Why Tech Brands are Suddenly in Love with Digital Out-of-Home Ads

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Out-of-home advertising, over the years, has been misconstrued as being used only by big, traditional brands or local businesses. However, with the rise in technological advancement, the proliferation of tech start-ups and the indelible significance of technology in everyday life, companies like Facebook, Foursquare and a crop of start-ups are putting new twists on old-school advertising to build brand recognition and drive app downloads.

Boxed, an app that sells and delivers wholesale packaged-goods, is one such startup enlisting subway ads in New York to drive app downloads. The marketer launched a new subway campaign last week, taking over all ad placements on one side of subway cars.  According to Chieh Huang, CEO of Boxed “We’ve tried a lot of ROI-based ad networks, and [out-of-home] averages out if you do it right….. Even though it is more expensive, we can recoup the costs.”

One of Boxed's Campaigns
One of Boxed’s Campaigns

Huang acknowledged out-of-home ads are tougher to track than digital, in terms of how many downloads an ad drove, but both tactics are effective in acquiring loyal users, defined as people who keep an app on their phones for a long period of time.

The CEO said the public transit promos work for his company because Boxed is set up to drive sales. While download numbers are important, so is teaching people to shop from their smartphones, which requires a brand-building campaign. The company declined to provide stats but said people who see the out-of-home ads spend more money than those who see the digital ones.

“Because we do drive revenue, we’re able to make bigger bets—you don’t see a lot of games being advertised in out-of-home yet,” Huang noted. The creative on the Boxed ads are also meant to show off the advantages of shopping online, specifically for New Yorkers who buy in bulk. Other payment players like Seamless, Venmo and PayPal have all recently leaned on out-of-home to build brand awareness.

In fact, online food takeout company GrubHub Inc.—made up of GrubHub and Seamless—has used out-of-home and subway ads since launching more than 10 years ago in all of its major markets. And with 50 percent of all orders coming from mobile, the ads seem to be getting attention.

“We’re capturing people when they’re on the way home from work, when they’re hungry, so it’s natural to drive them to download the app,” said Abby Hunt, a rep for GrubHub Seamless.

East Coast healthcare startup Oscar has also made a big bet on out-of-home ads within the past year. Oscar started advertising on the subway in October 2013 with small placements.

“It was a bit of an experiment given that we are a start-up with small budgets compared to all the other health insurance companies out there,” said Veronica Parker-Hahn, VP of marketing at Oscar. “We knew we needed a way to drive awareness of Oscar, but we didn’t have the money and we weren’t quite ready to dive into the pool of TV.” Anecdotally, the ads built buzz and are now being expanded to include more placements and to reach New Jersey.

The ideology that Digital Out-of-Home is reserved for the ‘big companies’ has been disrupted by the success stories of the aforementioned start-ups as well as others who have engaged DOOH as part of their ad campaigns. Digital Out-of-Home is proven to drive brand awareness, strengthen brand position in the market as well as drive sales or revenue in the long-term.

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Source: Adweek