Why OOH Advertising Is a Potential Winner In the Battle for Eyeballs

Editoramp8217s Note This column is a followup to The State of Out of Home Advertising 2015 a recent column Nurlan Urazbaevamp160posted at oaaaorg As recently as 15 years ago people had little choice but to tolerate 1520 minutes of TV commercials in exchange for 4045 minutes of programming content Skipping ads was not possible unless one took a bathroom break Stealing content was not possible eitheramp160 Because of that TV networks and radio stations had the upper hand over consumers and consequently over advertisersMedia empires were built on this model After several decades of undisturbed television monopolies the TV networks the agencies that were built to buy TV and the audience research firms proceeded to believe that this bonanza might go on foreverFast forward to 2015The onair radio market share is squeezed by streaming platforms MP3 players satellite and Internet radio radio apps for phones and incar digital devicesTraditional TV viewing share is being eroded by videoondemand streaming services and content piracyTelevision still commands big ad budgets but they are consistently getting smaller as the money is being shifted to new often more promising advertising optionsThere is abundant evidence that ad agency holdings have been caught off guard by the recent changes in media technology and the resulting complexity most notably by the new weapons in the hands of the consumers the smartphone and its younger cousin the tabletAs Publicisamp8217 Chief strategist Rishad Tobacowalla said in one of his recent presentations amp8220It is clear that the consumers are now ahead of advertisers and advertisers are ahead of agenciesamp8221The recent record number of agency reviews by biggest brands is another sign of a major turmoil in the ad marketsOut in the field new technology and consumer behavior are changing the media world faster than the traditional ad industry establishment can adapt to them The term amp8220disruptionamp8221 is now used in almost every article about advertisingWhen I try to make sense of the changes I see two major trends in the evolution of advertising mediaTrend Oneamp160The Legacy amp8220Interruption Modelamp8221 is Trying to SurviveTo mask the problems of traditional television most stakeholders started calling it amp8220videoamp8221 Their new mantra is now amp8220crossdeviceamp8221 or amp8220multiscreenamp8221 video viewingIt is true that people are watching more videos on more screens than ever before According to YampampR CEO David Sable in 1999 there were just 26 TV series In 2014 there were 1715Considering that apart from TVs the other screens are desktops laptops tablets or phones we are simply talking about viewing entertainment content online via devices that are not TV setsIn essence the concept of amp8220following the consumers on their multiscreen journeyamp8221 by inserting commercials on every device is still the good old and much hated interruption model disguised as something new and shiny because it has the words amp8220digitalamp8221 and amp8220mobileamp8221 in itThe Wall Street Journal reported last year that amp8220the only thing consumers hate more than TV ads are online video commercialsamp8221 The survey results are a warning for the long list of publishers digital companies and media companies that are pushing more and more video content online with amp160hope of grabbing a piece of the online video ad market says the paperAlthough obsolete the interruption model will not go without a fight as too much money is at stake While it strives to survive consumers are exploring numerous alternative ways of obtaining quality content that have become available in recent yearsTrend Two Entertainment and News Content are Being Separated from AdvertisingThe nearmonopoly status of the interruption model has come to an end Platforms that give people access to premium content without ads are growing in a phenomenal way The best examples of that are Netflix iTunes and music streaming platforms Reports suggest that Netflix is not quite profitable yet but its 65million subscriber base keeps growing and the company spends millions on top quality contentWithin traditional TV itself DVR digital video recorder usage soars allowing viewers to skip commercials According to Leichtman Research Group more than three quarters 76 of US homes have a DVR subscribe to Netflix or use videoondemand from a cable or telco provider up from 70 percent last yearApart from eliminating the annoying interruption factor the new platforms also offer people much more flexibility compared to the classic onair or cable TVOnce Netflix or its competitors figure out how to get a sufficient flow of quality content this formula will be set to prevail over the interruption model Whether itamp8217s Netflix or not it is only a matter of time before someone makes this model profitableThe Uprising of the ConsumerIn 2007 studies said that every US citizen was bombarded by more than 2000 advertising messages a day Today this number has grown to 5000 daily messagesAs we established 1520 years ago people had no choice but to tolerate commercials The difference today is that consumers are amp8220armed and dangerousamp8221 They can timeshift to amp8220zapamp8221 the TV ads with their DVRs They can block ads on the Internet They can subscribe to adfree content services They can amp8220cut the cordamp8221 Unfortunately many resort to stealing the content via piracy sitesI could have named this chapter amp8220You Can Lead a Horse to Water but You Canamp8217t Make Him Drinkamp8221 If the ancient Brit who came up with this proverb lived today he or she might have rephrased it to amp8220You Can Target the Eyeballs But You Cannot Make Them Viewamp8221Decades of ads unceremoniously interrupting people39s leisure time have finally resulted in a massive backlash of ad rejection Consumer demand for ad avoidance has produced an abundant supply of technologies for ad blocking and ad skippingThe story of Taxi TV is a classic case of an interruption model used in digital OOH media For nine years NYC yellow cabs had small TV screens installed in the back of the front seat that doubled as a credit card payment terminal The screens ran loops of news and entertainment video clips interspersed with ads It would seem a perfect scenario for advertisers a captive audience directly in front of the screen with nowhere to escape for a good few minutesIn October 2015 the NYC taxi commission voted to pilot a new payment system in order to eventually replace Taxi TVThe commission said the decision followed mass complaints by riders about the monitorsamp8217 quotblaring noise repetitive programming and uncooperative power buttonsquot as reported by New York TimesInterruption is what gave advertising the bad reputation and traditional media owners are now paying the price with declining audience numbers and shrinking revenuesThe adblocking issues plaguing the online advertising industry are also largely a reflection of the consumersamp8217 response to interruptionbased ads such as popups popunders prerolls and whatever other formats were created to replicate the obsolete TV ad model onlineMeanwhile the nonintrusive online banner ads and Google AdWordsamp8217 contextual ads face little oppositionThe consumers have stated their choices loud and clear Content is good Interrupting ads are badSomehow in our antiad rage we forgot that by its nature advertising is supposed to give us information about the products and services designed to improve our lives The irony is people never stopped looking for that information They just donamp8217t like it being shoved down their throats when busy doing something elseTobacowalla used this metaphor in his presentation todayamp8217s consumers empowered by smartphones are the modernday David who is now capable of defeating Goliath marketersAlong with amp8220disruptionamp8221 the word amp8220revolutionamp8221 is used a lot today to describe how technology changes mediaAccording to Marxist theory a amp8220revolutionary situationamp8221 occurs when amp8220the masses no longer want to live the old way and the rulers are no longer able to govern the old wayamp8221 If we apply these criteria to whatamp8217s happening in the medium that still gets the biggest ad budgets television we will see the makings of a classic amp8220revolutionary situationamp8221 which often leads to an actual revolutionWhy OOH Stands to Benefit from the Crisis of the amp8220Interruption Modelamp8221Against the backdrop of consumer revolt and chaos in the ad markets OOH advertising has emerged as a clear favoriteOOH appears to be the most straightforward and honest medium that works best in pure play advertising mode There is no need for filler content therefore no interruption and no negative associations take place People see OOH ads while they are on the go when they are most receptive to useful informationOOH is already the only true mass medium left It is used equally well in local regional and national campaigns This factor alone can be a guarantee for the mediumamp8217s bright future as more brands are rediscovering its value But there is much moreOddly in the digital age the main metric for the interruption model is still impressions Anyone who works in ad sales knows itamp8217s a speculative and inaccurate currency To add to the ambiguity the existing audience ratings are mostly those of the programs and not so much of the commercialsBeing held to a higher standard of measurement to prove itself OOH has gone beyond the impressions Its recently born symbiosis with mobile engagement provides instant and irrefutable proof of campaign effectiveness The integration of OOH as a mass medium with smartphones is probably the biggest real disruption in the advertising business since Google AdWords introduced amp8220payperclickamp8221amp160The next frontier in achieving a greater return on the OOH ad investment is mobile purchases triggered by OOH ads Such transactions are being made easier every day as the technology gets upgradedThe new realtime targeting capabilities for OOH are also made possible by using the anonymous mobile user location dataOOH is free from ad fraud viewability and ad avoidance problems that cause discontent on the part of online advertisersAccording to Media Life Magazine there are three main reasons for OOHamp8217s continued health compared to other traditional media The first and most notable is that unlike print and broadcast OOH is not seeing advertisers flee to digital Another key to OOHamp8217s steady growth has been its ability to integrate neatly with the hottest thing in advertising mobile Finally top ad categories increased their OOH spending in the third quarter of 2015 Retail the No 2 category was up 10 percent to 164 million the biggest growth for any top10 category reports Media LifeOne of the leading investment bankers specializing in OOH Mark Boidman of the Peter J Solomon Company wrote earlier this month that amp8220the opportunities for growth in this industry are almost infiniteamp8221In Q3 2015 OOH marked a 22nd straight quarter of growth according to the Outdoor Advertising Association of America OAAABack to the FutureThe first ads were the Egyptian obelisks hence the OBIE Awards the worldamp8217s oldest advertising awards The new obelisks today OOH signs are transformed by digitization and fit perfectly in the modern age The 100 years of radio and 60 years of television commercials based on interruption seem like a brief moment of broken logic compared to several thousand years of OOHOne of the remaining issues is the ease of buying When OOH is finally made as easy to buy as TV is today whether itamp8217s with the help of programmatic or not the flow of ad dollars will accelerate and so will the growth of OOHamp8217s ad spend shareThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Why OOH Advertising Is a Potential Winner In the Battle for Eyeballs

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Nurlan Urazbaev

We Are the Outliers - By Jack Myers

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Why OOH Advertising Is a Potential Winner In the Battle for Eyeballs

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Nurlan Urazbaev

We Are the Outliers - By Jack Myers

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