This post is a companion piece to our recent discussion on the Marketecture Podcast, which you can listen to here.
The $21 Billion Question: Why Isn't DOOH Getting a Bigger Share?
The DOOH market is undeniably substantial. Globally, it's a $21 billion industry, with the US market alone contributing a significant $5 billion. These figures paint a picture of a thriving sector. However, despite this impressive size, DOOH's share of the total advertising spend is surprisingly stagnant, even declining in some analyses. This begs the question: why isn't this booming industry capturing a greater portion of the advertising budget?
Fragmentation: A Major Hurdle
One of the primary challenges facing DOOH is the significant fragmentation within the market. The sheer number of screens, networks, and inventory providers creates complexity and inefficiencies. Buying DOOH inventory often feels like navigating a complex maze, with a lack of standardization hindering streamlined processes. This complexity makes it difficult for advertisers to plan and execute effective campaigns, particularly at scale.
Programmatic's Promise and Pitfalls
The rise of programmatic advertising has been heralded as a potential solution to DOOH's fragmentation issues. However, the reality is far more nuanced. While programmatic offers the promise of automation and efficiency, a large portion of DOOH programmatic transactions occur through private marketplaces (PMPs). While PMPs offer some benefits, they also introduce limitations on transparency and competition, potentially negating some of the advantages of open programmatic exchanges.
Measurement Matters: The Need for Standardization
Accurate measurement of DOOH campaign effectiveness (not impression counting) remains a critical challenge. Unlike other digital advertising channels, DOOH lacks universally accepted and standardized metrics for measuring campaign performance. This lack of consistency makes it difficult for advertisers to compare different DOOH options and justify their investment. However, recent positive developments, such as the collaboration between the Interactive Advertising Bureau (IAB) and the Media Rating Council (MRC) on attention measurement accreditation, point towards a brighter future for standardized metrics. This collaborative effort could significantly impact how DOOH is valued and perceived by advertisers. It paves the way for improved campaign optimization and potentially higher returns on investment.
The Future of DOOH: Navigating Challenges and Embracing Opportunities
Despite the challenges, the future of DOOH remains bright. Several factors point towards continued growth and innovation in the sector. Technological advancements offer solutions to existing issues, and strategic partnerships can create new opportunities.
The Convergence of DOOH and CTV
The convergence of DOOH with Connected TV (CTV) presents a significant opportunity for expansion. By integrating DOOH with CTV data and targeting strategies, advertisers can create more comprehensive, impactful campaigns that reach consumers across multiple touchpoints. This integration creates a powerful synergy, enhancing both channels' reach and effectiveness. The ability to deliver highly targeted messages across both out-of-home and in-home screens is a game-changer for brand engagement and campaign measurement.
Leveraging First-Party Data
The increasing importance of first-party data provides another avenue for DOOH growth. By utilizing their own data assets, advertisers can create highly targeted and personalized campaigns that resonate deeply with their audience. This targeted approach can significantly improve campaign ROI by minimizing wasted impressions and maximizing engagement. This strategic use of data represents a significant shift from traditional, less targeted DOOH campaigns.
Addressing the Attention Economy
The DOOH industry is increasingly recognizing the crucial role of attention in advertising effectiveness. Attention measurement is not simply about impressions; it's about understanding whether a message is actually seen and considered by the audience. By focusing on creating truly attention-grabbing creative and employing advanced measurement techniques, DOOH can elevate its value proposition and compete more effectively for advertising budgets.
Conclusion: DOOH's Path Forward
The DOOH market, while significant at $21 billion, faces real challenges in achieving its full potential. Fragmentation, programmatic complexities, and measurement inconsistencies hinder its ability to compete effectively for a larger share of advertising spend. However, the convergence with CTV, the increasing availability and utilization of first-party data, and a growing focus on attention measurement present exciting opportunities for growth and innovation. The future of DOOH hinges on addressing these challenges head-on and embracing the potential of these innovative strategies. To further understand the intricacies and future of DOOH, I highly recommend listening to our recent Marketecture Podcast episode, “Does DOOH Matter?”, available here. We delve deeper into these topics, offering additional insights and perspectives from industry experts. It’s a conversation you won't want to miss.
