Out-of-Home (OOH) is one of the oldest forms of communication. In fact, despite an ever-changing media landscape, the medium has managed to hold its own because of one simple fact: it is a high-visibility medium with the ability to reach massive audiences.
In Pakistan, the OOH medium has historically remained under-regulated and lacking the tools to quantify both effectiveness and quality despite the excessive costs involved. As a result of this lack of measurability, agencies, advertisers and vendors (the three primary stakeholders), adopted the view that apart from size and location, all OOH formats were worth the same. All this combined led to the unchecked expansion of the medium, with brands blindly acting on international research insights, which identified the medium as the second most effective (after TV) in terms of reach. This approach resulted in an excessive oversupply, with billboards, pole signs and streamers cropping up everywhere, leading to an across the board devaluation of inventory. It also raised issues about environmental pollution and even more importantly, public safety. Finally, taking notice, in 2016 the Supreme Court ruled that all outdoor advertising in violation of Karachi’s bylaws should be removed. The result was that 70% of OOH installations in the city were removed. The financial impact of the decision can be gauged by the fact that between FY2014-15 and FY2015-16, OOH revenues increased by a mere Rs 0.52 billion while its share in the media spend decreased by one percent.
According to Ahsan Sheikh, CEO, Kinetic Pakistan, “while in the short-term, the ban spelt doom for the medium because Karachi accounted for 35% of all OOH revenues, it forced industry stakeholders to reassess their approach and look at alternative OOH formats.”
A major step in this reassessment was the organisation of a vendor convention platform in 2017, which brought together vendors, agencies, advertisers and technology companies under one roof for the first time. Spearheaded by Unilever, the objective of the initiative was to ‘explore the potential of digital in creating new synergies, since conventional OOH practices had become redundant’. According to Uzma Khan, Head of Media, Unilever, “conventional OOH installations were static, run-of-the-mill and boring and stopped making the required impact. On the other hand, Digital OOH (DOOH) brings with it the opportunity to create advertising that grabs attention and engages customers through experiential marketing.”
Internationally, DOOH has taken off in a big way and PricewaterhouseCoopers have predicted that DOOH ad revenues will overtake traditional media spends by 2020. The ‘Ahead of the Curve’ AOTC 1.0 – Signs of Tomorrow Digital Conference’ organised by Kinetic Pakistan last month presented Aurora with the opportunity to speak to local and international industry leaders about what makes DOOH an effective advertising medium and how programmatic can address the issues of measurability, viewability and transparency.
A quick survey of the people attending the conference revealed that for most of them, DOOH equals “videos playing on OOH screens.” However, the experts Aurora spoke to qualified this perception as a myopic view of a complex medium. For them, DOOH is “a dynamically-served visual medium that reaches consumers on the move, with advertising that is targeted, cannot be avoided and always above the fold.”
Seen from this perspective, DOOH advertising offers two important benefits. Firstly, consumers are exposed to the message whenever they are on the move (the exposure being limited only by the number and location of DOOH screens). Internationally, DOOH installations are a common fixture in metro and bus stations and are considered very effective in developing reach. However, in Pakistan, given the sorry state of the public transport system, DOOH screens targeting people standing at bus stations have limited scope. The opportunity lies within malls, which have become ideal locations for DOOH screens, especially given that 70 to 80% of the traffic there falls within the target profile of FMCG brands (the product category that uses OOH the most). Secondly, DOOH provides an answer to the most pressing question for advertisers today across all media: how to serve advertising content without intrusion? Dennis Kuperus, Global Head of Innovation, Kinetic Worldwide, points out that, “DOOH ads don’t ask to be clicked or shared and don’t have to be viewed through to completion; they are passively and not actively consumed.”
In his view, registering a brand’s message through DOOH hinges on two factors alone: creative impact and timing. A case in point is Coca-Cola’s #ShareACoke campaign executed last year in Pakistan. The DOOH component of the campaign involved multiple LED screens installed at high-traffic areas on major thoroughfares. As traffic would stop at the signal, a message asked people to SMS their names to Coca-Cola. Messages were randomly selected and the screen would then flash a message of “Share A Coke With...” followed by the name of a person and the iconic image of the Coke bottle. The instant brand response to consumers, displayed on an imposing, brightly-lit screen made the campaign a huge success and generated talkability on digital as people shared photographs of the screen with their name.
Despite this, the number of DOOH campaigns remains limited in Pakistan and only a few MNCs have proved willing to invest in the creative and technological resources in the medium. This is not to say that DOOH is not making a difference. A look at statistics indicates that between FY2015-16 and FY2016-17, OOH ad revenues increased by 33%, thereby bringing the medium’s share to 13.5% in the overall media pie (source: Aurora Fact File FY2016-17), making it the highest increase registered by any media. Furthermore, Lahore’s entire OOH landscape has almost completely been digitised (at 55%, the city currently generates the highest OOH revenues).
As DOOH becomes more widely used, the issue is how it can be sold more efficiently. Traditionally, running an OOH campaign meant that media buyers had to book months in advance, with an average campaign life of a few months at least. Now however, with DOOH, there is an opportunity to take advantage of the ‘programmatic promise’. (see Box below: Peter Choo, CEO, Kinetic Malaysia, on the benefits of programmatic.)
The big advantage of programmatic is that advertisements are 100% viewable. Consumers cannot run ad-blocking software on DOOH installations and this is a huge advantage for brands. DOOH and digital advertising have a lot in common – both can reach the right target, at the right time, with the right message – with a very significant advantage for DOOH; you can guarantee that people are actually going to see your ad.
Just like any other programmatic buying channel, when media buyers look to purchase DOOH ad space, screens and installation selection is based on a set of parameters that include the audience and the budget. Throughout the duration of a campaign, advertisers and agencies can adapt or change the creative ad displays in real time. Perhaps more significantly, brands receive real-time reports of the number of exposures and impressions for a campaign (they are recorded by programmatic software). As a result, advertisers have the option of adjusting budgets if their daily or weekly campaign goals are consistently missed, an advantage not afforded by any other mass media. Not to be missed in this evolution is the fact that OOH – having long been criticised for lacking measurability – is now affording advertisers transparency, real-time budget control and reportage.
Yet, despite the increasing buzz surrounding DOOH, industry insiders are of the view that there is a long way to go before DOOH billings in Pakistan have a chance of offsetting OOH revenues. What is clear, however, is that the technology to develop a DOOH ecosystem, the networking capabilities and infrastructure are present in Pakistan. In Sheikh’s opinion, once government bylaws regulating the installation and taxation of DOOH screens are in place, industry stakeholders will be quick to adopt DOOH given the opportunities it provides to effectively reach a mass audience on the move.
ANUSHA ZAHID: What are the benefits of programmatic for advertisers and media owners?
PETER CHOO: Programmatic is an online approach of serving ads to the customers in contextual and data-driven form. Contextual means relevant to customers. It has to do with time, weather and mindset. The data-driven aspect has to do with people; their data is analysed and used to serve ads that are relevant to them. Behaviour, interest and location are major points that are collected and utilised. Via programmatic, advertisers can display contextually relevant messages to different groups at different locations; they can even customise their message to the relevant audience in real time. For programmatic, media space is bought based on audience profile and CPM (Cost Per Thousand) which can be measured.
AZ: How is CPM measured?
PC: It has to do with traffic, which is measured in the form of cars that pass by (if it’s an outdoor screen) or people who are moving around (in case of an indoor screen). The advantage in programmatic is that in this medium, you buy by audience and not by screens. Although buying for relevance may be a little expensive, you can choose not to buy when the ad is not relevant. For example, if you are advertising at a train station, then you buy the ad only around the time when the train arrives and there are people at the station. Once the train departs and there are less people on the platform, you can opt to not buy the ad during that time.
AZ: How will the programmatic help OOH?
PC: OOH programmatic will open up new opportunities, rivalling online media dominance. Advertisers will be more willing to invest in OOH. As it involves technology, new entrants could come from online media players or technology-centric media companies.
AZ: What is the concept of ‘data economy’?
PC: In the past when talking about planning, it was all about strategy. You hired people to think about what is to be done next. Now, we are talking about machine learning. Although humans are more intelligent, they tend to be forgetful and take decisions based on circumstances or mood swings; machines are different. If you have 10 intelligent people putting in all their learning in a computer, the machine will replace human intelligence, and eventually replace humans for data. Earlier, we called this information technology (IT); now we call it data technology (DI).
AZ: How will data technology affect traditional media planning?
PC: The implementation of data technology will overshadow online media planning as most planning and buying will be automated. Media planners will only have to look at data to make decisions. Eventually, you will have a different group of media planners; in fact, you may not have a lot of media planners in the future. What you will have will be campaign planners to look at the overall campaign and amalgamate media accordingly to make it effective and deliver the campaign to the client. There will be no need to call media owners to check availability, negotiate pricing or even plan which screens to buy. You just have to buy the strategy and the data that is relevant to the client because everything will be pre-analysed for you. The availability of processed data will help marketers justify their media investment decisions. There will come a day when it will become so simple that you will be able to do it from home, exactly the way you book a plane ticket; you don’t need a travel agent anymore.
AZ: What challenges are advertisers likely to face in implementing programmatic in their campaigns?
PC: There are two sides to the ad exchange: the demand-side platform (DSP) and the supply-side platform (SSP). The DSP is for advertisers or agencies who want to buy for their clients. The SSP are the media owners. The need will come from the DSP first, which is easier. The problem is the supply side. The reason is because they are not technology-driven, they are billboard people. Secondly, the supply side has a certain relationship with customers; they don’t want machines to take over their selling. So, although clients will be ahead of the curve, media owners will take time to rationalise this new method of transaction. I think in the next five years, most media owners will prefer to sell media space in standard formats.
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