Media Buying Briefing: The shift to programmatic in digital OOH creates ‘muscle memory’ for an outlier industry

By Michael Bürgi • May 24, 2021 •

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Ivy Liu

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For better or worse, out-of-home (OOH) media has always been an outlier of sorts relative to TV or digital, from both a buyer and seller perspective. It was largely seen as a local medium, and approached for its locational value rather than quality of audience.

However, the steady advances OOH media companies have made to convert to digital inventory — incorporating digital video, dynamic signage and other forms into their offerings — have enabled the industry to incorporate programmatic into the buy/sell process. And the toehold programmatic has secured in digital OOH (DOOH) is shifting perceptions and pushing the medium into greater consideration for omni-channel media buying and planning, as a result of it being evaluated as audience-driven as much as a location-based buy.

One sell-side executive described programmatic’s effect on DOOH buying as “creating muscle memory” in that it’s more measurable and targetable alongside other media than it has ever been before

Programmatic currently accounts for only about 10 percent of all DOOH inventory, but media buyers and sellers agree that number will surge as media agencies strike alliances with programmatic providers and DSPs.

“Programmatic will become much more important within digital out of home,” said Ameet Shah, partner and vp of publisher operations and technology strategy at Prohaska Consulting. “Audience [as a means of assessing OOH] has always been there, but never was the focus because it was hard to transact and put in place.”

One agency holding company is putting those assets into partnership for mutual benefit. Digiday has learned that GroupM has quietly cranked up its Sightline partnership, which pairs the programmatic abilities of its Xaxis unit with its OOH media agency Kinetic Worldwide. The partnership was formed a year ago, just before the COVID pandemic forced large-scale lockdowns across the globe, so it never quite got off the ground until recently.

But Michael Lieberman, Kinetic’s U.S. CEO, said Sightline has run efforts for 22 clients this year (he declined to name any specific clients), attracting new business from CPG, retail, finance and national auto advertisers. “National advertisers, who may have looked at us for a heavy-up in one or two markets, are now thinking of us as an audience platform that can sit alongside their video, their display, their connected TV, or audio [buys],” he said.

“We’re able to attack budgets from both sides,” added Gila Wilensky, U.S. president at Xaxis. “This lets Xaxis unlock more out-of-home dollars and for Kinetic to finally offer programmatic — previously neither of us had access to this.”

Programmatic’s adoption among OOH media agencies will continue apace. “We typically use managed service, partnering up with DSPs,” said Chris Olsen, U.S. president of IPG’s OOH media agency Rapport, who noted the agency has bought more inventory programmatically to date this year than any prior full year. “In the second half of 2021, we’re looking to have our own programmatic division within Rapport,” he said.

As more digital OOH media firms build out the reach and sophistication of their technology, they see significant opportunity to work OOH into consideration sets alongside other media from the buy side — especially when programmatic becomes the tool used on both ends.

“It’s helping reverse-engineer audience thinking and audience transacting,” said Sean McCaffrey, CEO of GSTV, which runs a network of video screens at gas station pumps. “That’s one of the key drivers of its growth and acceptance. I can think about audience in out of home not just as LaGuardia airport or the 405 freeway, but as Chevy drivers, kids in the household, golfers — the same way I’d think about audience in other digital media.”

Still, obstacles remain in place — not least of which is that the majority of OOH inventory (more than 60 percent, one source estimated) remains non-digital. There’s also the issue of third-party data deprecation and mobile providers’ limits on tracking users. Just as the DOOH embraces programmatic, some sources of data could end up limited.

But even here, industry executives are split on how significant an impact data deprecation will have.

One one side, both Kinetic’s Lieberman and Rapport’s Olsen acknowledged that a dropoff in third-party data, particularly location-based data, could throw a curveball at the insights needed to power effective use of programmatic.

But Prohaska’s Shah said he sees upside relative to other digital media. “Look at what’s important — context, value, audiences. Digital out of home remains fundamentally unchanged in the level of data [it needs] … So by default the value of this inventory goes up.”

Color by numbers

It’s seemingly impossible to have a conversation in media or marketing without bringing up third-party cookie deprecation. So it is with marketers and agencies, who named it their top challenge for 2021 in Adswerve’s most recent survey of 284 executives. Here’s how they responded and where other concerns fell in priority:

Decline of cookies/changes in availability of 3^rd party data: 66 percent
Difficulty in providing ROI of data-driven programs: 35 percent
Business recovery from COVID-19: 29 percent
Siloed organizational structure/poor data-sharing protocols: 29 percent
Lack of internal experience/talent: 24 percent
Limited budget/lack of funding: 24 percent
Government/data privacy regulation: 15 percent

Takeoff & landing

Mike Bregman was named chief data officer for Havas Media Group North America, and will join the media agency’s leadership team. Bregman comes from Accenture’s Applied Intelligence unit, where he was global managing director overseeing customer, marketing and sales analytics.
Omnicom’s PHD USA hired Sarah Clayton as its first head of commerce, joining from drugmaker Bayer, where she was U.S. marketing director.
Playbook Media, a full service independent agency, partnered with measurement service TVDataNow to offer clients media buying and management, as well as measurement and performance optimization to clients looking to spend in the CTV/OTT space.

Direct quote

“We’re not just marketers … we’re storytellers. Has anyone mentioned that today? We’re storytellers. In fact, we’re telling you a story right now. Not a true story … the story we’re telling, you know, is completely made up. But what do you expect us to do? Tell the truth?”

— Late-night host Jimmy Kimmel, during Disney’s upfront presentation to media buyers last week.

Speed reading

Missed last week’s upfronts presentations? Then you’ll want to read Digiday senior media editor Tim Peterson’s Future of TV Briefing, which analyzes the impact on streaming of the surprise WarnerMedia/Discovery Communications merger, and offers a cheat sheet on all the major presentations.
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