State of the Union: Programmatic Advertising and Digital out of Home (DOOH)
After reading the headline, someone might want to ask, "should Kingsley be talking about programmatic advertising or Digital out of Home (DOOH) on this level after admitting a couple of weeks ago that he only has basic knowledge of the programmatic advertising ecosystem?" Here´s the answer, Yes and No - kindly follow my explanation.
Yes, over the last couple of weeks, I have invested time researching about digital out of home (DOOH) while working on projects focused mainly on programmatic advertising and DOOH. By the way, if there is anyone who might be unsure of what programmatic advertising is, no worries - go and read "Programmatic advertising for mobile - the perspective of a rookie", before coming back to this, we will wait for you here.
Now, as for digital out of Home or DOOH, this is quite simple. It refers to advertisements on out of home "digital" screens which you can find around different parts of most modern cities. These screens are of different sizes and usually display two types of ads - static ads (mainly graphics) and video ads (which have different length multiplied by 5 seconds).
Currently, screen owners or marketers sell ad space to advertisers and their representing agencies "manually" - part of this process requires someone going to the screen with a data device containing the ad from the advertiser and physically inputting it into the screen to run over a specified period. Depending on where you live, you must have come across a couple of DOOH screens, but never really paid much attention to them. But after reading this, I think you might be forced to take a second look at that DOOH screen on your way home.
Here comes the "NO" part of my explanation. While I believe I have acquired considerable knowledge about programmatic advertising and DOOH, I do realise that experienced professionals in the field would have more to offer than a rookie like me. So, for this piece, I sat down with Sven Ruppert, The CEO of Jaduda GmbH and Katy Schädlich, the Supply Manager for Multiscreen DSP -Splicky to discuss the subject of Programmatic advertising and DOOH.
Sven and Katy are individuals I would describe as "the holy grails" of Programmatic Advertising and Digital out of Home (DOOH). Okay, maybe that’s a little overboard, but their passion, drive and ambition in pushing for the incorporation of programmatics in the management of DOOH screens have been quite extraordinary.
So my first question to Sven was Why? What is wrong with the way DOOH screens are currently being managed "manually"?
Sven: There are enormous benefits of programmatics in DOOH, particularly for advertisers. Advertisers can make changes to campaigns in real-time, pause campaigns in real-time, and stop campaigns if and when they no longer make sense. For example, In the summer, an advertiser running an ice-cream ad can select weather targeting for his or her ad campaign and say, I only want to run my ad for ice-cream when the temperature is higher than 25-degree Celsius; otherwise the ad should not be shown. But right now, the market situation is that sales houses are selling ad space on a two weeks basis. In this case, from the ice-cream example, no matter the weather, the campaign will run for a two weeks period. Under such a circumstance, if the advertiser is unlucky and it rains all through this two weeks period, or the weather gets below 25-degree Celsius, there is nothing the advertiser can do about it. But with programmatics, all that would change.
What is the current state of programmatic advertising in the DOOH industry?
Sven: Right now, the majority of the market is not programmatic. As we speak, our research so far and depending on the particular market we are referring to, the percentage of what is delivered programmatically is between 2 and maximumly 5 percent of everything that is digital out of home. You might ask, what are the specifics of programmatics in this case? Usually, we will answer that there needs to be a wifi connection and a technology in place that can pass on request to a DSP like Splicky. And at the end of the day, there also needs to be a bidding process involved. But the standard right now for programmatic digital out of home is more or less an automated guaranteed booking, meaning that the main advantage of doing programatic buying across digital out of home is more automatization and being able to use real-time data trackers, even though that's not the standard yet.
Katy: Katy: In addition to this, the technology most DOOH publishers are using right now is not yet capable of handling programmatic advertising. Technology needs to be updated what means investment. A lot of the inventory is regularly monetized, and the benefit of programmatic advertising might not be recognized. So publishers do not see a reason for any changes within their setups. But to keep the pot boiling and not to lose touch with the market changes will become necessary.
Are there currently any SSPs that are edging towards full programamtics in DOOH?
Katy: Usually start-up companies and smaller players, like Car2Ad and Adpack, that we are already working with, are real programmatic. The more prominent players are still a bit behind and more reserved. A Sale Side Platform (SSP), that is capable to do programmatic advertising for DOOH is Broadsign – again a partner of Splicky.
Sven: In general, the reason why something goes programamtic or not apparently has something to do with the interest of individual parties in the ecosystem. Advertising agencies would like a lot of the ads to be offered programmatically because this would save them work. But when you look at the technology providers, like DSPs and SSPs, it's still a small field in the whole digital ecosystem. Right now, for some of the more prominent players, like Google, it might not be opportunistic to go into digital out of home yet, because there is not much money being made right now. And the effort you have to undertake concerning developing your technology to this point is quite massive, so it is not so much a great cost to benefit relationship. For the larger SSPs, two things are holding programmatics back. Some of them are lacking regarding technological know-how because it is something different when you are used to running an infrastructure that is built on people going to outdoor points and installing physical infrastructures. Secondly, the step into full programatics requires a lot of partners like cities and airports that need to be incorporated and discussed with.
What is the prospect for programmatic advertising in DOOH?
Sven: I think where the market will be trending is that soon agencies will begin to put pressure on sales houses and say, we want this done programmatically and if you cant do it, we will look for alternatives that can and will. Right now, what we encounter is a situation where agencies say they don't want to work with small sales houses because it is too much a hassle for them to include the smaller sales houses into national plans which can become quite complicated in planning and organising. But if they had a DSP that will enable them to access the inventory quickly, they would be okay with the idea. In this case, if more small sales houses work programmatically, this would put some pressure on the more larger sales houses. So I think for the needed change to come, much of the pressure will have to come from the demand side, especially from the agencies and advertisers.