The OOH industry is in the midst of a renaissance, fueled in part by direct-to-consumer (DTC) brands ramping up spend. But, many advertisers are missing out on OOH’s full potential by treating it as a brand awareness play rather than leveraging new targeting and measurement capabilities to launch performance-driven campaigns.
The out-of-home (OOH) advertising industry hasn’t seen growth like this in more than a decade. In Q2 2019, OOH revenue grew 7.7 percent compared to the same period in 2018, reaching $2.7 billion, according to the Out of Home Advertising Association of America (OAAA). While all OOH channels experienced growth, digital OOH achieved the biggest increases, accounting for 31 percent of total OOH revenue.
DTC brands account for an outsized percentage of OOH revenue. These businesses are increasing their national market budgets, spending more on both TV and OOH. In the first half of 2019, DTC OOH spend was up 7 percent, to $4.6 billion. But, many of these advertisers are making consequential mistakes in their OOH approach. For starters, they are failing to leverage data and new technologies and to connect OOH to their digital advertising to create innovative, omnichannel campaigns. Let’s take a closer look at new OOH capabilities, as well as the common mistakes DTC brands are making.
An increasing percentage of OOH inventory is bought and sold programmatically, which allows buyers to deliver ads at specific times and to refresh creative quickly depending on a variety of factors, including location, time and audience data. New buying platforms are purposefully designed to look and feel like digital ad platforms. Examples include AdQuick, a simple online platform that allows users to plan, buy and measure outdoor advertising; the Rubicon Project Exchange, a private marketplace for digital billboard inventory; and Adelphic, a self-service platform for cross-channel programmatic advertising that includes OOH. So, a funded DTC brand can now buy OOH just as easily as they can buy digital advertising.
Platforms like these include sophisticated targeting and measurement capabilities. OOH advertisers can use DMA and demographic data in their targeting, the same way they do with digital placements. This means OOH can now be treated as an upper-middle funnel strategy, rather than a top-funnel only tactic.
Part of the reason OOH spending is on the rise is because the digital advertising ecosystem is so cluttered, and advertisers are eager for new ways to reach their audience. This is particularly important in crowded spaces, like DTC. But rather than treating OOH and digital as separate initiatives, marketers can get more value from both channels by combining them. DTC brands should use OOH as a powerful first touch. Then, they can retarget the exposed audience with subsequent digital advertising. Next, marketers should use new measurement and attribution capabilities to track the behavior of the OOH-exposed audience and compare it to users who did not see the outdoor ad. This will allow them to measure conversions, such as app downloads or web traffic, and to determine how OOH is affecting audience behavior.
DTC brands like Casper, Boxed and Vital Proteins are smart to invest in OOH. But, many are not leveraging technology advancements in the space. Let’s consider some common mistakes – and how to avoid them using advanced OOH technologies.
On the back of a successful seed round, DTC businesses often plaster subways and roadsides with ads. These are ego buys. Sure, the ads will make investors and employees feel good, but for growing brands that don’t have widespread name recognition, it makes more sense to use location-based and behavioral consumer data to precisely target customers and drive actual performance. In other words, it is time to move past the old-school “spray and pray” model.
OOH is not only a brand awareness play, but it is not a pure direct response (DR) tactic, either. Marketers can’t take a “dollar in, dollar out” approach, especially when promoting high-ticket purchases with long buying cycles. Brands should be realistic about their OOH expectations.
Obviously, young DTC brands don’t have the same budgets as large CPGs. So, they often try for small tests before going full throttle. That is smart, but they need to be sure to buy enough impressions to draw meaningful conclusions. A four-week OOH campaign flight is akin to testing Facebook advertising with a short, $100-a-day campaign.
Marketers are expected to move the needle for the business. Failure to do so, in a measurable way, results in a marketing proof gap — “the gap that exists in the minds of the C-suite between what marketers say about their impact and the sort of objective computed ROI that many leaders expect,” as defined in a Forbes article by Mark Stouse, CEO of Proof Analytics.
That has long been the problem with OOH. Marketers were lucky if they got CPM data from their outdoor campaigns, but that is no longer the case. Today, OOH measurement is more accurate than many other media, with some platforms tracking viewable impressions: impressions that were actually viewed, as opposed to those that could have been viewed. Marketers can also derive meaningful conclusions by coupling OOH with digital retargeting and comparing the OOH-exposed audience to those who didn’t see the outdoor ad.
Data privacy regulations and policies are changing. To protect user privacy, companies are limiting the ways in which they use customer data, including mobile location data. In the future, advertising may become less targeted. So, for growth-focused DTC brands, now is the time to leverage OOH to reach precise audiences.
DTC brands are buying OOH, but they are missing out on the space’s true potential by not taking advantage of new targeting and measurement capabilities. Understanding how the space has changed will help them use OOH in tandem with digital to create powerful marketing campaigns that generate measurable impact.
James Heller is Cofounder & CEO of Wrapify.
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