Underlying Fundamentals Suggest DOOH Media Is Poised for Exponential Growth
NEW YORK, NY — Structural changes often begin gradually and accelerate as fundamentals change and form new catalysts for growth. This has proven true for the digital out-of-home (DOOH) media space.
DOOH media space has seen more than its share of change; mergers and acquisitions happened at a record pace in 2015, and the trend shows no sign of slowing. A strong equity market combined with low interest rates created an environment conducive for companies to execute acquisitions. Consolidation is also good for advertisers because it makes it easier for brands to plan and buy the medium at greater scale.
Barriers that have created friction to the medium’s adoption have also fallen away. DOOH media’s improving fundamentals embrace better measurement standards, innovative ad serving technologies that include dynamic content driven by real-time data, and recognition by advertisers of location as a factor in marketing campaigns.
One of the biggest indicators of DOOH media’s growing relevance to the media landscape is the recent introduction of the Digital Out-of-Home Buyer’s Guide by the Interactive Advertising Bureau (IAB). The Guide is aimed at helping brands and agencies understand the opportunities DOOH media delivers, including an overview of formats; standards and measurement; integration with mobile and interactive technology; and the medium’s distinct advantages in targeting by audience and location.
The Interactive Advertising Bureau’s DOOH Guide marks a significant milestone for DOOH media in terms of exposure with media planners, brand strategists, and the larger advertising ecosystem. The IAB’s recognition of DOOH media proves that the medium reaches a real audience that’s worth targeting, and ultimately this will influence brands to shift more dollars from online and mobile to digital out-of-home network screens.
Proving a new medium’s value to advertisers is no small feat—it takes a sustained effort over time. There are several initiatives currently underway by the Outdoor Advertising Association of America (OAAA), Traffic Audit Bureau for Media Measurement (TAB), Nielsen, and the Media Rating Council (MRC) to standardize and align DOOH media with television, online, and mobile. The IAB’s Guide also helps to correct misconceptions about the current state of digital out-of-home measurement and the medium’s effectiveness.
Meanwhile, brands are taking notice. According to eMarketer, advertisers in the United States spent $2.96 billion on digital out-of-home advertising in 2015. Digital represented more than 40% of total out-of-home ad spending, up from 38% in 2014. By 2018, DOOH media is projected to capture 53% of total OOH ad spending in the United States, or $4.08 billion.
We’re Just Getting Started
The foundation for many of the transformative technologies we’ve grown accustomed to using today was first set in 1989 with the birth of the World Wide Web, which marked the start of the information age.
No one could have imagined what would come next.
A wave of innovation soon followed: Google launched in 1998, Bluetooth in 1999, and social media became mainstream in 2002. YouTube was born in 2005, and the iPhone was introduced in 2007. Each upended business models and transformed consumer behavior; however, no innovation has had more direct impact on media than digitization.
Digitization is transforming the out-of-home (OOH) advertising space into a vibrant new media channel (DOOH), providing advertisers with greater flexibility and location-based relevance to deliver messages that are unmissable and unskippable.
As new technologies are introduced, the overall cost to transition traditional static boards to digital has decreased. The economics have also improved for “digital first” companies to deploy new DOOH media networks. Digitization of traditional media will continue to gain even greater momentum, according to a report by PricewaterhouseCoopers, as established media owners are able to vastly increase their revenue by displaying multiple ads in the same physical space.
The digitization process is beginning to reach critical mass, with more than 1.25 million active digital out-of-home screens in shopping malls, airports, cinemas, convenience stores, gas stations, and stadiums. There are more than 164,968 billboard locations across the United States, and according to the OAAA, 6700 have been converted to digital as of August 2016, leaving plenty of room for additional growth.
It’s worth noting that digital will never entirely replace traditional media. Some brands will always prefer static posters to showcase products. This is particularly true of luxury brands that want the rich quality traditional printing offers, so mixed media models will likely remain the norm since they provide advertisers with the broadest range of options.
Media With Reach and Impact
The true impact of DOOH media on consumer behavior is becoming evident. Research by the OAAA has revealed that consumers are more likely to go online with their mobile device to engage in social media, search, and shop within 30 minutes of seeing an out-of-home ad. Digital out-of-home networks are uniquely positioned to intercept consumers as they move through their daily routine, and many have integrated mobile interactivity. The OAAA’s research also revealed that exposure to outdoor advertising has increased significantly. People now spend on average more than 70% of their time outside their home, driven in part by greater access to mobile devices.
Urbanization trends are also increasing exposure to DOOH media, according to U.S. Census data. More than 80% of Americans live in urban areas (which includes suburbs), with approximately half residing in cities with populations over 50,000. This is one of the catalysts behind the Smart Cities initiative. New York’s LinkNYC program is projected to grow into one of the largest DOOH media networks in the world with the added benefit of connecting people to ultra-fast WiFi. Watch for cities around the world to emulate LinkNYC.
DOOH media is indeed poised for exponential growth. Consumers are demanding greater value from advertisers in exchange for their attention, and advertisers are demanding greater proof that their dollars are reaching the right audience. DOOH is sitting in the sweet spot because it satisfies both.
Free Trend Report: Why Location Is the New Currency of Marketing
Finding effective ways to deliver branded messages in today’s complex media environment is one of the biggest challenges facing advertisers. Traditional methods of advertising have become less effective as consumers spend less time in places where marketers have traditionally had an advantage in reaching them. In addition, consumer attention has fragmented across multiple channels as media options and device platforms increasingly diversify.
Active consumers spend money, and while they are going about their daily routine, they are also actively looking for information. According to Google, more than 50% of all mobile searches have local intent, and 17% of search happens while consumers are on the go.
Digital Out-of-Home (DOOH) advertising, also known as Digital Place-based (DPb) media, utilizes strategically placed, networked digital signage displays to reach on-the-go consumers while they are outside of their home with highly targeted messages. Location-based mobile and digital out-of-home media are part of a larger multiscreen ecosystem that effectively amplifies brand messages to create a deeper level of engagement with active consumers.
Why Location Is the New Currency of Marketing is aimed at CMOs, media buyers and strategists and provides insight into why marketers are increasingly shifting their advertising dollars to these rapidly emerging media platforms.
Highlights from Why Location Is the New Currency of Marketing include:
- The Connected Consumer
- Leveraging the Moment
- Multiscreen Campaign Planning
- Amplifying Reach With DOOH Media