The out-of-home industry is constantly evolving. From programmatic DOOH to 3D billboards, there is always innovation making it a more powerful advertising channel for brands.
Keeping up with the sector can be difficult, so each month Veridooh is speaking to experts in the field for their insights and predictions.
This week we speak to Jack Plowright, Lumo Digital Outdoor programmatic general manager.
How long have you been working in OOH? It’s been four and a half years. I came aboard when LUMO was relatively new to the market (we’d flipped the switch on our 6th screen on the morning of my first day). It certainly made for a scrappy sales pitch when you enter the ring a few weight classes down. The DOOH space was already presenting fertile ground for disruption and growth in 2017. LUMO’s position on transparency, accountability, and an emphasis on DOOH innovation really resonated. They are areas we have built our reputation on and continue to pioneer.
NZ DOOH has grown to a $100m+ NZD market. Our market has experienced a ~21% CAGR since 2017, with DOOH revenue share demonstrating a ~41% CAGR over the same period. That being said, the obvious change is just how digital the market has become.
New players in the supply chain have emerged, as expected in the digital landscape we currently operate in. DSPs, SSPs, Exchanges, Ad servers, real-time audience measurement solutions, third-party verification products, DCO solutions and location intelligence companies have revolutionised the way buyers can access, activate, and measure DOOH campaigns.
What makes the New Zealand market unique?
That it’s a village with a lot of sound people and mutual respect among operators. We are a market that is fortunate to have a healthy level of collaboration - necessary to navigate industry matters such as verification, programmatic, and industry regulations.
I don’t think there exists a DOOH market less fragmented, but equally as competitive. Due largely to our market size, the high-quality digital inventory available, and a monopoly on one particular format that holds a significant share of the market. Buyers in NZ are extremely fortunate to have access to a marketplace of this quality.
Digital penetration is at a globally-leading 70%+ of total OOH revenue. Signs that a market invested heavily in digital conversions early, positioned the format correctly, and educated buyers appropriately. Perhaps helped too by an ever short market, a sprinkling of a pandemic, and the digital conversion of highly demanded static large format inventory. Such a digital focus has set our market up well for the next phase of growth.
Predictions for OOH in 2023? What will the big trends be?
Members of both OOHMAA and IAB NZ will work to publish standards for the industry, aligning on verification, insertion orders, terminology, education, best practices, and inventory specifications.
The share of static/classic OOH will continue to decline as digital builds and conversions continue, programmatic attracts digital budgets, and the economics of static/classic commercial agreements between suppliers and property owners become unsustainable.
DOOH will establish a foothold in retail media networks, with players such as The Warehouse Group, Foodstuffs, Chemist Warehouse, and Briscoes Group predicted to enter the market. Retail OOH’s product and design must be well-considered, standards for certain DOOH retail formats established, audience measurement solutions invested in and CMS/ad server solutions properly integrated into retail media CRMs to manage and report campaigns centrally.
Greater transparency and accessibility. Verification will be a standard, hygiene layer to campaigns. There will be a shift to CPM trading and requirements for suppliers to provide share of voice audiences at a pre and post-campaign level. Live impression availability in DSPs that is based on actual network capacity. Suppliers with live measurement systems will explore near live pre-bid impression multipliers, and third-party audits on audience measurement methodologies will be a requirement for SSPs and DSPs to protect advertisers. Omnichannel DSPs to build out DOOH planning and reporting capabilities (whether that’s through development or acquisition).
Programmatic will represent at least 15% of all DOOH spend by the end of 2023, as the benefits of workflows, flexibility, targeting and measurement are explored further by advertisers.
Are enough brands taking advantage of dynamic DOOH?
We've certainly seen progress in the adoption of DCO (Dynamic Creative Optimization) over the past 12 months. And, we're optimistic that its integration into DOOH advertising will bring further growth to our channel.
Creativity plays a crucial role in the success of DOOH campaigns, but there hasn't been a market-wide emphasis on the use of DCO solutions like what we’ve seen from denstu’s D4, FCB’s Generator and OMG’s Adylic. The work being done to integrate these platforms with programmatic and CMS technologies is a strong indication that DCO will become even more prevalent in the coming year. These solutions not only allow for dynamic elements within creatives, but they also have the potential to streamline the management of creative delivery, reducing head hours in trafficking and minimising human error.
To see even more growth in the use of DCO in 2023, the industry will need to focus on addressing the lack of understanding about its capabilities in DOOH, and how to use it effectively. Additionally, the complexity surrounding its implementation and inconsistent availability across various DSPs/suppliers will need to be addressed. Ultimately, the cost of building a DCO solution needs to be outweighed by the value it brings to the campaign.
Biggest growth opportunity for OOH in the next 5 years?
Workflow automation, live data, and the application of AI to power processes and systems will be critical for the future of the DOOH market. DOOH buyers will rely on Omnichannel demand-side platforms as existing programmatic DOOH companies shift their focus to the supply side (SSPs & ad servers) and buyers prefer to activate media within a common platform. All buy types will be transacted via platform, even Share of Voice/Time campaigns. Platform fees will offset the resources required for buyers and sellers in the deal.
AI-powered creative production and ad-serving technology will simplify the generation and delivery of creative files, reducing the volume of specs needed to access multiple suppliers and formats. Instructions and attaching creatives via emails will be replaced by dynamically delivered creative via mapped VAST tags or HTML packages to the spot in the loop.
AI’s reach will also extend to supplier operations, powering audience predictions, demand modelling, and yield optimisation. Live data agreements and API applications will result in more responsive campaigns, a cleaner connection between tech stacks, audience measurement systems, and the removal of manual processes within DOOH networks.
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