If you take a look around, digital billboards are placed everywhere–they’re in metropolitan areas, on roads, and even in shops. The advertisements placed on these billboards are big, loud, and most importantly, effective in catching your attention. But have you ever wondered how they work?
In the past, companies had to coordinate with multiple partners that were willing to display their ad campaigns through formalizing a contract and setting a definite budget. However, with the introduction of programmatic digital out-of-home (pDOOH) the process has been streamlined and simplified. Programmatic digital out-of-home is the underlying mechanism behind these digital advertisements. It is the automated process of buying, selling, and delivering ads through a demand-side platform (DSP). There are no set commitments, no prior connections needed, and no minimum budget. But let’s break this down. What really is programmatic out-of-home?
What is programmatic out-of-home (pDOOH)?
For digital out-of-home ads to be displayed, companies must first determine what kind of media they want to display. This could involve adapting pre-existing advertisement campaigns to fit a digital out-of-home display or coming up with new ideas altogether. After that, the company will set specific conditions under which they want to buy a DOOH ad slot. But what do we mean when we refer to ‘conditions’?
There are virtually no limits to conditions under which a digital out-of-home ad slot can be bought but examples of common conditions include a certain time of the day, weather, or the target audience. Layers of external data will then track real-time activity to look out for these conditions. When they are present, this will then trigger a purchase. Companies can even set multiple conditions to really hone in on a specific audience.
The final step in programmatic digital out-of-home ads is finding a suitable demand-side platform (DSP) to work with that will support their campaign. Simply put, this means finding and buying an ad slot from the companies that control these billboards ads which can be done in many different ways.
One way is through open real-time bidding where an open ad slot is offered to a pool of companies and brands who place bids according to how much they think the slot is worth to them. From there, the system will assign the slot to the highest bid and display their advertisement. This method is the most common as it is easily accessible and does not require a prior relationship between the company and the media owner. With that being said, this type of bidding is highly competitive as three are many brands and companies fighting for limited ad space.
Besides real-time bidding, there is also private deal or real-time buying. This is where companies that control these billboard ads reach out to brands and offer a programmatic ad slot. For this to occur, there is typically an established relationship between the ad company and the brand or the brand garnering the reputation of a premium buyer through repeated transactions.
Finally, another way companies find ad space is through a programmatic guarantee where a media owner and buyer will create an agreement. Whenever the DSP offers the company a slot that meets a certain set of criteria, the ad slot will be bought.
Pros and Cons of Programmatic Out-of-Home
Now that we’ve discussed what programmatic digital out-of-home is and how it works. Let’s highlight some pros and cons.
As previously mentioned, programmatic digital out-of-home is highly convenient. It cuts down the time and overall process companies have to go through to display their ads and target them to specific audiences. However, it is also flexible. programmatic digital out-of-home allows the option to pause or change a campaign at any moment–nothing is set in stone.
One of the biggest advantages of programmatic digital out-of-home ads is the size. The displays that these advertisements are placed on are much greater in scale than online or mobile ads. Look at it like this. Between your phone and the plethora of screens in Time Square, which advertisements are more appealing? Because digital out-of-home ads are much more appealing and in-your-face, the ads that are placed on these billboards cannot be skipped and are much more memorable. You can download an adblocker to bypass advertisements on your phone or computer, but there is no adblocker for real-life situations. Programmatic digital out-of-home ads can also be used to supplement pre-existing ad campaigns. Although it has been seen that they are effective on their own, they can make an even bigger impact when used together.
Finally, one of the most notable impacts of programmatic digital out-of-home is that it takes on a ‘one-to-many’ medium where one single ad can reach many people. This means that not only are you reaching your target audience, but it is likely that you may even be able to attract new customers due to the nature of the advertisement.
With all the benefits of programmatic digital out-of-home, there must be a catch, right? It is important to bring up the fact that these advertisements are a costly purchase due to the many layers of data it requires. In addition, ad slots are not guaranteed. As previously mentioned, competition is high with little room for programmatic buying. This means that high bids and having some degree of contact with the companies that control these billboard platforms are vital to being able to display your ad campaign.
Another downfall of programmatic digital out-of-home is that it is difficult to track impressions. Because it takes on a ‘one-to-many’ approach, there is no definitive way to determine exactly how impressions it generated. However, companies and brands have discovered different ways to bypass this problem. Many companies have gone the route of comparing their KPIs before and after a campaign to take note of any changes. Another method that is commonly used is by incorporating campaign-specific identifiers such as QR codes within the ad. If someone inputs or scans the code, you can be sure that they were able to spot your ad. Nonetheless, it remains difficult to definitively determine the exact number of people that saw the advertisement.
Uses of Programmatic Digital Out-of-Home
As previously mentioned, one of the most innovative and sophisticated aspects of programmatic digital out-of-home is the platform’s ability to access the valuable data that is necessary for creating more precise and accurate marketing campaigns. As a matter of fact, one of the most important differentiating factors between digital out-of-home and programmatic digital out-of-home is the abundance of data that is used.
The marketing industry is very familiar with standard Digital Out-of-Home advertising methodologies, such as billboard postings in shopping malls, airports, hotels, and central areas of a city. However, the major flaw that comes with the standard digital out-of-home ads is that they are not targeted to specific groups of people who are most likely to show interest in the billboard. Instead, they follow a more generic method of displaying an advertisement to just about anyone that can see them. Although such a strategy could still potentially yield results, it can prove to be very time-consuming and costly at the same time, with no guarantee of results.
With programmatic digital out-of-home, traditional digital out-of-home advertisements are enhanced by targeting specific audiences. Targeting specific audiences is applied using a number of different strategies–one of the most powerful tools being the ability to geofence locations. The significance of geofencing locations is that it helps locate and track visitors based on their mobile device location history. This process works by marking locations and areas in order to locate potential visitors based on their mobile device location history and data. Geofencing utilizes a mobile device’s data such as the path an individual takes frequently or their favourite shopping centers in order to display an advertisement.
Another beneficial feature that programmatic digital out-of-home offers are that buyers on the Demand Side Platform (DSP) can build custom audience data in accordance with their preferences. If the specified criteria are met, the content will trigger a purchase and display the advertisement on a digital billboard. The custom audience data can include virtually any piece of data, such as the weather throughout the day, the age of the consumers, the conditions of the market, or even the outcome of a sporting event.
The Application of Programmatic Digital Out-of-Home
To demonstrate, let’s use a real-life example. Let’s say that a beach club in Miami is hosting an event, and the buyers on the DSP have built custom audience data in order to have their digital billboards appear to their ideal target customers at an ideal time. The buyers could include a variety of data, such as the desired age range, and desired weather, in order to maximize their chances of acquiring their targeted customers. They can also add an option of triggering the content only throughout the specific times of the day, and so on.
The beauty of programmatic out-of-home lies in its convenience as well as creativity. In essence, think of programmatic out of home as a negotiation between a human and a computer. However, it is important to mention that, over the last several years, programmatic digital out-of-home has become more commonly used by some quite impressive brands in the business industry and is quickly becoming a common marketing strategy of many companies all around the world.
For example, a giant name in the coffee industry, Starbucks, has recently been using a programmatic out-of-home strategy in order to better capture the attention of their target customers. On rainy and cold days, many digital billboards will showcase a variety of hot drinks that Starbucks offers. However, on hot summer days when the sun is shining and people are headed to the beach, a passerby would notice that the digital billboards are displaying a selection of Starbucks’ cold drinks. A wildly famous automobile company, Suzuki, has also recently turned its attention to programmatic marketing.
There is a reason as to why the largest corporations in the various industries have chosen to implement programmatic out-of-home advertising– because it simply works. According to a recent study done by Nielsen, approximately 49% of consumers notice and observe digital billboard advertisements that they see on the streets, and of the 49% of people, approximately 65% end up visiting the advertised business facilities.
However, in the fast-paced and rapidly evolving world full of advertisements, the success of a marketing campaign largely depends on a brand’s ability to stand out and differentiate itself from its competitors, and although programmatic digital out-of-home is a convenient and an effective way of improving brand image, it has to be noted that the results yielded largely depend on how the programmatic out of home will be implemented by a given business.
As previously mentioned, many businesses and even large corporations all throughout the world have already been implementing programmatic digital out-of-home, which suggests that it is next in line as the go-to marketing tool. This means that as more and more businesses start utilizing programmatic out-of-home advertisements, the gap for authenticity will start to narrow, and because of this, businesses will need to use programmatic digital out-of-home in order to showcase their marketing creatives and convert bypassers into consumers.
To put it simply, the main ‘wow factor’ of programmatic out-of-home is its unbelievably convenient management system as well as it being an effective method of advertising. This means that it allows virtually any buyer into the stream of digital billboards. However, as mentioned above, there are certainly some limitations that seem to present issues for many of the buyers, such as the premium costs of digital billboards as compared to the less than satisfying digital space they receive in return. Finding good placement for an ad can also be quite difficult, and adding extra layers of data for a more accurate target audience will undoubtedly result in a costly investment for any business.