Out Of Home Today is the leading source for news and information on the out of home industry.

- Advertisement -

On a Dark Desert Highway —The Digital Revolution for OOH Begins

Here are 10 Reasons for the Technology Lags in OOH

2 1,078

On the Horizon: A Digital Revolution for Out of Home (No, Really)

by Gino Sesto, Founder of DASH TWO

“Jane,” a buyer at a decent-sized agency in the Midwest, gets in touch with an outdoor vendor about buying billboard space for her client, a retailer that wants to run a time-sensitive promotion.

It takes days for someone at the vendor to get back to her. They finally connect, and she requests a picture of the board in question. She has to wait days more for a response.

When that picture arrives, it’s an image pulled from Google Maps and looks to be years old based on the time stamp. Frustrated, Jane jumps in her car to drive to the location of the desired board and see it for herself. She fights through the traffic during a busy evening commute, only to find that two of the billboard’s lighting fixtures have burnt out, making the creative on the board difficult to see in the twilight. Who knows how long that will take to fix.

All that hassle could have been avoided if the vendor had just kept up-to-date records of its billboards and checked up on them regularly.

Suffice to say, “Jane” does not end up making that buy. Alas, many of us in the outdoor industry have been the Jane in this scenario.

While outdoor advertising is thriving — it’s the only traditional media seeing ad spending growth, and many vendors and agencies have benefited from the rising interest in this format — the technology used behind the scenes has not experienced the digital revolution that so many other types of media have. Consider:

  • Digital, TV and radio have employed programmatic buying platforms for years while outdoor has just recently embraced the concept; a lot of smaller vendors haven’t even ventured into this space.
  • Many vendors (and, we admit, some agencies) continue to rely on Excel sheets for tracking purposes, eschewing more sophisticated software that would make sharing and collaborating so much easier.
  • Though the Big Three (Clear Channel, Lamar Advertising and Outfront Media) have robust websites, looking at some other vendor and #OOH specialist agencies, you’d think they hadn’t redesigned since the late ‘90s.

We’re not trying to cast stones. We believe firmly in the great power of out of home and what it does for our clients. We just want to see it get better.

So after numerous conversations in our office about the seeming disconnect between technology and the OOH space, we set out to get some answers. We talked to forecasters, media buyers, vendors and even some people who got out of the business due to frustration over the issues we’ve outlined here.

We got a lot of insight into how things got this way and when they will get better — because, everyone assured us, they will. As Mark Boidman, the highly respected managing director at to PJ SOLOMON, told us, “As technology improves and static boards convert to digital, technology is only going to help the industry, make it more relevant and easier to be bought and sold.”

Here are 10 reasons for the technology lags that we uncovered during our discussions, and some accompanying reasons to be optimistic many of them will change.

1. There’s No Driving Force to Make People Change the System

Generally speaking, things change for a reason. If you don’t need new tires, you’re not going to spend $1,500 on them when your car will pass inspection with the old tires. So it is with the out of home industry, says one industry veteran from the South.

“A lot of people have made a lot of money in the industry the way it is right now,” he says. “Why would they want to change it?”

Indeed, in 2017, ad spending was up 1.2 percent for OOH, compared to a 2.7 percent decline for TV and double-digit percentage drops for newspapers and magazines. If business keeps rolling in, there’s no catalyst to do things differently.

As an NYC ad executive who has been in the business for more than two decades put it, “Out of home advertising is in a renaissance, so you are going to get major change over time as it is needed, not just by flipping a switch and making it happen.”

2. Many Advertisers Are Local and Do Business
on a Handshake

Small vendors, who tend to lag the farthest behind in technology, receive business from agencies but also from the people they know around town. Our industry veteran in the South notes that for many of these vendors, 80 to 85 percent of business is local. It comes from the woman who does your hair at the salon or the guy who sells you a car at his dealership.

“They know where the billboard is on Main Street, and you don’t need to email them a picture or get them traffic numbers,” he says. “Why go into that investment of time and money when your audience already knows what it is and what the traffic counts are from driving past it every day?”

Of course, this puts agencies in a sticky position when they want that information for clients and the vendor isn’t used to supplying it. That can lead to deals falling through and frustration on both the client and vendor ends.

3. The Industry Is Old

Can we be blunt? There are a lot of older people on the vendor side. That’s great, because they bring a lot of experience to their jobs and have a ton of knowledge that we can all benefit from.

But sometimes when you have done things one way for a very long time, you become resistant to change. That can create tension on the media side. The entry-level people in media grew up with tablets and smartphones, points out our NYC ad exec. They throw around terms like “geo-targeting” and “data” in casual conversation.

Thus you end up with a digital gap that’s intensified by a generation gap. “Trying to appease those learning the new business but who only know the things on their phone and appeasing those who are in the know because they’re in the business already is not an easy task,” says the exec.

“The bigger companies like Lamar and Outfront are bringing in young people, but the independents, the fifth-largest company and lower, there is an age difference there,” says a woman who worked for a top-10 vendor.

As Boidman of  PJ SOLOMON notes, “Jeremy Male, the CEO of Outfront, was recently quoted as saying you still need to use a fax to buy out of home, so the systems are a little outdated. Younger people who are becoming buyers, they don’t even know how to fax. But everyone is investing in technologies and setting up new formats.” Boidman adds, “I would also note Jeremy’s firm is on the cutting edge, which is demonstrated by his firm’s recent earnings result with double-digit growth.”

4. There’s Too Much ‘Hurry Up and Wait’ on the Agency Side

We know that vendors have some legitimate gripes, too, that can lead to issues with adopting new technology.

Agencies want everything yesterday. One current vendor says the phrase “hurry up and wait” applies to every agency he’s ever worked with. They want information about a possible buy right away, and when he scrambles to get that to them within a few hours, he won’t hear back for weeks — only to be met with another “must-have” request.

“Turning things around quickly like that puts a wrench in everything else you were doing, and even if we do cartwheels and get those things out, we never hear back from anyone. It’s a lot of work for something you may not make money off of,” he says. And so the thought of investing in technology that may not pay off seems risky for vendors. Why chance it when the old way produces the same money? This will start to change when it … doesn’t.

5. Everyone Plays Follow the Leader

As Boidman notes, the Big Three vendors control two-thirds of the billboard inventory, and so they have to take the lead in developing and adapting technology. “They have been a little bit slow to adopt technology, but they are adopting in big ways and moving quickly now,” he says.

Eventually, the smaller vendors will follow. “I think the rest of the industry will move along after that. They need to know that the Big Three are actually implementing it. They will use them as a model.”

Boidman predicts that lag will be short, roughly 12 to 24 months. Wider deployment of programmatic buying will force a lot of changes in the industry, and this automated marketplace will change the playing field for both buyers and sellers.

6. Vendors Want to Develop Their Own Programmatic Programs

Boidman notes that right now, the Big Three vendors are developing their own programmatic software, which means there are different exchanges. Down the line, he envisions a universal platform emerging for programmatic, but right now the vendors are working separately and each hiring their own third-party engineers for development.

The smaller players don’t have the money for that type of investment. They will wait it out to see what emerges.

There are innovative companies making good progress in this area:

7. The Future of Billboards Is Digital

The number of digital billboards in the United States has soared, growing from 6,400 to 8,100over the past two years alone. That number will continue to expand, which means greater opportunity for income for billboard owners, who can run six to eight advertisers on a single board vs. one for static.

And as digital becomes more widely adopted, vendors will see the advantages of implementing better technology. There will be greater competition for business, which will necessitate more sophisticated approaches. “Once small vendors see the capabilities of digitalization, they will realize investing in technology becomes more economical,” predicts one local media forecaster.

8. Vendors Want to Retain Certain Advantages

Over the years, there has been discussion of developing a universal database of billboard inventory that agencies could consult to find the right fit for their clients. That certainly seems like a technological development agencies would welcome. But it looks like that will remain just talk for now.

“That’s been heavily debated at conferences,” Boidman says. “It’s a lesser priority because the Big Three don’t want to share. They see it as a competitive advantage to have their own tracking of inventory, so I think that’s quite a ways away.”

9. Some Billboard Owners Just Don’t Care

We’ve all seen the boards along the road hidden by bushes or tree branches that look like their owners forgot about them. That may as well be true.

Some signs were erected on land a farmer had no other use for and figured they might as well make passive income off a little signage. “They don’t care about the billboards, they put them up a long time ago and now they’re in disrepair,” says the local media forecaster. “It mystifies me when I see they’re so outdated, because these billboards could be tremendously profitable if they just put some profits into lighting the sign appropriately and trimming the grass.”

10. There’s a Lot of Data, But Not a Lot of Agreement on
How to Use It

These days, everyone is drowning in big data. Great, right? Well, not if agencies, vendors and advertisers don’t know how to use it to their advantage. While everyone has the tools available, they’re out of sync right now on what’s important.

“Smoke and mirrors exist with people trying to tell people what they think they want to hear,” says the NYC exec. “Technology and data help drive that — not enough people talk about good data vs. bad data.”

In time, they’ll figure it out. For now, it’s perhaps another case of hurry up and wait.

At the end of the day, everyone in out of home will benefit from the greater deployment of technology throughout the buying and selling process. It’s just a matter of finding the right way to get there. While we recognize these barriers, we think it can be done. We’ll be keeping tabs on how it goes.

 

Gino Sesto
Gino Sesto

Gino Sesto is the Founder of DASH TWO, a Digital and Outdoor Advertising Agency based out of Culver City, CA. He has extensive experience and knowledge within the advertising industry, covering all formats from traditional media to digital media. Gino has over 25 years of experience and has helped with the release of several #1 records, including Bone Thugs N Harmony, The Offspring, Eminem, Jay-Z and more. Over the last 3 years, Gino has grown DASH TWO from 5 employees to over 20 employees and has expanded the company by opening a satellite office in Nashville, TN.

 

 

 

 

- Advertisement -

- Advertisement -

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

2 Comments
  1. KS says

    While the title of this article, …”On a Dark Dessert Highway…”, is very apropos for this topic imagine the impact it would have if it read Desert versus Dessert. 😉

  2. Bill Board says

    Thank you KS. We could not decide if it were a sweet message (Dessert)or a dry one (Dessert). In the end, we settled on dry and made it ‘Desert.’
    Or it could be the proof editor feel asleep. We’re going with the former explanation. We appreciate your readership and message. Thank you. Bill