In the last decade, few industries have evolved as rapidly as advertising. With the expansion of digital avenues, from website ads to digital out-of-home (DOOH) solutions, the market is a far different place than it once was.
2020 had a measurable impact on advertising – and the effects of COVID-19 aren’t over yet. However, as the vaccination rollout progresses and the case numbers drop, the world of advertising is once again showing signs of life.
For out-of-home (OOH) and digital out-of-home (DOOH), these outdoor advertising mediums were one of the most impacted by this pandemic however both are set to play a big part in the overall recovery for advertising with OOH ad spend expected to grow by 20.2%.
To get a better understanding of this let’s look at the current state of this industry including challenges and available technologies that will play a big role.
What Is OOH Advertising?
Despite the recent resurgence in OOH strategies, OOH is actually one of the oldest and most traditional advertising mediums. While it’s currently most closely associated with billboards and bus station ads, the concept of posting information publicly for others to see dates back to cave paintings in the earliest days of humanity.
Most recently COVID-19 has disrupted the ways in which humans interact with the world however in non-pandemic years the average human spent around 70% of their time out of their homes. From work to school to commuting to shopping, most of life takes place outside the confines of a house or an apartment. For OOH, this is where it excels as a medium placing advertisements in front of these people as they get on with their lives.
DOOH is the new offshoot of conventional OOH marketing that relies on digital implementation and the power of advertising technology. This extends to any campaign that includes things like programmatic advertising, social media integration, attribution, and measurement capabilities.
OOH in the Wake of COVID-19
Few industries have escaped the negative effects of COVID-19. In a world in which consumers went weeks without going outside, the sales of OOH opportunities were significantly affected. The first half of 2020 results from OOH titan JCDecaux saw advertising revenue fall almost 65% – an enormous consequence to an otherwise stable brand. This trend isn’t unique, either; advertisers and advertising mediums of all kinds saw similar fall-offs.
However, advertising spend is expected to increase by around 20.2% in 2021, bringing spend to a comparable point to pre-pandemic productivity. Even though it may take some time for employees to fully transition back to working in an office or for consumers to return to traditional hobbies and activities outside the home, the future is bright – where digital is concerned, at least.
The growth expected as 2021 progresses is almost unilaterally predicted to take place on digital platforms, shifting the primary ways in which OOH advertising functioned before COVID-19. This won’t necessarily replace outdoor advertising as it has previously existed, but rather improve and streamline the existing form by adopting DOOH capabilities. With the benefit of audience-driven insights, advertisers can better allocate their spending for heightened results in a more targeted manner.
The Challenges Facing OOH Advertising
OOH and DOOH advertising solutions are expected to see a steady increase in growth in the coming months, but that doesn’t mean it will all be smooth sailing. There are a number of complications both advertisers and advertising platforms will need to note as they move forward.
- Geography-Based Business: OOH advertising is very geography-driven, with products and services showing up on bus benches and car tops relating specifically to local opportunities. This requires vendors to improve their charting technology in order to ensure advertising reflects real-time availability. A special or sale that has ended, for example, is a bad way to boost business. This leads to management and optimization challenges, something facing as many as 36% of advertisers.
- Inflexible Media Opportunities: Many OOH contracts are for a fixed period, generally around four weeks, particularly for static units. With a posting period lasting just a few days and production costs that are sometimes included in a media budget, advertisers are relatively locked into their choice of advertisement – even if needs should change. High costs are an issue here, too; around half of advertisers report costs putting up barriers in advertising through this kind of channel.
- Partnership Problems: The pool of OOH possibilities can be quite small in some regions, leaving advertisers to choose from a limited supply of opportunities. This can create all kinds of logistical hurdles; 44% say they struggle to find the right partner to work with.
- Unproven KPIs: KPIs drive the advertising market. Advertisers and platforms want to ensure they’re getting the most bang for their buck, so metrics like ROI are extremely important. However, some are concerned about unproven KPIs and limited analytics capabilities in regards to OOH options, leaving them wary about an increased investment.
Moving Forward with OOH and Programmatic DOOH Advertising
While there are challenges for OOH and DOOH advertising the future for this medium appears to be bright. Brands can certainly feel confident using this medium as part of an omnichannel strategy in 2021 and beyond. With careful consideration, they can choose the best OOH solution for them.
To see best results, brands can:
- Determine analytic capabilities prior to choosing an OOH partner, including KPI relevance and accuracy
- Research into programmatic opportunities to ensure ads are timely and relevant
- Ensure allocation of marketing spend to OOH is adequate to meet all objectives
- Determine strategies that aren’t time-sensitive or have the potential to deliver strong results through the entirety of a campaign
There are plenty of reasons for advertisers to embrace this way of doing business. Many advertising professionals feel that the potential for reach and KPIs with DOOH are stronger than with other forms of advertising. In addition, over 90% believe that DOOH offers improved brand metrics and funnel metrics – this bodes well for the medium in a post-COVID-19 world.