Six reasons why digital out-of-home is a medium with a future

Our image of Times Square in New York or Piccadilly Circus in London is characterized by many colorful and flashing screens. There, brands promote their new products or advertise for brand awareness. But outdoor advertising is not only successful in these mega-hotspots. Thanks to digitization, out-of-home (OOH) is on the rise as an advertising medium worldwide. Six reasons why.

1. one-to-many medium without adblocker

We live in a time when online advertising has to reinvent itself again. Ad fraud, bot traffic, brand safety scandals, and too many banners on websites are making it difficult for the media genre. Banner blindness and adblockers are the consequences. In addition, the use of online media is becoming increasingly fragmented. Digital out-of-home, however, is not affected by this decline in reach. The advertising is integrated into people's lifestyles, is part of the cityscape, and is not distracting. Another advantage is that users do not have to be online to consume digital messages.

2. advertising expenditure for out-of-home on the upswing

The out-of-home category has great potential thanks to the digitization of screens. This is also confirmed by various forecasts for the advertising market. Out-of-home advertising is the only traditional advertising medium that has grown worldwide in the last ten years (Magna/Rapport); in Germany, net advertising expenditure has risen by five percent in each of the last five years. This development is due to the spread of digital screens. The revenue share of digital advertising space in the OOH market was 24 percent in Germany in 2018 (Nielsen).

3. the internet giants discover out-of-home for themselves 

Out-of-home is traditionally the métier of brands from retail, entertainment, gastronomy or tourism (Magna/Rapport). But in the last two years, the big Internet companies such as Google, Amazon, Facebook, Apple or Netflix have started to use outdoor advertising in various markets to promote their reputation or advertise new services. In Germany, Amazon is already one of the top 20 spenders in OOH.

4. programmatic advertising improves the data situation and controllability

With the increasing digitization of out-of-home advertising media, the importance of programmatic advertising, the automated buying and selling of inventory, is also growing. According to the company's own estimates, around five percent of DOOH space in Germany is currently managed via programmatic advertising. As soon as real-time bidding for programmatic out-of-home becomes established, outdoor advertising will become more attractive for marketers, agencies and advertisers: programmatic advertising promises better controllability of advertising and finer data for audience tracking, and the user journey will become even more transparent.

5. reality expands 

In the future, we will see more outdoor advertising with augmented reality. In branding campaigns, the focus will be on the experience, while augmented reality scenarios will be used more often in performance campaigns. Passers-by can use their smartphone to buy the advertised products from the ad right away, for example, or get to the landing page, the online store, or a customer advisor without a media break.

6. digital outdoor advertising works

A study by Wall Street consultancy PJ Solomon shows that out-of-home works better than the media genres of TV, radio, online and print. The subjects' advertising recall ranged from 47 to 82 percent for advertising on digital OOH spaces. TV achieved values between 22 and 62 percent. Figures from Nielsen show that DOOH also influences purchase decisions and promotes sales. An analysis of video ads on digital screens in supermarkets (in-store TV) showed that the advertised products generated between eight and 181 percent additional sales, depending on the sector.

Jean-Paul Daniel, Managing Director of Kontor Digital Media (KDM), emphasizes that many advertisers are still cautious when it comes to digital out-of-home. Apart from the big spenders, many are familiar with classic outdoor advertising, but not with the possibilities of digitization in this area: "The genre now needs reliable data that can be used in real time, compatible key figures for measurement, and functioning integration in analytics tools or marketing suites. Above all, it needs pioneers among advertisers who trust Programmatic-OOH and test the possibilities. Best practices will pave the way to the outdoor advertising of the future."