Programmatic Advertising in Place-Based Media: Hype or the FINAL Solution?

Posted by on Apr 7, 2014 in Advertising, Digital Billboards, DOOH, Industry, Insight

Much has been said regarding the lack of performance inherent in place-based DOOH networks. The ad-based network has been a difficult sell among both advertisers and network operators alike. The lack of control, targeting and measurement combined with deflated ad budgets over the last decade have contributed to a general malaise among digital out-of-home advertising operators. It has stifled general demand for our products, helped to fuel industry consolidation and provided a catalyst to very quickly shift this industry. The dust has yet to settle. Moreover, a clear victor in finding the true method for monetizing place-based digital screens has yet to emerge. In other words, the right problem + solution business model still remains elusive. There remains a massive opportunity for the one with just the right strategy.Web And Seo Analytics Concept

First there were the network aggregators, then there were the network aggregators that provided a better platform for integrating the software and hardware of the networks. Now, we’re seeing a mind-meld of sorts between technology originally formulated for online display ad networks, combined with mobile technology and demand-based ad buys to eliminate waste and boost demand for larger ad purchases. The likes of Vistar Media are getting closer to solving the equation of targeting and re-marketing by using mobile location-based targeting. However, there are still some gaps which need to be addressed.

First, tracking and targeting needs to be automated. It’s difficult if not impossible to completely reach advertising scale when you’re unable to track audiences in real time. Mobile and location-based tracking will help, but facial tracking and people counting needs to further improve. Not everyone will want to opt-in on a mobile device and we forget that most networks are small, local and dispersed–not part of some massive conglomerate. Just ask most of our resellers. Such networks will never find scale when advertisers demand that each location receive a visit from a Nelson rep prior to being qualified and CPM rates being quantified. Tracking needs more automation. Online has figured it out. We still aren’t quite there yet.

Second, we’re still in a chicken vs. egg scenario. Advertisers won’t buy until they can effectively measure. Networks are less inclined to invest in the “digital real estate” of digital signage without the promise of advertising to make the investment worthwhile. So far, millions have been poured into this industry in an effort to amass the digital real estate, but after literally wasting millions they’ve found the ad budgets which might be found in traditional mediums pale in comparison to a digital out-of-home strategy.

Simple solutions to complex problems are rare. Digital signage is about a complex an industry as it gets. It’s complexity warrants a solution to the ad-based network problem that considers an exhaustive amalgamation of multiple ancillary solutions.

I think we’re getting closer. In my mind, the right fit for the industry will combine the lessons learned from programmatic targeting from the online world into digital out-of-home. Programmatic ad buying seeks for maximum efficiency in both the targeting of the consumer and the purchase and bidding process of the ad buyer. In thus industry, it will mean even more effort, integration and work. It will require more data and analytics–gleaned from multiple sources, including mobile devices. It will include re-marketing and re-targeting with appropriate measurement. . It will also require a better understanding of the entire ecosystem–not just a good software platform for displaying ads. It will integrate the efficiency of programmatic ad buying and selling–eliminating the need for expensive human intervention. This description sounds like a dream come true, but it’s happening–slowly but surely.

It will also need to be more turnkey. The technology buyer should be able to purchase a digital signage advertising bundle–complete with display, player, software and some pre-arranged templates and have the ability to plug it in and start making money with as little effort as possible. The best solution would work like Google Adwords and Adsense–or a typically affiliate network of Publishers and Advertisers. The software will also be VERY simple.

The programmatic approach to place-based media networks is a very broad way of saying, “if we solve ALL the pain points inherent in ad-based networks, then we’ll be able to ultimately make them a success.”  You might be saying, “of course a holistic programmatic approach to solving the industry’s woes is the right answer. Thanks ‘Captain of the Obvious….'”  There is certainly no catch-all approach to the Advertiser/Publisher conundrum, but the iterations the industry keeps making along the path–including more pushes toward industry best-practices–will assist in legitimizing a fragmented and difficult-to-measure communications medium. The programmatic approach may not prove THE final solution, but the concept inherent in its implementation is certainly pointing us in the right direction.

What pain points are keeping ad networks from being truly successful? Measurement? Control? Existing advertisers? We’d love to hear your feedback.

  • Marc Charette

    One area I feel is worthy of discussion is the concept of advertising itself being misunderstood. With the plethora of choices consumers have today, along with the abundance of ‘push marketing’, I feel the point is being completely missed. Are we asking in the broadest sense, what do people want to experience from these content devices and environments?

    Some of the more effective campaigns of late have appealed to our sense of ‘telling a story’, yet that in itself is still not enough. The story has to be relevant to the audience. For example, if an advertiser wants to sell their new line of clothing and such clothing is weather related, what weather based messages are they including? If there is a forecast for either in situ or a destination that would relate to the product, then there is more potential to have the content be actionable.

    This is how the multiple panels or sections of the screen can be better leveraged by content creators. By including the stuff people want irrespective of the advertising – yet still relevant and keyed to the audience or market, the emotional appeal has greater power and potential to hold the attention of its viewers.

    In end, what I am suggesting and would love read from others is more relating to the content. The devices, software and tools are only tools designed to deliver content in the form of stories, ideas, valuable / actionable information and in turn the will to act with our wallets. Remember… logic opens the mind but emotion opens the pocket book.

    Marc Charette
    KAVI-R Consulting – Australia

    • Nate Nead

      @marc Thank you for your comments. You’re right. The software and delivery of the content becomes nothing more than a commodity without 1. Relevant Metrics and an Understanding of the Target Audience, 2. Proper Targeting to the “Understood” Audience, 3. Re-targeting of interactivity of some type–whether through mobile or other place-based solutions, 4. VERY GOOD CONTENT.

      The still “newness” of DOOH when compared to other mediums means it must prove itself better than other mediums. That requires REAL, actionable data, including a programmatic approach, not some fluff like Return on Objectives. For real, broad appeal the ROI must be measurable. That requires really good content and a good understanding of the audience. Unfortunately, we don’t have it down to an automated science yet. That means audits and actual physical people counting is often still needed, but we’re getting there–slowly, but surely.

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