The Platt Retail Institute (PRI) released its first North American Digital Signage Index this week, which examined activity in this year’s third quarter, as well as the outlook 3 to 6 months out. Steven Platt has developed a strong and well-deserved reputation as a provider of high quality research on digital signage and retail. The PRI team was recently upgraded with the significant addition of Margot Myers as Director of Education and Training. She was most recently the Manager, Retail In-Store Programs for the USPS, and was fully immersed in their digital signage and interactive initiatives. I spoke with Margot at the recent Digital Signage Show in New York, and she is fired up about what PRI can do as catalyst for education and research in digital signage. And well she should be. Their own academic and business qualifications along with their affiliation with the Chicago School of Professional Psychology lay the foundation for quality research. From this scribe’s perspective, in tandem with the efforts of the Digital Signage Association, PRI has the opportunity to really raise the bar in terms of education, research and establishing some common metrics and methods. The NADS Index may well be a first move in that direction.

The detailed report contains definitions of the sub-segments of the industry that were polled to establish the index. The sub-segments include Software, Hardware, DOOH Networks, Professional Services, Captive Networks, Content and Agency/Brand Firms. The Index is reported both for current (3Q 2009) and near term outlooks. Some of the information is quite interesting. To the surprise of absolutely no one, the most optimistic sub-segments (as measured by the sub-index level)were the software and DOOH Network firms. It is gratifying that there is not a disconnect between the two, which would be problematic. On the surprise side, the next most optimistic group were the Agency/Brand firms. This would seem to bode well for improved advertising activity in the space, and may in fact be the basis for the optimism of the DOOH Network owners. In any event, it is welcome news.

The welcome news continues as PRI reports current stability and planned growth in employment across the industry, along with very robust plans for capital expenditures. These two trends are certainly strong signs of optimism borne of increased business activity.

One notable tidbit in the detailed sub-segment data is that the Software and DOOH Network segments, while maintaining the highest overall indices, show a smaller percentage increase from the current quarter to the coming 3-6 months than several other segments. Rather than interpret that as tempered optimism, I think it may be that those two sub-segments are leading indicators, while segments such as hardware, professional services and content may actually lag a quarter or two, and are now in “catch-up” mode. The outlook of software companies is highly dependent upon the launch of new networks and the continued growth of existing customers. Most networks, in turn, tend to be highly dependent upon availability of capital and of course advertising activity. Both segments are difficult to forecast, especially with respect to timing. Hardware companies, on the other hand, depend upon actual commitments to develop forecasts that drive inventory decisions and manage their pipelines. Their need to be conservative in that approach combined with their strong outlook would lead one to believe that a lot of go-forward commitments are on the books. Overall, it certainly appears that the digital signage industry is bucking the downward economic trend, and sees a clear path to continued, vibrant growth.

PRI’s newly introduced NADS Index will prove to be a valuable tool for assessing industry trends. Industry players will find it useful for gauging their own outlook, while external players, including the financial community, are likely to use it to corroborate other data points when looking at investments in the industry. Kudos to PRI for stepping up and offering something of real value to the industry.