Commentary

OOH Digital Video Has Bright Future

At a time when traditional media, such as print and televisio,n are coping with the challenges of digital and out of home, the first ad-supported medium has been thriving.

The term “video everywhere” generally refers to video content streamed on smartphones, laptops, PC and other devices. It also means watching video content outside the home on elevators, gas stations and other locations.  

MAGNA Global forecasts an annual growth rate in ad dollars of +2.7% through 2022 for out-of-home and cinema advertising. Over those same five years, MAGNA projects a decline ad spending for other traditional media: television, radio and print. The trade group Digital Placed Advertising Association (DPAA) estimates that this year, 53% of out-of-home ad spending will be digital. 

In a media environment with some questionable content, consumers avoiding ads, audience fragmentation and clutter, out-of-home digital media has become a popular medium with marketers.

Clutter: Consumers are bombarded by ad messages. Cable networks collectively averaged 15 minutes and 49 seconds of commercial time each hour, through the years, as fragmentation grew and the number of commercial minutes expanded. It’s gotten to the point that some cable networks have announced a reduction in ad loads.

The idea? The less ads viewers are exposed to, the more likely the messaging will be remembered. Some television networks are now using six-second ads, about as long as it takes to see an out-of-home video ad.

Avoiding Ads: As clutter increases, consumers have been scaling back on the ad exposure. Among the more popular methods is subscribing to an ad free service, such as Netflix, Hulu and HBO, or the recent launches or ad free services from cable networks FX and AMC. Enabling the use of ad blockers continues to grow. eMarketer estimates that a little more than 30% of U.S. internet users will use an ad blocker in 2018, up from 15.7% in 2014.

Brand Safe Content: One of the biggest concerns from advertisers over the past year has been brand safety. As Bob Liodice, CEO of the Association of National Advertisers, (ANA) said: “There is no more important asset for a marketer than the brand. Brands are the basis for marketers' relationships with consumers and customers.” With digital-placed-based advertising, marketer’s ads do not appear near any objectionable content.

Fragmentation: Audience fragmentation is ongoing, as the competition for eyeballs continues unimpeded, driven by options with digital media and new technologies. This has resulted in declining ratings on television, due in part to cord cutting, and radio, as circulation losses mount in most print vehicles. With declining audiences, it’s not surprising that MAGNA forecasts declining ad volume for television, radio and print in the years ahead.

Many of the above factors marketers have to consider when developing a media strategy are not issues with digital OOH video. At last month’s CES, advertising executives saw the future trends, such as artificial intelligence, virtual reality, augmented reality, robotics and the “internet of things” that can potentially further disrupt the media landscape. Y

Expect digital out of home will continue to survive and thrive.  

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