Programmatic advertising has powered a decade of growth in digital advertising. It’s also fueled demand for the same capabilities in other media formats. In the consolidated TV and radio industries, major suppliers, such as Comcast and iHeartRadio, have driven the development of programmatic platforms. Despite being more fragmented, the U.S. out-of-home (OOH) market is also on the “path to programmatic.”
Workflow automation tools have fueled 22 consecutive quarters of growth in OOH. Tools like automated proposal generation are reducing laborious processes to just a few clicks. However, most OOH buys are still based on asset locations, not the location-agnostic impressions that define programmatic buying. So, it is deeply troubling to see firms undermine the progress in OOH -- and risk the trust of agencies and brands -- by saying they offer programmatic solutions.
Several OOH ad-tech companies claim they facilitate programmatic buying. The most honest of these are digital display networks, which offer buys across a relatively small number of digital OOH assets. This is hardly comparable to offerings in radio or TV, let alone online advertising. Even more troubling are the firms looking to “move the goalposts” by redefining programmatic buying to essentially mean, “whatever we can do right now.” Most of these firms automate only parts of the buying and selling process.
Workflow automation platforms are valuable, but they aren’t the same as programmatic buying. The tools to create OOH campaigns based on targeted impressions are still somewhere between “limited” and “non-existent.” To claim otherwise does great harm to an industry in the midst of a technological renaissance.
Ad-tech providers who overstate their programmatic capabilities overshadow the intrinsic value of automation. Worse, they risk selling agencies and brands a product that falls far short of its promise, and devalues true programmatic tools that will come in the future.
The OOH industry has to overcome several hurdles before a programmatic solution, equivalent to offerings in digital advertising, can emerge.
-- Buyers and sellers must adopt a single “currency” for valuing individual assets. Sellers must make that data
available to demand-side platforms (DSPs).
-- Sellers must embrace pricing based on the “currency” mentioned above and programmatic demand.
-- Sellers must adopt standards for tracking asset availability in a way that can be checked in real time by DSPs.
-- Buyers must use DSPs to automate the buying process and incentivize sellers who participate in supply-side platforms (SSPs) to service aggregated demand.
These challenges need to be solved at scale. In the UK, over 500,000 advertising assets have been assigned individual 10-digit codes through a joint effort of industry trade groups called SPACE. These codes allow buyers to access information on an asset, including audience data from Route Research. They also allow sellers to easily report availability to buying platforms. These strides toward standardization and automation have accelerated programmatic endeavors since 2015, including plays by Google, Xaxis (WPP) and Rubicon Project. Marketing Week recently called this a “New Era for OOH.”
If the OOH industry wants to reach a programmatic future, transparency will be crucial. Ad-tech providers should be proud that their tools have helped fuel growth in OOH advertising, but tech partners should be wary of presenting OOH buyers and sellers with a false bill of goods. Before programmatic OOH is recognizable to users of the major digital programmatic buying platforms, ad-tech providers need to continue providing true, measurable value through workflow automation, laying the groundwork by aggregating supply and demand, encouraging transparency and communication between buyers and sellers, and supporting standardization efforts by industry groups such as the Outdoor Advertising Association of America and the Digital Place-Based Advertising Association.