Just like TV, advertising has gone digital. Established companies and startups alike are racing to equip retail stores, train stations and even buses with LCD screens  and touch-screen computers  to deliver ads with animation, video and flashy graphics.
Titan Worldwide, an eight-year-old New York firm that handles a variety of advertising — transit, telephone kiosk, outdoor billboard and light pole banner — has begun placing flat-panel LED displays on the sides of buses and on train stationplatforms in Chicago.
Digital Aisle, a fledgling company in Woodridge, Ill., has taken that concept a step further by introducing interactive, touchscreen computers in retail stores across the country. In nearly 500 liquor stores nationwide, for example, the company’s Virtual Bartender teaches buyers how to mix drinks or plan the perfect party. It even includes a printer that allows customers to print out drink recipes.
“It’s about engaging the customer and turning their browsing into sales of that product,” says Digital Aisle President Eric Nordquist, a retail industry veteran who launched the company three yearsago with partners Chad Soderholm and Peter Guenther.
The two companies are among a raft of competitors in the nascent but growing U.S. digital signage market. According to InfoTrends, the North American digital signage market will grow from $1.6 billion in 2008 to $2.6 billion by 2013. Digital signage takes elements of television and the Internet and targets consumers in what the industry calls the “out of home” ad market. Chicago technology and marketing startup DNA Networks, for example, installs LCD screens in hotel lobbies and near meeting rooms, and through a revenue-sharing model is helping hotel management promote their properties and earn revenue from selling ads aimed at travelers.
With Virtual Bartender, Digital Aisle can, for example, tailor content to men or women with lessons on how to throw a guys’ or women’s night out in bars or restaurants. Similarly, with the transit industry, Titan Worldwide utilizes global positioning system (GPS) technology in its digital king-size bus posters to serve up advertising targeted to the demographics of the specific neighborhoods the buses are in. On DNA Networks’ screens in hotel common areas, local spas, restaurants and golf courses can advertise and offer discounts, adds Josh Coffman, a partner at DNA.
“There’s increased pressure to get more out of every dollar, and many see digital signage as the answer to advertisers’ prayers because it allows for very compelling media to be presented to highly targeted audiences,” says Lyle Bunn, a Toronto-based consultant to the digital signage industry.
While Digital Aisle deploys touch-screen computers, most digital signage companies use flat-screen displays with a PC or a slimmed-down, specialized computing device (called a media player or media appliance) directly attached.
Titan Worldwide’s displays can be connected to its digital network in three ways: through secure Internet connections, cellular broadband or internal private networks. Titan connects its bus LED screens through a secure cellular broadband network, while the LCD screens  on train platforms are connected to the transit system’s private network, says Aaron Higley, Titan’s director of digital operations. Titan uses a secure VPN connection between the company’s network and the transit authority’s data center, he says.
Digital Aisle relies on several touch-screen computer  manufacturers and typically deploys 22-inch to 32-inch computers. Recently the company began using smaller 10-inch to 15-inch computers. The Windows-based systems, which are connected online via a cellular phone network, have no keyboards, mice or open ports. Once turned on, the systems launch into Digital Aisle’s application. On the home screen of the company’s Virtual Beauty Consultant, for example, consumers can get help in picking the right product to color their hair; at the touch of a button, video of a consultant will walk them through the process, says Guenther, Digital Aisle’s CEO.
The display includes a barcode scanner and a printer for printing product information and coupons.
Titan Worldwide, which launched its digital division in late 2007, has begun rolling out digital signs in New York and Chicago. The company initially piloted the technology in one train station inChicago and now plans to install the displays in 20 stations by the end of April and eventually in 144 stations throughout the city, Higley says.
Titan shares a portion of its revenue with the Chicago Transit Authority and uses third-party software to stream advertising content from its company headquarters to servers located in the transit authority’s data center. The servers distribute the content to computers attached to each display.
Each train platform will feature six 52-inch LCD screens and a 32-inch LCD at the turnstiles. Some locations will also feature a 57-inch Urban panel with an HD display on both sides positioned near the station entrance. The LED displays on the sides of buses, known as digital kings, are 1 inch thick, 12 feet long and 2.5 feet tall, Higley says.
Unlike traditional static posters, digital displays allow the company to sell multiple ads on the same space and cycle through them. They will also serve as an informational resource to passengers, providing news, sports and weather information along with regular updates on when the next train will arrive, he says.
Overall, Titan and Digital Aisle executives say digital signage has the potential to transform the advertising industry by providing new opportunities to target ads based on time, location and demographics.
“You can start developing micro-marketing campaigns and promotional campaigns at specific stores based on tendencies and what consumers are looking for,” Nordquist says.
For example, Digital Aisle’s custom-built application includes a data analysis tool that stores demographic information that its clients can use for future advertising campaigns. The Virtual Bartender application collects data on age and gender and captures detailed information on the content each person selects. When a client realized its customers weren’t reaching important content on its touch-screens fast enough, Digital Aisle rewrote the content on the fly.
In Chicago, Titan will have new advertising opportunities, such as selling location-based or time-sensitive ads. A chain of doughnut shops, for example, can advertise coffee and doughnuts for breakfast, but sandwiches for lunch.
“Digital signs add a lot of value,” Higley says. “They are much more appealing, and they catch the eye.”