RFIDs (radio frequency identification chips) into store credit cards or rewards cards. These tiny communication devices would identify specific customers, access their data bases, and then provide specific advertising and promotions for them on digital signs, which is creepy, but appealing to ad buyers. So remember to cover your eyes!

By Brian J. Warrener, Associate Professor at the Hospitality College of Johnson & Wales, in Providence, Rhode Island.