The interactive digital billboards are coming!

Inside the bustling Shinagawa train station, a futuristic-looking vending machine has replaced rows of drink bottles and cans with a 47-inch touch-screen monitor – when a person stands in front of the screen, a camera captures his image and a sensor determines the person’s gender and approximate age.

Based on that reading, the machine “recommends” drinks that fit the customer’s profile.

“With this machine, we can actually see who is buying what, instead of relying on educated guesses,” said Toshinari Sasagawa, general manager of sales at an East Japan Railway subsidiary that operates vending machines in train stations.

Japan is taking the lead in adding cameras and sensors to glean more information about who is looking at signs and electronic public displays—flat-screen monitors used like billboards—and is incorporating cellphone technology to make them more interactive.

The idea is to transform billboards and the like into sophisticated marketing tools that identify and target a specific audience.

NEC Corp., the third-largest maker of public displays, behind Panasonic Corp. and Samsung Electronics Co., is using facial-recognition technology that can determine how many people looked at a particular display, their gender and even their level of attentiveness.

NEC said the technology allows advertisers to gather hard data about the display’s effectiveness.

The company says its system can identify people’s gender correctly about 90% of the time and guess a person’s age within a 10-year range about 70% of the time.

“From a sponsor’s perspective, you don’t want to pay for something without knowing that people are going to see it,” said Tomoyuki Osaka, group manager of NEC’s digital signage group.

But the technology raises privacy concerns. There are no laws here to require camera-equipped signs to notify onlookers they are being photographed or rules for how they handle the information they capture as people pass by or stop to look.

“The problem is that there’s no clear regulation that prohibits those signage systems from storing images,” said Yasuhiko Tajima, a law and media studies professor at Tokyo’s Sophia University.

The protection of personal privacy depends too much on the conscience of each company that builds these signage systems, said Mr. Tajima, who leads a privacy-rights advocacy group called the Campaign Against Surveillance Society.

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