What would the digital-out-of-home sector look like if it wasn't the outdoor community nurturing it into maturity?
Original article featured on: http://mediatel.co.uk/newsline/2015/02/24/the-nurture-nurture-debate-of-digital-and-traditional-ooh/
What do you get if you take a media owner or three, the oldest medium in town and then combine it with a spanking new one? On the upside, you find yourself in one of the fastest growing and most exciting sectors around, on the down side, you realise you haven’t got the foggiest as to how to build it, sell it or combine it with you current estate so as to avoid the dreaded portfolio cannibalisation.
So, what would or could the Digital-out-of-home (DOOH) advertising sector world look like if it wasn’t the Outdoor community nurturing this sector into maturity? Let’s just look at a couple of reasons how it was that outdoor screen media came into this sector’s hands in the first place.
Whatever media platform you happen to work on, audience is king, and this is no different in Out-of-home (OOH). However, when it comes to accessing these audiences there is one fundamental differentiator that sets Outdoor apart; audience is intrinsically linked with contracts, landlords and estate owners. Whether its TfL, various National Rail contracts or local councils, the strength of an OOH product is also largely down to the strength of the audiences these enviroments deliver. And because the contracts are often locked down, the audiences are too, making it hard for challengers to create and launch viable new digital screen networks. It was therefore almost inevitable that it would be OOH media owners who would develop this new media channel.
Having worked for CBS Outdoor (now Exterion Media) at the time of launch, I can vouch for the fact it was no easy transition. Take a business whose most ‘new media’ experience was whacking a QR code on a poster across a Tube station the size of a box of matches…(insert obvious health and safety risk) and challenge them to create a national network of connected screens delivering day part targeting and live feeds. This was always going to be interesting.
Thankfully, many of these technical challenges have and are being overcome and we’re seeing some great campaigns utilising some new technologies to deliver stand out, award winning work.
In terms of digital and traditional working in harmony within these media owner portfolios, DOOH seemed to offer traditional Outdoor business’s the opportunity to tap new revenues and provide new full motion; flexible, connected content that traditional simply couldn’t deliver. DOOH was the cherry on the cake and a new revenue stream. The challenge however came with the fact that it was the existing OOH spenders who saw the opportunity to improve their efficiency of their current and future activity. To dissuade this shift of spend, there was some clever jiggery-pokery with the rates, incentive deals for new spenders even some conditional selling was implemented but ultimately, media owners realised that the only way to safeguard existing spending was to limit the flexibility of the DOOH medium or price it so high that it simply didn’t stack up as a sensible buy. But who can blame them, day-parts don’t always make great financial sense when you can instead be earning revenues and commissions based on 2 week campaigns and lumpy print margins.
When it comes to asking the question; “what helps media channels realise their true potential?” The company or sector that ultimately is responsible for ‘raising’ it clearly makes a big difference. For instance, if we had seen a Google or totally a new player emerge to deliver DOOH networks, do you believe we’d still be selling in 2 week blocks? Would we still be having a debate about a hybrid programmatic approach? Considering the fact that only the word ‘Digital’ separates these two media channels, these sectors simply aren’t natural bed fellows.
We could argue with some confidence that the OOH players just weren’t the best parents to bring this burgeoning new media sector up. Not only this, OOH media owners were no more qualified to manage a digital screen network than Justin Bieber is to conduct the London philharmonic orchestra. Arguably if Mum and Dad and their specialist cousins hadn’t favoured their first child at the detriment of their second quite so much, DOOH’s development could have been so very different.
Of course, this is possibly the way it was always meant to be. If a new product or sector had the potential to have a detrimental effect on your revenues, then the most sensible decision is to own it (or kill it) and carefully manage its development. You only have to look at Google and Facebook to see this strategy in full force.
The real question now is; what, if anything is going to change that will enable DOOH to realise its full potential? Well change is no doubt afoot with JCDecaux pulling out of the OMC, and a new OMC Chairman stepping into the role in the form of Mark Craze, the first non-industry executive. This can only be a good thing for the sector.
In all likelihood, a move towards realising the full potential of DOOH is going to be a slow transition. Despite rumblings of a new Digital only industry body starting, it’s going to be hard for this to carry much weight without the buy in of the big three which again is not on the cards in the immediate future. Digital only specialists would solve some issues, but come with an array of problems that no one is quite prepared to deal with. Alternatively the sale of one of the larger digital networks to a non-outdoor player would shake things up but who would be willing to let go of the portfolio that is the main driver of growth in their business?
A centralised, independently managed inventory management system would be hugely beneficial but of course this takes the negotiation power out of the hands of the OOH media owner. This may work for the world of online where supply of audience and spots is vast, but in the finite and relatively small world of Outdoor, this is a hard sell.
Changes that may put us on the right course are those in the area of rudimentary ‘trading’ desks, where a number of digital OOH media owners are blocking off segments of their loop are then are able to more easily migrate content across multiple networks through a single business and platform. The concept of this is a simple and good one; make it easier to buy digital OOH. However, right now we still have more software platforms, varying terminology and methods of data collection and audience measurement than you can shake a stick at and this also needs to be resolved so as to create any consistency and ease of planning/buying – maybe this is a first point of call for our new man at the OMC.
If these basic platforms for aggregating DOOH airtime gets some traction and demand begins to gain momentum from the buying community, this may provide media owners the confidence to free up more airtime with the knowledge that they can deliver comparable revenues across a two week period through an increased brand count (possibly using a standardised dynamic pricing model).
In essence, the buying and selling of DOOH in the model of traditional OOH way will continue as long as it is more profitable to do so. Whatever happens, it’s going to be an tumultuous year for these sectors.