Mirroring the growth of digital
Published in May-Jun 2018
AYESHA SHAIKH: How have mindsets towards DOOH changed in the last decade?
DENNIS KUPERUS: When I co-founded Librium.TV, a DOOH company, in the Netherlands, in 2003 (in partnership with Radjen van Wilsem), we were the first in the category. After winning the McDonald’s account, we installed our DOOH network at all their outlets and at most public transport stops in order to target a large number of people. The industry was just taking off internationally and this proved to be a great learning experience. In those days, we did not refer to the medium as digital out-of-home; we called it ‘narrow casting’ because it was ‘narrow’ in terms of the niche groups that were targeted and because the ads were only viewable outside McDonald’s restaurants. The business case for implementing DOOH has become easier now because the hardware, technology and connectivity are cheaper and more easily available. Interestingly, our advertising approach of digitising the traditionally static OOH media caught the eye of Telegraaf Media Groep (one of the largest media groups in the Netherlands) and they eventually bought us out. They did so, because even 15 years ago, they realised that the younger generation still consumes news, but not in the traditional way and they wanted to ensure that they continued to connect with them by taking advantage of the DOOH model that we had deployed successfully.
AHSAN SHEIKH: In Pakistan, the perception used to be that an OOH campaign meant putting up billboards on the roads. There was no science, planning or rationale to explain why OOH was an advertising medium in the first place. In fact, the platform was known as ‘outdoor’. We began referring to it as OOH because Kinetic believes that every touchpoint where we can engage our consumers once they step out of the house is our domain – be it roads, malls, parks, offices or retail spaces. When I became CEO of Kinetic Pakistan in 2012, our billings were approximately Rs 650 million; now, we have exceeded Rs 2.6 billion. In those days, the concept of incorporating technology or digital in OOH was alien. It was thanks to collaborations with Kinetic Worldwide that we gradually started investing in the infrastructure for implementing DOOH campaigns. In a short span of time, as our DOOH campaigns began registering with advertisers (mostly Unilever, Shell and Coke), there was a shift towards DOOH from both agencies and advertisers.
AS: What factors have driven the growth in DOOH?
DK: Today, everything and everyone is connected. The upsurge in internet-enabled devices has provided a larger platform for brands to move into the OOH segment. The fact that people are consuming content in new ways and using new mediums has been an important driver of growth. In the UK, almost 50% of OOH billings are through DOOH because traditional media groups have seen the benefits of using technology in OOH and have started investing to develop the category and increase the number of screens so their content can be distributed in innovative and engaging ways. This has created a tipping point and I see a similar trend happening in other countries.
AS: Although there has been consistent growth over the past five years, it takes time to bring more brands on board. It is important to be media-neutral when developing a media mix; unfortunately in Pakistan, except for a few MNCs, the mindset is to allocate the maximum budget to TV, followed by print and then divide the rest between radio, OOH and digital, depending on the inclination of the marketing manager. However, the fact is that consumer and market dynamics today call for a deeper understanding of the target audience and their media consumption habits and this data should then be used to map the media accordingly. Another factor hindering the growth of OOH in general and DOOH in particular, is that brands undertake campaigns in a sub-optimal way. For example, if in order to achieve the coverage required, additional investment is required to increase the number of screens or panels, clients are unwilling to do so. As a result, their campaigns turn out to be less effective than planned, which gives rise to the idea that OOH does not deliver results, when in fact the problem is that advertisers are not making the required investment to meet their target. On the other hand, media (site) owners are reluctant to invest in technology because they don’t understand how it works. They hardly give any thought to what location should have which format. If one brand is using pole signs, everyone follows.
"DOOH allows brands to serve the right content in the right context and with maximum impact. We use insights, powered by data and technology, to understand the audience journey (physically and emotionally) when they are out and on the move."
Dennis Kuperus, Global Head of Innovation, Kinetic Worldwide
AS: What are the most significant selling points of DOOH?
DK: The most significant benefit is that there is no question of intrusion; unlike other media, people do not go out of their homes with the intention to look at OOH content – it is simply there. The benefit of DOOH is that the advertising is not interrupting content consumption in any way. DOOH allows brands to serve the right content in the right context and with maximum impact. We use insights, powered by data and technology, to understand the audience journey (physically and emotionally) when they are out and on the move. Our planning approach is focused on engaging with audiences on the move, at specific locations and at moments in the day most likely to influence their behaviour and decision. Traffic and weather information are two of the most commonly used data points in DOOH to evaluate the timing and kind of campaigns that are developed.
AS: OOH is the second most effective medium after TV in terms of reach. Brands must understand that audiences have evolved. Gone are the days when they had to stay home to watch a favourite TV show –almost all content is available on demand. Research indicates that we spend almost 70% of our waking lives (usually between 8 a.m. and 8 p.m.) out of home and brands cannot afford to wait for people to return home to communicate with them. We need more research and data to understand what do people do during the time they are out of home and where. Another change that is not highlighted enough is that all traditional media has become digital (TV on demand, e-newspapers, apps to listen to FM radio channels anywhere in the world), so OOH media must go digital as well so that brands can leverage the combined benefits of OOH and digital through the use of contextualised messages. A major hurdle is lack of data and we have partnered with GroupM to carry out a 3D study of about 50 towns (rural and urban) to understand how consumer behaviour has changed and where people are spending the most time when outside. The problem is that typically in consumer-focused researches, the questions are always the same and therefore no new information is uncovered and the thinking behind media planning and buying remains static. I mean, is the 30-second TVC even relevant today?
AS: If data is required for effective targeting, does this raise issues of privacy and data security?
DK: In Europe, the GDPR (the European Union’s General Data Protection Regulation) has come into effect to safeguard consumer privacy and equip them with greater control over how their personal data is gathered and used. This will have a significant impact on the digital industry, as it is no longer permissible to track and store data without the explicit permission of the concerned individual. Working with aggregate data is still permissible and that is what we use in the OOH industry. Since it is a ‘one-to-many’ medium, what is relevant for us is to observe what groups of people are doing so we can target them. Another important aspect of OOH media is that unlike digital, it is not intrusive. If you search for ‘holiday destinations’ online, ads for hotels, airlines and other services for that country/city will keep popping up when you browse. This doesn’t happen with OOH. Our focus is to bring the positive elements of digital into our ecosystem, not the negatives.
AS: Would you agree that so far it appears that it is the multinationals that are using DOOH rather than smaller companies?
DK: Internationally, a few smaller brands have started to come on board because they realise the benefits of cost-effective, targeted reach. As DOOH becomes more widely accepted and used, the cost of technology and connectivity and the hardware required will automatically go down. This has been the trend globally, and will happen in Pakistan as well. The growth in DOOH will be similar to that of digital. When advertisers saw the benefit of using digital, digital spends began increasing and I see the same happening with DOOH. Mobiles can play a very important role in this growth because people use mobile devices when they are out of home. Out-of-Home plus mobile is referred to as ‘Combination OOH’ and I see an opportunity for both these mediums to grow together. Mobile technology has the potential to amplify the OOH message and extend reach by serving it to consumers on their mobile screens.
"The OOH and DOOH landscape in Lahore is far more advanced than Karachi’s because of the support of the Punjab Government, especially in terms of standardising bylaws. The same needs to happen in Karachi."
Ahsan Sheikh, CEO, Kinetic Pakistan
AS: There is a perception that digital OOH is expensive because you need to buy at a certain scale and pay for a week or a month. Programmatic will change this, as it will enable brands to include DOOH in their media mix even with limited budgets. With programmatic, one has the ability to control when the ad is ‘on’ – when traffic flow is at a certain level and when weather conditions meet a predefined criteria (sunny, humid, rainy). Programmatic will help smaller scale businesses take advantage of DOOH. However, for a programmatic ecosystem to flourish, the software needs to be standardised and this requires collaboration between media owners. They can have their own hardware, but the Demand Side Platforms (DSPs) and Supply Side Platforms (SSPs) must mesh. When that happens, you can buy DOOH inventory based on audience profiles and trigger events with a simple click. The entire buying process becomes simple and scientific, with the option of adjusting budgets in real-time according to the data coming in.
AS: In addition to standardisation, are there other issues constraining the growth of DOOH?
DK: It is imperative that OOH has a common measurement system in place as this will then accelerate its growth. This happened in Australia, Canada and the UK; before that, the credibility of the medium was questioned, despite visible results. The common perception was that OOH works on gut feel as opposed to numbers and should therefore be approached with caution.
AS: There are two issues. Firstly, although we have an OOH measurement system called MOVE (Measurement of Outdoor Visibility and Exposure), it has yet to become industry currency, because data is not properly understood (there is no concept of deriving insights from it) and there is lack of capacity among media owners, agencies and brands in terms of technology. Hopefully things will change; MNCs such as Unilever, Coca-Cola and Nestlé have come on board and this may generate more interest in having a uniform measurement system. A problem that we are consistently faced with is the mindset of media owners and advertisers who want to charge for sites based on what they have been doing historically. Unfortunately, this approach is not relevant anymore. For this medium to survive, we need structure, transparency, standardisation and measurement. Once these four pillars are in place, it will become easy to scale up. A major issue is educating the government about how OOH works so that before they grant permission to put up a DOOH or OOH installation, they are fully aware of the costs of different screen formats and pricing structures and will therefore modify taxation percentages accordingly. The OOH and DOOH landscape in Lahore is far more advanced than Karachi’s because of the support of the Punjab Government, especially in terms of standardising bylaws. The same needs to happen in Karachi.
Dennis Kuperus and Ahsan Sheikh were in conversation with Ayesha Shaikh.
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