Revitalizing DOOH: Performance Metrics for Market Growth

Elevate DOOH with performance metrics, unlocking growth in the dynamic advertising landscape. Embrace digital evolution for measurable success.

 

Out-of-home (OOH) advertising, long celebrated for its iconic murals and subway displays, faced a substantial setback during the COVID-19 pandemic, witnessing a 30% drop in revenue as people retreated from public spaces. The industry's road to recovery, particularly in the digital out-of-home (DOOH) sector, now hinges on prioritizing performance to secure a larger slice of the advertising market.

Resilience in Digital Evolution

Total US out-of-home ad spend for 2022 reached $8.6 billion, marking a substantial 20.7% year-over-year increase, as reported by the Out of Home Advertising Association of America (OAAA). However, OOH accounts for just over 2% of total US ad spend, revealing untapped potential.

Digital outpaces traditional channels, with the DOOH segment experiencing remarkable growth, expanding by 24.2% in 2022, the second consecutive year of double-digit growth. Despite this, the journey to reclaim lost ground from the pandemic's impact remains a priority for the OOH industry.

Programmatic Prowess: A Key Catalyst

As digital ascends, programmatic advertising emerges as a pivotal catalyst in shaping DOOH's future. The infrastructure for open-auction programmatic is largely in place, with major out-of-home players already transacting programmatically. The industry now anticipates a surge in programmatic DOOH campaigns, with Place Exchange CEO Ari Buchalter noting that the majority of DOOH screens in the US are integrated for programmatic transactions.

While programmatic DOOH is still a small fraction of budgets compared to direct buys, its share is steadily growing. In 2022, programmatic represented an estimated 15% of US DOOH revenue, signaling its increasing importance in the advertising landscape.

Performance Metrics: The Uncharted Frontier

The transition to digital and programmatic has improved targeting, measurement, and attribution technology in the OOH space. Notably, DOOH benefits significantly from location-data-based targeting and attribution, vital for measuring foot traffic and attributing in-person store visits.

Despite advancements, challenges persist in fully automating attribution and measurement solutions. Advertisers express the need for more automation, particularly in programmatic campaigns, where human oversight is still common. Achieving true automation is crucial for meeting marketers' key performance indicators (KPIs) efficiently.

The Imperative of Performance Marketing

While DOOH has advanced in targeting and measurement capabilities, advertiser perceptions lag behind. The industry must communicate the channel's performance capabilities effectively to bridge this gap.

A recent survey by DOOH marketplace VIOOH revealed that DOOH ranks third, behind social media and mobile, in developing the most innovative advertising opportunities. Programmatic DOOH, in particular, garnered attention, with 41% of agency and advertising executives recognizing it as a significant source of innovation.

Charting the Future: A Call for Collaboration

To unlock DOOH's full potential, the industry must embrace performance-based advertising and measurement. The impending rollout of new Media Rating Council (MRC) audience measurement standards for OOH promises improved measurement capabilities, facilitating better comparison against other media channels.

Beyond measurement, advertisers seek the flexibility to use OOH for broad brand awareness campaigns while also targeting specific demographics and optimizing spend against performance KPIs like store visits. The industry's cutting edge lies in enabling advertisers to purchase OOH inventory based on performance metrics, ultimately driving stronger buy-in from clients.

In conclusion, the resurgence of the OOH industry, particularly in the digital realm, hinges on its ability to prioritize performance metrics, automate processes, and effectively communicate its potential to advertisers. The future of DOOH lies in its adaptability to the evolving advertising landscape, offering a compelling blend of creativity and measurable results.