Fighting the Headwinds on DOOH

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By Paul Jankauskas, General Manager, Verifone Media

Digital Out of Home (DOOH) advertising is the third-fastest-growing media type in the U.S. by ad spending, but major barriers to progress remain. DOOH will need to overcome the following four headwinds to realize its full potential.

Technology

The origins of DOOH go back more than 30 years to the first patent awarded for RFID, the technology that preceded Near Field Communication (NFC). By now, major retailers everywhere should be maximizing profits with NFC networks embedded in their DOOH displays. Until recently, however, there’s been little incentive for retailers to make the investment.

A good analog for DOOH’s slow development is the drawn-out gestation of video on demand (VOD). VOD technology was available decades ago, but only recently have providers and consumers committed to it. Why? Because it took that long for critical mass to develop, for the entertainment industry to invest, and for consumers to change their viewing habits.

At last, DOOH is approaching a similar tipping point. The explosion of e-payment apps, which are increasingly integrating with merchants’ payment terminals, is creating a volume play on the consumer side that will naturally incentivize retailers to build out their NFC networks. Once the networks are in place, consumers in turn will demand more of what DOOH provides. This will eliminate the technology headwind, uncapping DOOH’s full potential.

Content

For generations, advertisers have focused on the spot. First, it was 60 seconds, then 30, and now 15 (give or take). But the content model the advertising business has relied on for more than half a century remains the same.

DOOH requires a different type of storytelling, one with an extraordinary compression of time and space. The six-second videos on Vine and less-than-10-second images on Snapchat are a possible future model for DOOH, but like much social media, these experiences aren’t designed for commerce.

DOOH needs a new model that captures the speed, intimacy and irreverence of social media, while at the same time, incorporating credible commercial messages. Until this happens, DOOH is a platform for the future that’s restrained by content from the past.

Measurement

“Half the money I spend on advertising is wasted, the trouble is I don’t know which half.”

This famous complaint by John Wanamaker, an early proponent of advertising who died almost a century ago, could just as easily be said today.

Our industry is awash in metrics. But, do metering, click throughs, Twitter TV ratings and the like really tell us what we need to know?

DOOH’s singular strength is that it’s one of the few platforms with a direct, verifiable link between advertising prompt and purchases in the brick and mortar world where 80 percent of all spending still occurs.

Case in point: The introduction of mobile attribution and transactional attribution platforms into the Fuel media space allows us to understand and measure consumer spending behaviors and deliver data driven efficacy metrics akin to cookies in the online world.

The headwind here is the absence of robust data sets that clearly demonstrate spend and buy causality. With DOOH measurement now locking into place, validating data are soon to follow.

Media Buying Culture

Few industries need disruption more than ad buying. The language of upfronts and sweeps, not to mention the commission structure, has changed little since the 1960s. C-suite executives who invest hundreds of millions in media buys are often insulated from independent thinking, expecting much less accountability from their advertising spend than from other corporate investments.

When CEOs defy conventional thinking, the verdict can be harsh. Indra Nooyi was roundly maligned in 2010 for pulling Pepsi’s longstanding Super Bowl advertising. Following the industry’s bashing, PepsiCo was back, sponsoring the Super Bowl halftime show in 2013. But study after study demonstrates little to no correlation between Super Bowl ads and product sales.

The insular thinking behind so much ad buying is, perhaps, the greatest headwind of all. The industry’s resistance to innovation and accountability has to change, or traditional advertising will follow traditional media in decline.

All industries have headwinds, but for DOOH, there’s plenty of good news. Our headwinds are finally receding, and with a value proposition this compelling, DOOH will not long be denied.