By Chadi Borghol
One of the first advertising channels to emerge, out-of-home (OOH) continues to stand the test of time. Even with the rise of audio, online, mobile, and CTV advertising, the global digital-out-of-home (DOOH) market is expected to reach US$35 billion by 2027, according to a Research and Markets Report.¹ The medium has steadily grown year over year, evolving to keep pace with modern times via inventory digitization and a transition to programmatic—automated buying and selling. These developments, coupled with increasing interest in OOH post-pandemic, have prepared the medium for its next phase of growth, just as the advertising industry undergoes a major transformation.
A go-to strategy for media buyers in recent years, third-party targeting is losing steam between the impending demise of the cookie, consumer privacy concerns, and stricter government regulation. Diminishing returns from campaigns built on the practice have brands and media buying agencies rethinking their campaign approaches. Indeed, many are refocusing their attention on OOH as a medium to reach a larger swath of populations with contextually relevant content. To keep pace with the demand, OOH ad tech companies are advancing programmatic capabilities to ensure more buyers can take advantage of the medium. Together, these events are driving OOH to a more prosperous future.
Looking to the past to understand the present
Uncovering future OOH opportunities requires a brief reflection on the past and present. Historically, advertiser goals have fallen into two distinct camps: ‘make them love us’ ads to inspire brand loyalty, and ‘make them buy us’ ads, which aim to directly influence purchasing decisions. Non-addressable ‘make them love us’ ads are popular amongst brands with wide appeal and often surface on TV and OOH displays. Addressable ‘make them buy us’ ads include a call to action and are typically measurable. Although popular, addressable ads are highly competitive to land, as they target audiences on an individual basis versus a mass audience. The introduction of the third-party cookie—a small text file that keeps track of a person’s online activity to create a profile—in the ‘90s gave rise to addressable advertising, making it easy to hyper-target people. It took off quickly and has fueled online advertising since. However, in recent years, consumers have become increasingly concerned about how this data is collected, stored, and used, prompting some to question the ethics of the practice.
Addressing the addressable media dilemma
Nearly 75 per cent of media is addressable and, although it has been beneficial for third-party audience targeting, brands are paying way more per impression and driving up costs. Increased competition has made the medium less accessible for smaller brands or has only allowed them to buy sub-par inventory with their budget. Potential consumers can tick many boxes, making competition for their business fierce—even between seemingly unrelated verticals.
As such, addressable advertising may make sense for selling more expensive merchandise like a luxury vehicle, but the ROI just is not there for smaller staples. As more brands are waking up to the realization that third-party targeting is no longer the treasure trove it once was, OOH is gaining a more prominent role among online, mobile, and TV in the omni-channel ecosystem.