While mainstream ad agencies have digital out-of-home (DOOH) on their radar and are allocating dollars to the medium, digital agencies have not yet adopted or fully understood the medium’s capabilities, in a counter-intuitive digital divide, according to DOOH aggregator and strategist Adcentricity.
Digital Agencies, DOOH Networks Unfamiliar with Each Other
Exacerbating the digital divide is the fact that most network partners are completely unaware of or mostly unfamiliar with the digital agency community, which means many digital agencies will also be unfamiliar or unaware of the services or offerings available from DOOH networks.
If they are to be leaders in the industry, and make full use of the medium’s possibilities, digital agencies must ramp up quickly.
Several agency and advertiser pain-points have surfaced, making DOOH its own worst enemy in some cases, Adcentricity says in its “Q1 Digital Out-of-Home Market Review.” In part because of this, some prominent networks have failed, while others underperform against contracts and planners grow steadily more frustrated seeing the same networks represented by multiple sales forces. Network operators, meanwhile, are expressing frustration about unrealistically high expectations for measurement and accountability and a lack of consistent, predictable spending.
Too, networks have in some sense shot themselves in the foot by cutting rates when activity slows down. “This is unproductive,” the report says. “The industry needs to understand and have patience with the advertising community, and respect that the slowdown in activity is not a function of ‘price.'”
Growth in Spite of Challenges
Despite these challenges, DOOH spending activity has picked up markedly, with 2010 beginning to look like a pivotal year. Adcentricity’s booking and spending in the first quarter, for example, is up more than 1000% versus the same quarter last year, and the company says Q2 2010 is already showing a 50% jump in activity over Q1 levels.
- Automotive, financial services and telecommunications are by far the biggest categories. Domestic and import automotive ads accounted for a third of all media spending in DOOH.
- Packaged goods and entertainment brands are not yet moving as aggressively into DOOH, owing to traditional caution, demands for extensive testing and, with entertainment, a need for education on how creative will work in cases where audio is not used.
- Automotive accounted for 33% of DOOH spending in 2009.
- Retail locations were the overwhelming winners by actual spending. Of the 70 environments available across 100 networks, the top six categories (convenience store, coffee/beverage shop, superstore, pharmacy, grocery checkout, grocery general) accounted for approximately 30% of all media dollars.
- In Q2 2010, categories like food/beverage and government/political parties have increasingly begun to explore the medium.
2010 Looks Bright for Digital Advertising
The digital display advertising market is innovating on several fronts in 2010, according to research from comScore. These include the emergence of new ad units that promote higher engagement, cutting edge ad targeting techniques, the development of niche audience ad networks, and the increasing popularity of online ad exchanges to buy and sell inventory. Each of these developments is contributing to the improved allocation and effectiveness of digital ad campaigns. Marketers must maintain a critical eye on the performance of their campaigns, in relation to how both digital media and traditional media components are performing.