Several factors can be said to influence the Out-of-Home industry, from technological advancements to regulatory stipulations, market trends and consumer behaviour. However, some factors are more subtle and less obvious like the aforementioned but play a significant role in shaping the industry. An understanding of these factors will put you at an advantageous point and equip you to serve your clients better. Here are 4 factors that are shaping the industry indirectly:
Marketing Return On Investments (ROI)
Many businesses do not have the elaborate marketing budgets that they used to, and marketing executives are under more pressure to show an ROI for all major marketing expenses, including advertising. Because the OOH industry has been slow to adopt and promote performance metrics, many marketing executives have moved away from spending money on OOH advertising and have moved to digital and other marketing forms that readily measure performance. In order for OOH to win back a greater percentage of the marketing budget, it needs to get better at measuring performance and demonstrating an ROI.
Through technology, big data, and creative campaigns, the OOH industry is on the verge of being able to accurately measure campaign performance. Also, by creating a special offer promoted through OOH, retailers can track requests from customers measuring performance. The OOH industry will be able to command a greater share of marketing budgets when they promote their ability to track performance through these and other strategies.
One of the reasons digital marketing has taken off over the last few years is its ability to efficiently provide performance metrics. This makes it easy for marketers to test what’s working and what is not, and quickly switch to higher performing campaigns. One of the major growth areas of digital is programmatic buying — software that aggregates, books, analyzes, and optimizes online display ads. How is programmatic buying affecting the OOH advertising industry? Programmatic buying promotes self-serve, targeted, automated ad buying with fast turnaround times and corresponding performance metrics, few features of which are currently available in the OOH industry. Clients are now requesting proof-of-performance metrics beyond impressions. The OOH agency who can provide these services for their clients will have a competitive advantage over those who maintain the status quo.
Social media has exploded in usage over the last 10 years. According to Pew Research Center, as of January 2014, 74% of online U.S. adults use social networking sites. Facebook has the highest usage, with 71%, followed by LinkedIn at 22%, Pinterest at 21%, and Twitter at 19%. Digital billboard manufacturers (such as Formetco, and others) and OOH agencies are developing creative ways to use social media to drive revenue and build brands. From controlling messages and changing ads, to displaying customer appreciation within digital billboards, social media is becoming more intertwined with the OOH industry.
Many businesses have turned away from elaborate, lengthy marketing campaigns in favor of smaller campaigns that have greater impact. The OOH industry is feeling this trend with shortened lead times and requests for shortened campaign lengths. Agencies are being asked to churn out creative content, pre-plan tweets, respond to live events, and turn around micro-campaigns at a rate faster than ever before. This trend requires ad agencies and media owners to become more nimble and to react the market faster – they need to have a more agile marketing approach. The mantra is “I need my campaign to start in a few weeks rather than 3-6 months”. The OOH industry needs to respond to the market accordingly, and become faster at fulfilling these needs.
Culled from: AdSmart