First, not every encoding platform has the same settings. Given that, I’m going to focus on the settings all platforms should have. If you are not sure what app to utilize to encode your video, give Handbrake a try. It's free: HandBrake: Open Source Video Transcoder
 
1080 vs 720 Question - Should you encode to 720p or 1080p? In many cases 720p will look good and worth a test on your display. If you can get by with 720p, this can make the video decode VERY efficient and run well on low end player devices and integrated SoC solutions that run within a display.
 
H.264 Video Compression - H.264 is the best choice today because of its widespread hardware-accelerate support. H.265 is getting more popular but may not be supported on your hardware. 
 
MP4 Container Format - MP4 is the best container format for broad industry support. It’s based on Apple’s MOV format, but adds support for other MPEG features.
 
Ideal Bitrate – This depends on your choice of 1080p or 720p
     720p – 2500 kbps is a good starting point. If quality is not high enough bump in up to 3500 kbps
     1080p – 5000 kbps is a good starting point. If the quality is not high enough bump in up as high as 6000
 

Frame Rate – Chose 30 fps
 
Slow Preset – Set the encoding to “slow”. If you are in a rush, you can chose a faster setting. However, a slow preset will get better quality and better compression.
 
2-Pass Encoding – For best quality and file size chose 2-pass. It takes more time but worth it.
 

There are more settings you can make of course. However, but if you do the above, you will have very good results for video running on your digital signage!