Digital out of home (DOOH) is thriving, with global spending on track to reach $23 billion by 2023 – a figure the market will likely surpass with its transition to programmatic already underway.
Simplifying how DOOH ads are bought, sold and displayed, programmatic is quickly making the medium more accessible to the digital advertising community – opening up new financial, operational and creative opportunities for publishers, buyers and brands. From a CFO’s perspective, it’s leveling the digital playing field, spurring new growth that will increase DOOH’s overall profitability and market share.
Exploring the programmatic OOH advantage
Automated buying and selling in DOOH presents a number of financial, operational and creative benefits for the entire digital advertising ecosystem. In the case of the publisher, programmatic tools automate traditionally labor-intensive tasks and enable more targeted, data-driven campaigns, for which advertisers are more likely to pay a premium. Taking such a targeted approach opens up new inventory and allows sales teams to secure buyers to fill those slots. For example, earlier this year, Peugeot tapped traffic data to programmatically buy ads that ran on roadway billboards only when the specific audience they were looking to target was most likely on the road, freeing more slots for publishers to sell.
In terms of digital buyers, a majority are already making online and mobile ad purchases programmatically, and automated DOOH buying and selling makes it easier to integrate DOOH into multi-channel campaigns from the start, as opposed to requiring separate buying, targeting, optimisation and reporting processes. Having the ability to more easily plan and execute multi-channel campaigns opens up new creative opportunities that are attractive to advertisers and brands, helping media buyers retain and attract new business.
Looking at brands and advertisers, programmatic lowers the cost of entry to DOOH and makes pricing more transparent. Companies and in-house teams, for whom DOOH advertising may have been previously out of reach, will now be able to embrace a format that has been shown to positively influence buying behaviors. For instance, a two-person in-house team from international food delivery and pickup service Foodora recently ran a series of programmatic campaigns including DOOH ads and saw an increase in their new service offering, which they could directly attribute to the programmatic campaigns.
Moving the needle forward
Although DOOH is in the early stages of its programmatic journey, it’s evolving rapidly. Industry associations across North America and Europe are investing in DOOH measurement standards while emerging technology is making it easier to repurpose existing digital creative for DOOH. In the last year we’ve seen the release of new tools that automatically adjust print, web and mobile creative to fit a variety of digital screen- types and sizes. At the same time, we’re seeing more static inventory being converted to digital. Together, these developments are fueling the demand for programmatic DOOH.
To capitalise on the medium and optimise the new revenue channel, however, all parties involved in the transaction will need to rethink their internal structures. This will require leadership support from the top down. CFOs will be instrumental in guiding the transition, from evaluating the potential business impacts of programmatic DOOH to shaping an optimal rollout strategy. Key areas that the CFO will need to drive and influence include:
– Ensuring publishers’ first party data collection practices meet industry standards. Programmatic is built on an audience impression-based currency and publishers with reliable and verifiable audience data will be able to best maintain premium CPMs.
– Adapting to the programmatic ecosystem’s contracting standards. The programmatic ecosystem has established protocols when dealing with disputes between publishers, DSPs and agencies. DOOH publishers will need to develop new procedures to reconcile impression information between their systems and the DSP systems.
– Adjusting risk management and credit policies to the new channel. More specifically, publishers will need to implement procedures to vet demand side partners and the agencies they represent to ensure they align with the publisher’s “know your customer” practices and policies.
– Making structural changes within the organization to accommodate the ad operations role whose responsibility is to plan, deliver and report campaigns to DSPs. Publishers can either opt to source this capability in-house or outsource it.
– Providing sales teams with training on how to sell into the digital ecosystem.
– Altering reporting practices to landlords for the new revenue channel.
– Reconsidering billing procedures to accommodate programmatic DOOH and implementing effective policies and controls to monitor and manage the channel.
Managers will have to similarly consider how programmatic DOOH will change the nature of their operations and invest in new technology and talent, as well as implement training to bring their teams up to speed. Education at all levels will be crucial, especially as new programmatic technology and audience measurement standards for the medium evolve.
Automated media buying and selling may have just begun in DOOH, but activity is growing exponentially each month as media buyers, sellers and brands begin to recognize the cost efficiencies, new revenue opportunities and creative benefits it poses. With its continued progression, increased overall DOOH spend is likely to soar, priming DOOH to become a larger part of the overall digital advertising conversation.