Turning Point in Outdoor Advertising

A post by Christian Gehl on www.onetoone.de

Within a few years, digital billboards will outperform their printed counterparts. They combine all the advantages of online advertising, including data-driven targeting. Moreover, they offer dynamic content in the modern vertical format and various integrations with other media channels such as television, audio, and mobile devices.

While the advertising market as a whole is suffering from weakness, companies are increasingly shifting their investments towards digital billboard advertising. According to Nielsen, gross investments in this emerging form of advertising increased by €30 million in the first half of 2023. In the previous year, Digital Out-of-Home (DooH) recorded a net growth of 21%, as calculated by the Central Association of German Advertising (ZAW). This results in over €360 million flowing into advertising on digital outdoor spaces in the public domain annually, whether on streets, at train stations, airports, bus stops, on buses, subways, doctor’s offices, pharmacies, shopping centers, and at the point of sale. This happens everywhere people are in transitional spaces—whether waiting, traveling, walking, or passing time. Outdoor advertising has always connected with people’s emotions. Even in the 1990s, poster ads like H&M featuring Anna Nicole Smith sparked public debates, and many of these posters were even stolen—a golden era for marketers.

These days, the advertising industry is more concerned with trying to gain any attention at all. Due to diminishing attention spans and the widespread use of ad-blockers on the internet, as well as the mass migration from traditional media to new online stars, industry giants such as TV and print are experiencing significant revenue losses in advertising. In the first six months of this year, TV broadcasters, in particular, have suffered, with a further 9% decrease in revenue. Except for cinema, which has shown substantial growth but still records relatively low advertising investments, outdoor advertising is the only advertising category currently experiencing growth. According to forecasts by PwC and the Institute for Digital Out of Home Media, established last year, this trend is expected to continue for the next ten years.

Revenues in the Digital Out of Home (DooH) sector are expected to increase fourfold

This will lead to a growing disparity between revenues from printed posters and digital displays. Traditional poster advertising is expected to double its revenue by 2032, while digital poster screens are projected to reach four times their current revenue by that time. In just four years, DooH is expected to be larger than traditional poster advertising.

But why this trend? Digitalization brings all the advantages of online advertising to the world of outdoor advertising: DooH, especially when acquired programmatically, is quick to deploy, can be booked on short notice, and is highly adaptable. Advertisers and their agencies can respond in real-time to factors like weather conditions, time of day, regional peculiarities, movement patterns, and demographic data. An example of this is Oatly: In the summer of 2022, the Swedish oat milk manufacturer introduced a new product line and promoted its ice creams on digital billboards in highly frequented locations in Berlin. What was special about this was that Oatly could respond in real-time to differences in wind speed, humidity, and pollen levels using geotargeting to create and deliver suitable advertising content.

Algorithms generate advertising slogans

This development was made possible through the use of a technology called Dynamic Creative Optimization (DCO), which allowed an algorithm to create 100 different advertising messages during a two-week campaign period. This resulted in text targeting two specific groups, “Vegans” and “Flexitarians,” with messages like “Studies show that people who read ads while walking down the street also enjoy vegan ice cream” or “Hey vegans, pre-vegans, non-vegans, no idea what vegans means – ice cream lovers. We did this for you. And this. And also this.” And finally, “This ad is perfect if you’re curious about how humidity could affect your interest in vegan ice cream.” The advertising was displayed on a total of 136 digital screens by WallDecaux in locations such as Rosenthaler Platz, the government district, Alexanderplatz, and Unter den Linden.

The result: The campaign led to a 64% increase in purchase intent among the respondents who had contact with Digital Out of Home (DooH), compared to the control group without DooH contact. Furthermore, the campaign had positive effects on brand perception and brand recall, which increased by 30% and 44% among the respondents, respectively.

Programmatic advertising has long been established for other screens in online advertising, and now large-format displays in outdoor advertising are following suit to benefit from the advantages of digitalization.

However, digitalization is only partially responsible for the consistently strong growth rates. Qualitative improvements and numerous innovations complement technological advancements. An example of this is the Berlin agency Hygh, founded in 2018, which intends to widely introduce vertical format advertising in outdoor advertising. Vertical videos have been popular among younger generations for some time, thanks to platforms like TikTok and the trend of taking selfies. Hygh utilizes this visual preference, offering short vertical videos on its 750 screens in six major German cities, including Berlin and Munich. These short videos are displayed on columns in pedestrian zones, shop windows, checkouts, and in stores. This is one of the trends that’s moving the outdoor advertising industry, and it’s increasingly being served by major providers like Ströer and WallDecaux in various locations, particularly at train stations and shopping centers.

Another key driver of the Digital Out of Home (DooH) boom is the integration with other media to promote additional advertising measures and ultimately drive sales. Hygh consistently focuses on using multiple touchpoints in the customer journey, leading up to the point of sale. Tizian Hosch, Head of Programmatic at the Berlin-based outdoor advertising company, explains: “Thanks to the capabilities of programmatic advertising, campaigns can be managed across multiple touchpoints and channels, all through a demand-side platform. Customers can do this independently or opt for our managed service.”

Hygh is currently working with Spotify to serve audio advertising to individuals who have passed a Digital Out of Home (DooH) screen. This dual approach is expected to have a positive impact on the perception of advertising messages. Here’s how it works: “Our screens serve as the basis and targeting foundation for programmatic audio extension,” explains Hosch. “The screen locations are transmitted to Spotify through the DSP Hawk. Spotify then conducts retransmissions as audio ads. In this way, the human senses of sight and hearing are combined in two channels to create an extremely effective cross-channel campaign.” The result: After extending the DooH campaign to Spotify, the values for ad recall and brand awareness were twice as high as with a pure poster display.

Even television has recently been integrated into the mix

WallDecaux has developed a product that links its digital billboards to TV campaigns. Launched in June, TV Boost DooH is expected to deliver initial results in the third quarter, according to Andreas Knorr, Head of Marketing at WallDecaux. The combination of poster and television advertising was designed to programmatically compensate for TV viewership losses with DooH. “The basis is the provision of usage data from national linear TV campaigns on a local level,” says Knorr. “In regions with below-average TV performance, WallDecaux’s Digital Out of Home network can be activated automatically.” Croatian adtech company AdScanner is the partner that assesses, down to the second, the advertising pressure that selected TV campaigns achieved in the desired target audience.

You can find the full article by Christian Gehl on www.onetoone.de.