The demand for personalization while maintaining data privacy continues to grow. As brands and advertisers explore options to target consumers without third-party identifiers, digital out-of-home (DOOH) advertising is gaining prominence. This may be obvious as it has several benefits: it can comply with data privacy laws, serve contextually relevant ads (based on location), reach a wider audience, and is easier and cost-effective to buy. DOOH investment has been growing at a rapid rate, and according to Research and Markets’s reportOpens a new window , the global DOOH market is expected to reach $54.83 billion by 2030.Â
While the future of DOOH advertising looks bright, certain challenges affect the industry that brands must overcome to realize the maximum ROI. Here are a few challenges currently affecting the DOOH industry and a few ways they can overcome them.
1. Difficulty in Buying DOOH
One of the most commonly touted advantages of DOOH is that it is simpler and more cost-effective to buy ad inventory compared to a few other forms of ad inventory. While this is true to a major extent, thanks to programmatic advertising, many advertisers still find buying DOOH difficult. According to a study by YahooOpens a new window in 2020, about 53% of advertisers found it challenging to buy DOOH.
One of the main challenges advertisers face in this regard is finding the right partner to work with. Another major problem is the difficulty in finding all the relevant inventory in one place. About 93% of the study respondents wanted a single platform to plan their advertising. This emphasizes the need for advertisers to incorporate programmatic DOOH in their advertising efforts.
A programmatically-connected marketplace can solve many of these challenges and offer benefits like flexibility, reach, operational efficiency, addressability, and measurement.
2. Difficulty in Comparing Results From Different Providers
One of the major challenges advertisers have been facing is that many media owners measure impressions in disparate ways. The absence of standard metrics makes it challenging for ad buyers to plan accurately against advertising impressions and identify which providers deliver the best value. In fact, according to a study by IAB AustraliaOpens a new window , one of the top challenges preventing regular and programmatic DOOH advertising from becoming a larger portion of ad volume is the shortage of standardized measurement and metrics.
In Australia, the Outdoor Media Association (OMA) launchedOpens a new window Measurement of Outdoor Visibility and Exposure (MOVE), an audience measurement tool, which is expected to introduce a standardized measurement for digital campaigns and qualitative metrics for digital signages. It includes metrics for reach, dwell time, frequency, and visibility, among others. Almost all industry participants in the country have adopted the standard. Similar standardized metrics can be developed in other geographies to make it easier for the industry players to adopt.
3. Hardware Problems
When it comes to DOOH, there are some hardware-related issues businesses face. When companies use cloud services like Google Cloud Platform (GCP) or AWS, they can manage risks within the SLAs that are provided. These services also have alerts for outliers and redundancy mechanisms, among other functions. However, businesses will need to consider all these factors independently.
For example, a few things they will have to consider include:
- The most cost-effective hardware in terms of price, stability, and performance
- The amount of redundancy to be secured
- Potential problems, such as Wi-Fi signal strength, heat, or fire hazards as a result of faulty power supply wiring
- The various metrics to be measured at different frequencies while PC and network resources are limited
- Probable hardware issues
- Understanding whether stakeholders are aware of potential problems and ways to deal with them.
4. CTV-like Challenges
DOOH faces a few challenges connected TVs (CTV) face. One such challenge DOOH owners should consider is competitive separation. On the one hand, they must account for competitive ads in the same block. On the other hand, DOOH servers also need to account for the ad-serving environment. For example, running Chipotle ads on a screen outside Taco Bell will be counterproductive.
Similarly, just like brands do not prefer their ads showing up on a website with low-quality content, many brands do not want their DOOH ads showing up on a screen in the wrong location, for example, a liquor shop or a casino. Fortunately, they can use the right technology to set the right rules to ensure their ads are contextually relevant.Â
DOOH ads also require continuously reviewing the quality and frequency of the creatives to reduce low-quality ads. For example, the volume of ads may be too high relative to a given environment, hence becoming disruptive. Brands can use the right technology to optimize ad quality considering the environment.
Brands using DOOH also have nuanced needs for performance and measurement. For example, imagine an Uber driving from Hoboken to Manhattan and having a DOOH screen. With geo-targeting, should the ad view count as reaching a person from New Jersey or New York?Â
Further, how do media owners benchmark DOOH ad performance? For example, if an advertisement was served in a sports bar with over 60 spectators, the reach should technically be considered 60. However, several video-centric DOOH suppliers are not getting paid by these multiple numbers of audiences.
Fortunately, the methodologies for measuring the number of viewers present are becoming sophisticated. For example, DOOH owners can determine the number of Bluetooth-enabled devices within the range of the hardware playing the ad. Further, despite many of these challenges, the DOOH inventory is adopting CTV standardization. The industry has also adopted a few best practices for DOOH ad delivery with technology tailored for the DOOH environment.
A Bright Future Ahead
The industry has recognized most of these challenges and is taking steps to overcome them. And despite these challenges, brands, advertisers, and service providers recognize the importance of DOOH in advertising. With the industry’s growth projected at 11.6% CAGR according to Research and Markets’s study mentioned above, DOOH has a bright future.