May 9, 2024

We're still at the top of the programmatic OOH hype cycle

Nick Moutter, CEO at Lift asks what needs to happen before the new promised era of Programmatic OOH arrives...

Last year, to enable automated trading, we witnessed the first steps towards the launch of a 10-digit code for every UK outdoor advertising frame.

This was met with much fanfare from the industry, proclaiming it a new era in programmatic ready to transform the out of home (OOH) market. And yet, whilst OOH experiences a resurgence as a result of global urbanisation, the promise of programmatic for this channel is still to materialise.

In the UK alone, OOH ad spend is expected to hit £1.15bn by 2020, with digital revenues accounting for almost a quarter of this. The benefits of digital out of home (DOOH) are clear: it can deliver localised, geographically-relevant messaging, is impervious to ad blockers and back buttons, and with its physical size, represents an unrivalled opportunity for truly creative advertising.

The appointment by Clear Channel Outdoor Americas - one of the world's leading outdoor advertising companies - of its first head of programmatic, indicates that automated trading is high on the agenda in the OOH sector.

However, in spite of the hype, many advertisers and agencies remain reluctant to adopt an automated approach, and the industry is still a long way from realising the full potential of programmatic OOH. So what are the barriers, and what must happen before this promised new era of advertising arrives?

The relatively slow pace of technological development is the first hurdle to cross. Although many companies are developing and testing solutions for the automated trading of DOOH - such as Dentsu Ageis' platform for digital advertising, and Google's DoubleClick billboard trials - there is as yet no universal trading system in place.

Furthermore, the data collected on OOH audiences is currently limited. The nature of OOH advertising means that it is most frequently served to groups rather than individuals - limiting opportunities for hyper-personalisation - but aggregate data is still necessary to improve targeting and shift from a trend-based to a real-time approach.

For programmatic OOH to move forward, media companies must enhance their data collection capabilities, and standardise and share their already extensive data pools, allowing advertisers to make full use of the micro-regional targeting opportunities on offer.

The lack of available inventory also hampers progress for programmatic OOH. Opportunities for DOOH advertising are already minimal compared with online, and so far, only a portion of inventory is available to buy programmatically.

The sell-side needs encouragement that automated trading will bring the benefits of reduced wastage and increased revenue, whilst maintaining premium value - rather than commoditising inventory - as an exclusive result of OOH's limited availability.

Although it has already begun with the launch of the 10-digit codes, known as SPACE, the industry must work in unison to devise an industry-wide framework of inventory and formats.

The final obstacle is a lack of standardisation in the tools and metrics used to measure programmatic OOH's performance, making it difficult for advertisers to see transparent results. Limitations in digital infrastructure further complicate measurement capabilities; Wi-Fi connection times on the London Underground, for example, are often more than the time it takes for a train to arrive.

This results in a mobile data black spot that conceals accurate viewability rates. As we move towards smart cities with enhanced infrastructure and connectivity this is likely to become less of an issue, and technologies such as beacons will make it easier to understand the performance of OOH advertising, providing valuable data to further optimise campaigns.

As the challenges of technology, data, inventory, and measurement are gradually resolved, adoption of programmatic OOH will inevitably increase. As this occurs, agencies, brands and ad tech companies must work closely together to ensure the data-driven aspects of programmatic work in sync with the creative capacity of OOH, preventing any decline in the quality of ad creative - the effects of which we are now working hard to reverse in the world of online advertising.

Each new development in the ad tech world takes time to manifest, and programmatic will undoubtedly form part of the future of OOH advertising, once the various barriers are overcome. While we're still only at the top of the hype cycle, a collaborative industry-wide approach to technology and strategy is the only way to ensure that we are collectively ready for the programmatic OOH movement when it finally arrives.

Want to get in touch?

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.