Insights and Issues | Programmatic Buying and DOOH Media
Can Programmatic Buying Make Digital Out-of-Home Advertising Easier to Transact?
NEW YORK, NY — Digital out-of-home advertising first started gaining momentum back in 2010, at that time, most network inventory was sold through a combination of direct sales and aggregation models. Aggregation had certain advantages that included increased network visibility with media planners, and it enabled ad campaigns to be purchased at scale. However, over time, most of these models proved ineffective, and as a result, many of the first-mover network aggregators failed
Now new players have taken the field that have the incentive to fix the medium’s transactional issues using a combination of solutions that include programmatic buying systems. Unlike the aggregators, which originated from within the digital out-of-home industry, major corporations and agency holding companies are backing several of these new players. This change is encouraging for the medium and could be the catalyst digital out-of-home needs to spark real revenue growth. Why the sudden interest from the agency world? Digital out-of-home advertising addresses two unique trends: localization and urbanization. Both trends, along with the medium’s reach and scale, have caught the world’s attention.
While programmatic buying has become commonplace for targeting online audiences, it’s a relatively new concept for the digital out-of-home media space. Developing programmatic systems for digital out-of-home is complicated and compounded by the fact that many aspects of online advertising don’t directly translate to out-of-home media. Programmatic buying needs data that systems can trade on, but a lack of common standards across networks, which include measurement and content delivery still need to be sorted out. Digital out-of-home media also has supply constraints; online media has an almost infinite supply of media sellers, that’s simply not the case with digital out-of-home. It’s also clear that not everyone is on the same page about the benefits of programmatic buying, many aren’t even aware this technology can be applied to this medium.
Programmatic buying can bring forth a range of emotions from stakeholders on the buy-side and sell-side of the digital out-of-home advertising industry. Those on the sell-side—media professionals, agencies and technology companies—point to the benefits of automation and increased efficiency in the buying process, which deliver greater opportunities for brands and the planning process. Ultimately, if a media channel can be bought programmatically, it will, however programmatic can’t replace everything. In theory, programmatic buying helps to make the planning process more efficient and frees up planners to think more strategically about brands. Custom media packages that include unique integration and sponsorships still need to be planned and bought directly.
Those on the sell-side, digital out-of-home operators are always looking for ways to optimize the value of their inventory. Most remain somewhat ambivalent about the real benefits programmatic buying provides for their networks. Many are concerned that programmatic buying will lead to the commoditization of network inventory. In the near-term, programmatic has the potential to sell unsold advertising inventory and provide incremental gains to DOOH network’s bottom line.
Removing Friction From the Buying Process
One of the great things about digital out-of-home advertising is that it’s hard to avoid. Unlike television, it can’t be switched off, Tivoed, or muted. But the most important audience of all—the agencies that plan and buy media—have been slow to recommend the medium to their clients. The reason has nothing to do with the medium’s effectiveness or the lack of interest by agencies and brands. It’s simply because the medium has been historically difficult to plan and buy.
The challenge to create an efficient buying process for digital out-of-home media is complicated. Most agencies use proprietary planning systems to buy media that are based on audience data, because the digital out-of-home space is relatively new, there’s a limited amount of audience data available to plug into these systems. As a result, it’s hard for agencies to consistently recommend digital out-of-home advertising to clients if planners don’t have the audience data to work with. Ongoing audience measurement has been underway by Nielsen of some of the larger digital out-of-home networks, and it has had positive effects for those specific networks.
Many advertising agency planners and strategists often view the entire digital out-of-home environment as a specialty. This has to do with the medium’s value as it relates to the real estate it occupies as well as its broadcast aspects. For these reasons, many agencies plan digital out-of-home media separately from the rest of the traditional out-of-home advertising market. In some cases, an agency may not be organized in a way that enables it to handle a digital out-of-home media buy. The agency may not have a dedicated division, which can sometimes lead to confusion regarding who is responsible for making the actual buy.
More than 70% of all advertising spending is still allocated to television, according to Magna Global. One of the reasons is that buying television is a relatively frictionless transaction—all of the pieces are already in place and brands are still asking for it. In contrast, buying mediums other than television is not that easy. Most media planners have limited resources and time to spend trying to deal with new and emerging media channels, especially if their clients are not yet demanding it.
Multitasking is a fact of life for most people today and it’s no different for those who plan and buy media. A recent study by Centro, a provider of media-buying software and programmatic solutions, gauged the efficiency and productivity in the digital media planning process and found that more than 85% of media planners were inundated with administrative tasks that prevented them from spending time on strategic thinking. The study also found that nearly half of media planners reported spending more than 4 hours per day responding or composing email, and more than 45% indicated they work more than 10 hours per day. Centro’s report focused on media buyers who plan online digital advertising campaigns. But considering the report’s findings and factoring in the current environment for buying digital out-of-home advertising, it’s easy to imagine similar inefficiencies.
In Machines We Trust: Data-Driven Buying
Two motivating factors, localization and urbanization, are increasingly driving advertising budgets as brands pursue on-the-go consumers. Location-based targeting enables brands to deliver messages across channels such as mobile devices and place-based digital out-of-home screens. Digital out-of-home screens provide brands with a level of granularity that can be defined down to a specific ZIP Code radius, and individual screens can be targeted using a screen’s unique IP address. Urbanization trends are also playing a role as population densities increase around city centers and it becomes more cost-effective for brands to reach city dwellers using urban media platforms such as digital billboards and place-based digital out-of-home networks.
Until recently, most media buys have been negotiated buys; however, media today is increasingly being driven by data and analytics. Programmatic buying, also known as automated buying, is helping brands and agencies buy media more efficiently using algorithms to analyze and automate the delivery of data.
Digital out-of-home networks have been able to access traditional out-of-home budgets within agencies through direct media sales. By connecting digital out-of-home inventory to programmatic platforms, media owners will be able to offer their unsold network inventory to buyers who control digital and television budgets. Programmatic also provides buyers with a more efficient way to buy across multiple networks.
Digital out-of-home advertising’s increasing scale and effectiveness has attracted new players to the space who have risen to the challenge of enabling the medium to be bought using programmatic systems, these companies include:
AdBidx runs an exchange that enables advertisers to target digital out-of-home messages based on demographics. Their technology, currently deployed by two major Australian billboard operators, uses biometric image recognition to serve targeted advertising in real-time based on a passer-by’s age and gender. AdBidx provides a Web-based dashboard that enables advertisers to plan, target, book, measure, and analyze their campaigns. AdBidx is based in Sydney and is currently targeting the Australian and Asian out-of-home markets with plans to expand into the Europe and the United States.
ADstruc’s media-buying platform automates the RFP process, enabling media buyers to transact with hundreds of out-of-home vendors across the United States. Their software is also fully integrated with Mediaocean’s Spectra for generating insertion orders and billing.
Bitposter’s outdoor media trading platform enables advertisers across the United Kingdom to reach a nationwide audience on more than 300,000 digital out-of-home and static billboards including roadside, transport and retail. The company recently announced a partnership with Rubicon Project enabling brands to purchase out-of-home advertising inventory, reaching 98% of the UK market, now available within Rubicon Project’s Orders platform. Rubicon Project’s Orders technology platform enables the automation of both traditional paper as well as digital out-of-home advertising trading. According to the company, the platform minimizes cost and time inefficiencies while ensuring maximum revenue and consumer reach for both media buyers and sellers.
Brandscreen recently expanded into digital-out-of-home media space serving networks across the Asia-Pacific region. The company is currently working with Adshel, Westfield and Executive Channel through a partnership with Cadreon, a division of IPG Mediabrands and Site Tour, a programmatic OOH provider. Brandscreen is based in Singapore and has an office in Sydney, Australia.
Kinetic will offer a new programmatic buying solution for both static and digital out-of-home media assets beginning in the first quarter of 2016 in the US and UK. According to Kinetic, their platform will leverage real-time data to inform campaign content, making the planning and activation process faster and more efficient. The platform will use of client data to deliver more precise targeting of nuanced audience segments.
MyAdbooker, a supply-side platform for digital out-of-home screens across the Netherlands has teamed up with Adform, an online programmatic buying and real-time bidding platform. The collaboration enables Adform platform users to enrich their online strategy with outdoor reach based on real-time information.
Site Tour’s web-based dashboard provides advertisers with data-driven geographical insight to purchase digital out-of-home media more efficiently. The company recently entered into a partnership with Cadreon Australia, a marketing agency, to automate the buying of digital out-of-home advertising at more than 100,000 sites across Australia from leading out-of-home media operators that include Adshel, Westfield Brandspace, and JCDecaux. The integration enables clients of TubeMogul’s demand-side video platform to buy ads on thousands of billboards, kiosks and elevator screens programmatically. Advertisers can target messages by panel, location and day part.
Vistar Media’s advertising platform enables brands to reach consumers based on their behavior in the physical world. Their platform utilizes geotemporal and proprietary geospatial data sets that enables advertisers to reach on-the-go consumers through mobile and digital out-of-home, and enables media owners to gain a deeper understanding of the audiences in view of network inventory. The company recently entered into a partnership with Posterscope to bring online-style trading to digital out-of-home media space. Posterscope will utilize Vistar Media’s real-time buying platform to offer brands access to premium outdoor inventory. Outfront Media and Lamar Advertising, who together operate more than 2800 digital billboards are also participating in the platform.
Xaxis Places is a real-time bidding platform that enables advertisers to reach audiences across digital out-of-home venues that include airports, cafes, and shopping malls. The platform enables messages to be targeted by daypart, by city, or by venue at more than 114,000 digital out-of-home screens, yielding over 1.4 billion impressions each month. Xaxis is part of WPP.
Programmatic makes buying individual ad messages more efficient and more accurate through the use of multiple data sets, and ultimately it will make it easier for agencies to plan and buy digital out-of-home media on behalf of clients. The medium has the reach and proximity to the point-of-sale that advertisers are looking for. Both location-based mobile and digital out-of-home media carry similar targeting and audience capabilities, the platforms can be bought in tandem, helping brands amplify their message.
Commoditization of network inventory is a concern for network operators; however, it should be noted that there is a finite amount of digital out-of-home inventory available, so advertising rates should not be negatively impacted.
Programmatic buying systems enable multiscreen strategies though which digital out-of-home media can be bought alongside television, mobile, and online media. In the end, we will judge the benefits of programmatic buying by the results it brings to the digital out-of-home media space. There’s big potential for advertisers to reach audiences at greater scale where multiple networks can be bought together using programmatic systems with reach that rivals television.