Direct-to-consumer (DTC) brands have figured it out first again. These aggressive and counter-intuitive marketers have found one of the oldest forms of advertising to be the best valued and often most effective.
DTC brands like Casper mattresses have proven that out-of-home (OOH) advertising (which is now digital and updated in real-time) has come a long way from P.T. Barnum circus posters and quaint roadside motel billboards.
The funny thing is: OOH is often still priced like it’s a sleepy relic in the past. This has created a rare moment for marketers. One where the value far outweighs the cost, at least for this short window of time.
For a little context: U.S. OOH is an $8 billion industry. While that may seem like a big number, know that OOH has not been able to grow its share of the U.S. ad market for the past 20 YEARS, remaining at only 4%. Compare this to the UK, China, and Australia, where OOH share is more than twice that! There is easily room for OOH to grow into the $20 billion industry and fast. All it has to do is tap into its data capabilities.
In recent years, OOH had digitized its static platforms from a visual standpoint but had neglected to digitize the medium itself. Today it’s a different story. Campaigns can be updated in real time using location-based and behavioral consumer data. The increase in accessibility to consumer data has given marketers the opportunity to create highly relevant, in-the-moment messages and to improve advertising affinity overall.
Digital-out-of-home (DOOH) is interactive by reaching larger audiences in an engaging way that print, TV, radio, and social media platforms simply cannot do. Since you cannot "Ad Block" or turn off OOH, it possesses under-realized capabilities that unite the physical and digital space. Waze, a Google-owned company for drivers to find the quickest routes, has really helped evolve OOH advertisement. By using geofencing, the Waze app actively detects OOH ads the drivers are exposed to and then offer them coupons or digital ads on their phones.
Then there’s Casper. The emerging DTC brand, has invested significantly more than the average advertiser in the OOH space. In recent years, they have exponentially grown their market share and have brought the DTC mattress market share up to 20%. And it isn’t just DTC brands, according to the OAAA, tech companies are some of the highest spenders of OOH. Apple increased their investment by 17% in one year. In the same time frame Google’s spending went up by 108% and Amazon the ‘tech giant,’ a disrupter in all industries, spent 285% more on OOH.
Remarkably, OOH inventory is still priced much lower than it’s worth. P. J. Solomon’s SQAD analysis and Amplifi’s Proprietary Estimates highlight that CPM’s for OOH can be as low as a $5 average, whereas video channels generally charge six to 10 times that amount. This is because significant parts of the inventory are unaudited and unvalidated. Stakeholders struggle to prove OOH’s true value as the industry has not thoroughly documented ROI or attribution. Yet, OOH continuously proves to be the greatest value for marketers since OOH’s unaided recall rates are at 40% and DOOH’s are at 47%, clearly surpassing mobile at 35% and television at 22%. Furthermore, according to the OAAA, OOH is 328% more effective at driving online activity than television.
The OOH industry has correctly focused its efforts on making consumer data and digital dynamic content the crux of the industry. As a result, it won’t take long for the U.S. industry’s full potential, and its rate cards, to catch up with the rest the worlds. Now it’s just up to mainstream marketers to catch on.
Christian Vollerslev is president of Posterscope USA.