The Pros and Cons of Digital Out-of-Home Advertising, And Why Data Is Relevant Even Offline

This is a digital world. The Internet has become an integral part of our lives, and it may seem like it is all there is. Outdoor, newspaper and even TV advertising is commonly overlooked. Especially because it's hard to know exactly how much value is being generated by each ad. Many rightly ask me if it is worth doing "old school" advertising, when there are so many more advanced tools now.

But what if such advertising could also use all the new developed digital methods and techniques? How powerful could that be?

 

What Is Digital Out of Home

Digital out-of-home (DOOH) advertising refers to the use of digital screens to deliver ad messages in public spaces. DOOH screens can be set up at street corners, bus shelters, airports, malls, and other high-traffic areas.

These digital devices have become the main growth driver for the entire outdoor advertising market in the last decade or so. According to the report from Japan's Dentsu Group, traditional OOH spend in 2023 is forecast to grow at 0.6%, while DOOH will grow at 10%. Digital outdoor ads now account for 64% of total out-of-home revenue (back in 2011 it was 14%). Outdoor advertising operators dismantle static billboards and replace them with digital billboards in the most popular places.

Why is this happening? Well, first and foremost, digital billboards allow you to advertise faster. It is very convenient, everything happens with the press of a button, if you use DOOH DSP. No need to print a multi-meter billboard, drive it to the place and install it with a team of climbers.

But it's not just about speed. Advertising on digital billboards allows customers to use modern tools based on Big Data analysis. This completely changes the traditional idea of outdoor advertising, filling it with new opportunities.

 

Big Data Can Be Great

Regular billboards, we all agree, are a "dumb" tool. All they can do is stand there and be pretty. But if we just add a digital screen and an Internet connection, suddenly the possibilities are endless. Advertisers and website owners can use a huge variety of tools to increase the effectiveness of their ads.

For example, digital outdoor advertising operators can start collecting user data. Both based on geolocation from mobile operators, and with the use of Wi-Fi sniffers that collect MAC addresses from devices that are passing by. As a result, the company (and its clients) become more aware of how many people view the ad and understand what would be the appropriate price to pay.

The geolocation data collected by the operators can then be "joined" with other databases from different sources: telecom operators, cash equipment operators, advertising platforms, and various Internet services. Enriched with this data, information about geolocation and MAC addresses allows companies to understand the specifics and needs of the audience that can be viewing their ad.

Data on financial transactions, internet consumption, and online behavior helps color the city so that the companies can see how various neighborhoods differ on a spectrum of more than a dozen characteristics: gender, age cohorts, interests, shopping behavior, etc. In one area, certain stores may not be available, and therefore it is much more common to order online. People on one city block may be much more adept at partying, while another may be filled with old ladies who want winter coats. All this is very fascinating to watch. And without this data analysis, nobody would ever know about it.

It should be noted that all this data is depersonalized. It doesn't allow to identify a specific user, and therefore does not violate any privacy laws. But with it you can create, for example, a digital heat map showing the locations where the largest number of customers from the target audience are found — aged 35-45, with an above average income, showing interest in buying a house.

This data also allows operators to adjust an already launched advertising campaign depending on the circumstances. For example, they can choose to show their ad when the concentration of the target audience located next to the digital screen reaches a certain level. Or to show a longer commercial if there is a traffic jam nearby and drivers are able to watch it in its entirety.

 

Evaluating the Effectiveness of OOH Advertising

Outdoor advertising is often referred to as the most under-researched media, as the toolkit for tracking its results is very limited. It's often difficult to understand how much OOH ads really affect users, and how much budget should be allocated to them. The user themselves will not remember whether they bought the product because they saw it a week ago on a billboard, or for other reasons entirely. There is no clear link here, like there is on the Internet, so it can be difficult to see the results of a particular marketing channel. But with Big Data and DOOH, this is rapidly changing.

For example, one well-known mall in the US ran an advertising campaign from February to March 2021 on 16 digital structures in the city. It compared the data collected by the digital screens (more than 100 thousand MAC addresses) with data from the customers’ Wi-Fi traps in the mall. The audience was divided into two groups: those owners of MAC addresses who were spotted near the outdoor digital ad, and people who definitely did not see the mall being advertised. After checking, it turned out that 0.36% of people who saw the outdoor ad came to visit the mall, and 0.26% of people who definitely did not see the ad also came to the mall. It was pretty clear that the increase in conversion was 28%.

Based on this figure, the mall could calculate marketing profits, adjust its ad spend, and accurately plan for new, larger campaigns.

One of the most iconic outdoor ads

 

Now for the more general pros and cons. Let's start with the reasons why DOOH advertising might actually not work for you.

 

Cons:

1. Not very advantageous for online platforms: If you are purely an online store, outdoor advertising should not be your top priority. At the same time, some online stores have very effectively used outdoor ads by targeting specific locations.
2. Digital vandalism: DOOH displays can be vandalized or hacked, which can temporarily disrupt ad productivity at a particular spot.
3. Technical glitches: Technical glitches can occur, causing the display to malfunction, which can lead to negative customer experiences. This can't happen on a regular OOH billboard.
4. Limited reach: DOOH advertising is limited to specific spots (even specific angles!) and people who are out and about. It may not reach as many customers as other advertising mediums like TV or radio. DOOH is also often not the best way to target gamers and other consumers of purely online content.
5. Higher cost of entry: DOOH requires the purchase or rental of digital displays and technology infrastructure to support them, therefore providers can charge higher costs, especially for premium locations.
6. Difficulty of use: Setting up a campaign on a digital out-of-home display is often not as easy as using Google or Facebook Ads. Fortunately, there are some new tools such as demand side platforms and content management systems (DSP and CMS) to help with that. You can simply upload an image and after it is approved it will appear on a billboard at the scheduled time. Even malls and airports allow this. Although DOOH DSPs usually charge a percentage.

Pros:

1. Dynamic content: Digital displays can show fun content like videos, animations and interactive ads, which makes viewing it more engaging and memorable.
2. Targeted messaging: You can gather location, demographic, behavioral and psychographic data about the people who view your ads. DOOH can be targeted to specific demographics, locations, and times of the day, allowing advertisers to tailor their message for maximum impact.
3. Real-time updates: DOOH ads can be updated in real-time, allowing for greater flexibility and agility in responding to changing market conditions, events, or trends. Through flexible planning, multiple target groups can be addressed at different times by a single ad screen. Real-time targeting allows you to increase the share of the target audience among those who see the ad screen by an average of 20%.
4. Powerful combined effect: Data analysis helps synchronize advertising outputs with other media, such as radio, TV or the Internet. If you prioritize those who have already seen outdoor advertising when placing your online ads, it increases CTR (click-through rate) by about 100% on average.
5. Less intrusive: During the pandemic people became so tired of looking at their phones and computers that DOOH has become more of a pleasant element of city life. Such advertising does not violate personal boundaries, does not impose itself on the content being viewed at the moment, and at the same time is able to adapt to external conditions.
6. Higher trust: According to Nielsen, 57% of people surveyed are more likely to trust billboards or other forms of outdoor advertising than Internet ads. Why? Because billboards are more impressive, bolder, and tend to require clear messages. They also feel "approved" by the outside world. Many people suffer from ad fatigue in the online environment. Meanwhile, looking at something new offline feels relaxing and pleasant.

 

All in all, DOOH advertising can be an effective and engaging way to reach a targeted audience. However, it also has its limitations and risks, and requires careful planning and data analysis to ensure a positive ROI. In the modern age this is achieved by various DOOH DSPs, which can make outdoor advertising about as easy and convenient as marketing products online.