IN DEPTH: Advertisers learning to love DOOH, slowly
Financial services, telecommunications and cars are more significant advertising categories for digital out-of-home in the U.S. than consumer packaged goods (CPG), according to new research from Adcentricity.
Yet despite the reluctance of CPG manufacturers to adopt the new medium, advertisers in other categories regard retail networks with favour – going against the accepted wisdom that DOOH is most effective for advertising close to the point of purchase.
“Networks operating in retail venues are dominating DOOH spending, following the same patterns as traditional media spending – with automotive, financial services and telecommunications by far the biggest categories,” according to Adcentricity, an aggregator which represents about 100 networks and 195,000 screens across the country.
Indeed, automotive represented a full third of all DOOH spend in 2009, although it was markedly down in the first quarter of this year, says the firm. The travel and retail sectors are also showing growing interest in the medium, as are companies addressing the Hispanic market, which have historically relied heavily on out-of-home media such as billboards.
CPG companies, however, remain leery. They “are traditionally followers when adopting new ad media into their marketing plans – their low-margin/high-volume business model requires careful use of dependably proven media. Therefore, they remain cautious, and require significantly more testing before committing dollars,” suggests Adcentricity.
It also says that entertainment brands are unsure how to use DOOH networks that don’t employ audio – and research from Arbitron, cited by Adcentricity, showed that 51 percent of consumers at newsstands with audio-enabled digital signage didn’t notice the sound anyway.
2010 will be a “pivotal year” for DOOH in the U.S., according to Adcentricity, which says the value of digital out-of-home media that it booked in the first quarter was up ten-fold on the same period in 2009.
And Adcentricity’s optimism is backed up by the first quarter’s Business Barometer survey conducted by Digital Signage Expo, which found nearly all in the DOOH business are positive about the future and expect revenues to grow in the second quarter.
That research also reinforced the dominance of retail locations, while a separate “state of the industry” report – the Platt Retail Institute’s North American Digital Signage Index – similarly suggested widespread confidence.
The bad news
However, advertising agencies are still not entirely convinced that DOOH offers them a straightforward and reliable media buy, although mainstream agencies are – perhaps ironically – keener than the specialist digital shops, says Adcentricity.
“Several agency and advertiser points of pain have surfaced, making DOOH, in some cases, its own worst enemy. Some prominent networks have failed, while others struggle with outages and underperform against contracts. Price integrity is steadily at risk, and planners are growing frustrated seeing the same networks represented by multiple sales forces.
“The agency community has watched networks come and go in DOOH’s formative years, and isn’t willing to risk looking foolish to its clients because of non-performance or under-delivery. The pervasive attitude is this: ‘Build a quality product at scale and we will spend.’”
www.adcentricity.com
www.digitalsignageexpo.net
www.plattretailinstitute.org
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