“If you want to buy a campaign over a digital signage network today, you have to make 50 different phone calls.” Jose Avalos, Intel.
What is programmatic buying for DOOH advertising?
Programmatic has been creating quite the buzz in the out-of-home (OOH) industry for the past few years. Countless discussions and debates have been held amongst industry leaders and experts, yet differentiating between marketing hype and the real deal can be quite complex. Many proclaim they have the best programmatic solution, but what criteria is used to define them as such?
Put simply, programmatic is a way for buyers and sellers to find the best deals based on predefined audience requirements, such as demographics, time of day and location. Once the right audience becomes available, the purchase is made automatically, without human interaction.
The process occurs through demand-side platforms (DSPs) and supply-side platforms (SSPs) that connect publishers (media owners) to agencies. Rather than going through a lengthy, error prone RFP process, advertisers can see available inventory in real-time.
This easy and shortened sales process has caught advertisers’ attention. According to a survey by the Digital Place Based Advertising Association (DPAA), the majority of planners said they would be more likely to recommend digital out-of-home (DOOH) ad space if it could be purchased programmatically.
In order to find the optimal solution for your network, is it important to consider how programmatic is used in the DOOH industry as well as to determine which SSP is the ideal fit for your business needs.
How programmatic DOOH helps access new revenue.
Media owners must realize that those buying programmatically are not just those currently contacting sales teams directly. Programmatic is more than a way to obtain a bigger portion of yearly DOOH ad spend. Rather, programmatic is a way to carve out a bigger piece of a media buyer’s overall marketing budget.
Attempting to win budgets from giant buckets such as television, search and mobile may seem like a daunting task. However, a recent survey conducted by Ocean Outdoor found that DOOH has been successful in doing that, thus making it a media channel with the largest growth potential.
Programmatic DOOH buying enables media owners to reach previously inaccessible portions of the marketing budgets. To put this in motion, DOOH inventory must be accessible to advertisers in the same way as the other media channels.
In an interview with Essential Retail, Jose Avalos, Visual Director at Intel, highlighted a current pitfall in the DOOH industry: there is no centralized location to purchase inventory. “If you want to buy a campaign over a digital signage network you have to make 50 different phone calls”.
Programmatic can help solve this issue. SSPs bring together inventory from numerous media owners. It is a simple way for advertisers to explore their options and advertise on a range of networks, if desired. With a more straightforward purchasing process, more money will flow into digital signage.
Programmatic media buying
With this broader reach, media owners that list their inventory on an SSP have access to a larger variety of buyers. Given this increased visibility, previously unused ad space can now be sold, and new relationships can be formed, ultimately increasing revenue.
It is no longer a question of whether programmatic can be used but rather how programmatic should be used for DOOH. Programmatic is an opportunity for media owners to access new revenues. With nine out of ten agencies buying media programmatically, it is a must if the DOOH industry wishes to increase its share of the ad spend.
SSPs are critical in the process, but not all SSPs are a fit for programmatic DOOH buying.
To succeed in programmatic ad selling, DOOH media owners need to carefully select a proper SSP to work with. SSPs are not all created equal, and many are not a good fit for the particularities of the industry.
Prior to making a final decision and joining forces with an SSP, media owners should ask four important questions:
1. Does the SSP understand DOOH’s intricacies?
Though there are many similarities between DOOH and online digital media, a one-size-fits-all approach to programmatic can be catastrophic. Similarly, a retrofitted digital or mobile platform will not likely have the functionality required to truly adopt the DOOH workflow.
In traditional programmatic buying, campaigns operate on a one-to-one impression basis. One ad is served to one person. In DOOH however, one ad can be viewed by thousands of people at any given time, as is the case for Times Square, Piccadilly Circus and similar high traffic locations.
Without the ability to properly represent DOOH in buying platforms, media owners are forced to undervalue their inventory, only allocating one impression per play instead of the multiple impressions actually delivered. Any SSP that does not address this fundamental issue is not suitable for DOOH.
It is not only necessary to select an SSP that understands the nuances of the DOOH programmatic process, but one that is also capable of communicating the opportunities and benefits of OOH to media buyers. This is as important, if not more so, than the technology itself.
In fact, a survey by the DPAA showed that only 39% off media planners know that DOOH can be purchased programmatically. Media owners should work with an SSP that is actively working to grow the awareness about programmatic DOOH among media planners.
2. Is the SSP capable of displaying DOOH standardized audience measurement data?
Traditionally, media buying is tracked through a browser cookie. When an individual views an ad, an impression is tracked. Yet given the nature of DOOH, views cannot be tracked individually, but rather as an aggregated total.
Without access to audience demographic tools media buyers are most familiar with, the DOOH industry must bridge the gap by combining first- and third-party data. By using today’s automated audience measurement tools (such as mobile service provider data, viewer detection technology, etc.), media owners can determine each screen’s audience at a given time.
Detailed measurement is critical for matching ad inventory with each media buyer’s targeting requirements. The SSP selected must be able to display data in a way both media owners and buyers can understand.
With more data available, media buyers will be able to better target their audience, which will likely generate a strong ROI. Of course, better results will create more demand, driving higher CPMs for the entire industry. With accurate and abundant data, DOOH can be an ideal programmatic option for buyers.
3. Does the SSP align with current content management system (CMS) workflows?
It is also important to consider whether the SSP can seamlessly integrate into the DOOH network’s deployed CMS.
In the online world, the client’s browser handles all playback. In contrast, playback in DOOH is more complex and is handled by network’s software (CMS). Player capabilities such as audio support must be considered. Campaigns also need to abide by local digital signage regulations.
Without taking these important issues into account, programmatic buys may conflict with the network operator’s standard sales process.
A properly aligned system will allow both direct and programmatic deals to co-exist seamlessly, without any need to worry about scheduling conflicts. Any system that requires frequent manual intervention is programmatic only in name.
4. Does the SSP address the “race to the bottom” caused by real time bidding?
One of the early issues with online programmatic was the likelihood that real time bidding (RTB) would create a race to the bottom for CPMs. Floor pricing initially improved the situation but what really brought CPMs back up was the scarcity of premium inventory. Everyone will likely agree that advertising on the homepages of the New York Times or ESPN websites delivers very different results than displaying an ad on John Doe’s blog.
When the concept of programmatic was first introduced to the DOOH industry, many were concerned that RTB would have the same effect on their inventory. Fortunately, this issue can easily be resolved if the SSP is capable of qualifying DOOH inventory as that of premium quality.
Due to the complexity of installing an OOH network and the high costs associated with this installation, digital signage is generally only deployed in high traffic, high impact areas.
This, in conjunction with the powerful impact of large format ads, has established OOH as an extremely effective medium. According to a study by SignStix, 63 percent of people state that digital signage attracts their attention. Furthermore, is it reported that DOOH results in a 31.8 percent increase in sales volume.
By dealing with an SSP that understands just how valuable premium DOOH inventory can be, media owners need not worry about low CPMs; they can always negotiate fair rates.
Example of a DOOH SSP interface. Click to enlarge.
What’s next for programmatic DOOH?
Like with any new trend, many will wait until others have tested the waters before taking the dive themselves. Yet those who do not adapt to the growing need for automated media purchasing will likely see stagnating revenues, as digital media buyers will not look their way.
Programmatic will be common practice in the DOOH industry in the foreseeable future, so only one question remains: how much of a revenue increase will programmatic mean to you?
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Jody Smith will participate in a panel discussion entitled, “Generating Revenue with Programmatic Buying,” on Tuesday, March 28 at during the Digital Signage Federation’s DOOH Strategy Summit at DSE 2017 to be held at the Las Vegas Convention Center. For more information on this or any educational program offered at DSE 2017 or to learn more about digital signage go to www.dse2017.com. For more information on the Digital Signage Federation go to www.digitalsignagefederation.org.
Jody Smith
About the Author:
As BroadSign’s Product Manager, Jody Smith holds a broad technical background, which he uses to design and implement solutions that help to achieve the goals of BroadSign customers. Smith joined BroadSign thirteen years ago and has since become the company’s preeminent product authority. Jody Smith was the technical lead on some of the largest and most successful digital signage deployments in the world. He has years of experience speaking at events across the Americas and Europe.