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Spend for programmatic digital display advertising reached the $21bn (£13.7bn) mark globally last year and is predicted to increase to $53bn (£35bn) by 2018, according to Magna Global. But some segments of the advertising industry have been considerably slower in the uptake of programmatic than others.
Programmatic in the out-of-home (OOH) industry is yet to develop despite the significant investment in digital screen technology. So what’s the problem? In short, some 95% of OOH’s audience delivery relies upon manual paper and paste posting of classic posters, not exactly ripe for real-time trading.
And there are other issues too. The OOH sector has never had quite the same reliance on tech as other media. In order to make the shift to programmatic, the industry needs to begin to develop standardisation in software and inventory management systems.
Changeable and unstructured pricing is another problem, since automated transactions require prices to be simplified and standardised across the board.
Despite these issues, there are several developments paving the way towards programmatic adoption. First, some media owners and agencies are developing protocols and trading rules around a system called ‘pull-to-trade’. This links the inventory management systems of media owners to their major trading partners and enables partners to pull details of suitable inventory by format and location, as well as real-time assessment of classic poster inventory availability.
‘Click-to-buy’ is another important development. This enables the open purchase of a billboard through online search, transaction and artwork provision and several software companies have developed interfaces to make this work. The system effectively operates as a self-service shop enabling easy access to new customers as well as improved efficiency. It is already in use in some markets around the world.
Another advance, ‘download-to-digital’, is seeing companies develop plugins that connect online digital trading desks to the outdoor digital inventory. Integrating digital screens with the investment funds of online trading desks might create a new revenue channel for media owners.
For programmatic to really take off in OOH, this traditionally manual industry must embrace technology, and do so collectively. The industry must work to create standardised protocols for the transfer of data between the major trading parties. Similarly, industry leaders representing all key interests will need to collaborate on how best to create a future-facing transaction infrastructure that works for all players.
Collaboration is not easy for industry players more used to competition, but systemic change will not happen without it. And with the shift to programmatic promising efficiency and new revenue streams, OOH needs to develop and embrace the opportunity for more automated buy and sell transactions now.
Mungo Knott, marketing and insight director, Primesight