The Future of OOH 2014: A fresh look at trends and predictions for the UK
Contents
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3.
Introduction
4.
The growth of digital: 2013 vs 2011
5.
The hard facts: digital is in the ascendancy
6.
Inventory growth
7.
The retail renaissance
8.
The growth of digital in the regions
9.
Creative ambition: another key driver
10.
Breaking new ground
11.
Barriers to commercial and creative ambition
13.
Industry perspectives
15.
The digital effect: Where does all this tech-wizardry leave traditional OOH media?
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The rise of the hyper-connected consumer
18.
Smartphones: the great enabler
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The future of the phone
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Interactivity and interaction
22.
Choosing the right tech
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OOH interactive campaigns in 2013: the outsider’s view
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Flying high: OOH in transport environments
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Timing is everything
26.
Route in a nutshell
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Route: the short-term and long-term perspectives
28.
Viewpoint from our Route Master: Gideon Adey
29.
What Route means for econometrics
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The Route ahead: commercial challenges
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The commercial challenges continued
34.
About Kinetic Worldwide
The Future of OOH A fresh look at trends and predictions for the UK
Introduction It is an exciting and transformative time for the OOH sector. This year has seen revenues push on from their Olympic high in 2012 and should top £1 billion in 2013. Digital revenue as a percentage of this total is already over 22% and is set to increase quickly from here. Digital innovation is driving growth in the industry and we have seen exciting new developments in the market from both small and large industry players. Amscreen’s Partnership with Tesco in petrol stations, JCDecaux’s imminent transformation of 400 six sheets, also with Tesco and MediaCo Outdoor’s CityLive initiative are truly ushering in a new age for OOH. If we’ve learned anything from the last few years in media, those sectors with a strong digital component will grow quickest and this is where OOH is really making its presence felt. On one level, improvements to infrastructure such as the brilliant new screens from OutdoorPlus, Forrest, Ocean Outdoor, Storm and others simply make brands look beautiful, putting the brand personality and value communication front and centre, and illuminating our constructed environments. In malls, airports, roadside and rail stations, the graphic impact of OOH coupled with increasing interactivity is ensuring that posters are the prominent entry point for brands to engage with people on the move. But on another level, as digital development is being driven by consumer appetite and expectation of digital services, a more human centric, experience based view of the industry is taking shape. The implications for planning and trading are profound. Optimisable loops of ads and content - effectively channels - demand audience and outcome-based planning, not panel-based planning. And the flexibility of being able to serve multiple copy versions for flexible time periods, supported by ever more sophisticated content management systems, not only has implications for trading but for creative teams as well. Central to all of this is the connected consumer, for whom innovation is expected. As free wi-fi becomes ubiquitous, smart device uptake continues and 4G availability improves, OOH is transforming what was traditionally the end of a conversation into the growth of a relationship. Mobile and social activation of OOH campaigns at scale are now possible with the resulting data driving new levels of accountability. The ability to tap into truly digital budgets will drive growth in our sector. Collectively we have to really demonstrate and prove the value of digital OOH in a multi-screen environment and celebrate its differences and contribution to how people engage with brands. All this requires agile and adaptable approaches to leverage the new opportunities around location, context and real time communications. At Kinetic we continue to push for change in our industry as we pull forward and make real the future possibilities of OOH communications for our clients and partners. This report takes a look at these issues, together with some thoughts on how the new industry data source, Route, will influence the planning, buying and evaluation of our industry. We highlight some innovative and ground breaking campaigns for our clients like Benadryl, The Sun and Universal Pictures and look forward to what is set to be another landmark year for our industry in 2014.
Stuart Taylor CEO UK - Kinetic
The Future of OOH A fresh look at trends and predictions for the UK
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The growth of digital: 2013 vs 2011 What a difference two years makes in the world of digital OOH. In our 2011 report we talked about how the “prospect of using a poster as the access point to web content” was becoming apparent to consumers. Fast forward to early 2013 when we saw thousands of people transformed into astronauts via the magic of a digital 6 sheet and hundreds of shoppers mock-throw their mobile phones at a huge interactive billboard displaying a Buckinghamshire farm, in order to feed pigs apples – in real-time – for a donation of £1. With glee, we might add. The industry has traversed the “crossroads” we cited in 2011 regarding digital and is certain digital is its future direction. It is now at the next junction – trying to make all the elements of the digital network link up.
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The Future of OOH A fresh look at trends and predictions for the UK
Clients and consumers alike are receptive to a much greater use of digital, but the problem lies in implementation. The expense of digital screens remains the major barrier. It means that many clients are left making up patchwork roadside media strategies consisting of both digital and non-digital sites. Not only that, but the bias to London means that we are seeing over-supply on key arterial routes and locations and a lack of supply elsewhere. This means that, while the industry can offer national coverage, it cannot do this currently in the roadside environment and experts interviewed for this report agree that this situation is unlikely to change in the short term.
The hard facts: digital is in the ascendancy Despite the sometimes-prohibitive cost of digital, it is still growing fast. In Q3 2013, the Outdoor Media Centre (OMC) reported digital revenues of £53.6m, marking a jump of 3% year on year and representing 21% of the total revenue for the OOH sector. It’s worth noting, too, that these figures were achieved despite a tough comparison period due to the Olympics in 2012.
All OOH revenue 2004 - 2020 (£m)
We predict that DOOH will be 35% of all OOH spend by 2020. But, as our head of digital in the UK Carolyn Nugent says, it’s a tough market to call:
It’s a relatively small base and it’s evolving all the time. The sector’s growth has exceeded everyone’s expectations, and predictions will be as challenging as ever.”
Digital OOH revenue 2004 - 2020 (£m)
In the last two years, the industry has seen the fastest growth in transport environments such as airports and rail stations. Transport and retail are now the “real battlegrounds” according to Esprit Digital managing director, Peter Livesey.
Digital OOH as % of all OOH 2004 - 2020
The Future of OOH A fresh look at trends and predictions for the UK
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Inventory growth - standard OOH Format
No. sites 2013
2016
% change vs 2013
2020
Roadside 96s Roadside 48s Premium/Iconic Roadside/bus shelter 6s Retail Mall Retail Other (inc POS) Airport London Underground
2,265 17,270 1,450 75,000 2,500 1,273,588 2,673 118,620
2,200 17,500 1,650 73,000 1,750 1,300,000 2,500 118,400
-2.9 1.3 13.8 -2.7 -30.0 2.1 -6.5 -0.2
2,000 18,000 1,800 65,000 1,000 1,330,000 2,350 117,500
% change vs 2013 -11.7 4.2 24.1 -13.3 -60.0 4.4 -12.1 -0.9
Rail Other Transport Taxis Bus Other Environmets
12,490 2,600
12,350 3,000
-1.1 15.4
11,700 3,500
-6.3 34.6
6,500 31,000
7,000 31,000
7.7 0.0
7,500 31,000
15.4 0.0
TOTAL
1,545,956
1,570,350
1.6
1,591,350
2.9
Inventory growth - digital OOH Format
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No. sites digital 2013
2016
% change vs 2013
2020
Roadside 96s Roadside 48s Premium/Iconic Roadside/bus shelter 6s Retail Mall Retail Other (inc POS) Airport London Underground
17 33 64 102 1,530 14,866 1,068 1,408
80 60 160 2,000 2,500 16,000 1,300 1,450
370.6 18.8 150.0 1,860.8 63.4 7.6 21.7 3.0
150 250 185 10,000 3,200 18,000 1,650 2,000
% change vs 2013 782.4 657.6 189.1 9,703.9 109.2 21.1 54.5 42.0
Rail Other Transport Taxis Bus Other Environmets TOTAL
387 68
650 75
68.0 10.3
1,300 90
235.9 32.4
3,000
5,000 50 60,000 89,325
66.7
6,000 500 70,000 113,325
100.0
56,500 79,043
The Future of OOH A fresh look at trends and predictions for the UK
6.2 13.0
23.9 43.4
The retail renaissance Of the two new digital “battlegrounds”, retail is by far the more complicated area, but is also the one in which OOH and mobile working together can be the most potent and where the richest rewards can be reaped. As Livesey says: “Retail started the digital screen revolution with things like forecourt TV and supermarket TV. But the industry felt its fingers were burnt – scorched – by high profile mistakes. The negative effects lasted a decade. Now they are back, and they are back with a vengeance.” He’s right. National 6 sheets in malls, for instance, have grown from 389 to 918 panels in two years; that’s an impressive 136% increase. Livesey argues that property giant Westfield has been a driving force in the accelerated uptake of digital due to its innovative approach in the face of apathetic, slow-moving competitors. Now the retail industry has seen what Westfield has achieved with digital screens, it is finally waking up and trying to make up some lost ground. In March 2013 Trinity Leeds relaunched its retail facilities – a move it described as “marking the beginning of the next generation of shopping centres”. The mall now boasts a new website with an embedded CRM system to personalise communication to shoppers, a new network of digital screens including four giant gesture-activated video walls and free wi-fi. All these features enable the mall to flag up relevant offers, events and general information like transport updates in real-time to significantly enhance the shopper experience. In November 2013, iconic New York department store Macy’s announced it would be trialling Apple’s new Bluetooth feature iBeacon to personalise the shopping experience for its customers. Via the app Shopkick, shoppers entering Macy’s are alerted to offers and products that they might like (based on their search history). It is the first company to use this technology
in a retail setting but, undoubtedly, competitors will be following hot on their heels. In fact, the head of our innovation hub Fuel, Rebecca Bainbridge, describes iBeacon as one of the “most exciting” technologies she’s seen yet and is currently working with clients to incorporate it into DOOH campaigns. “What’s really interesting about it,” she says, “is that you can include the iBeacon sensor in an OOH site and send consumers mobile messages when they walk past, to compel them to go in store. It is also available across all mobile handsets, unlike NFC, which is not on the iPhone platform.” Retailers are recognising that increasingly their physical stores are also showrooms, with the final transaction often taking place elsewhere. Digital screens provide a perfect way to bridge the gap between research and transaction, ensuring that stores still have a role to play in this new era of web-enabled shopping. Esprit, for instance, is trialling large format digital touch screens in store from which consumers can order directly – a groundbreaking move which creates a new revenue model, not based on traditional advertising. Similarly, other retail brands are experimenting with multiscreen walls to encourage online research and reduce interaction with staff, as a way to cut overheads. The “next big thing” is large format screens for the shop window, which will mean that consumers can carry out a whole host of actions, such as registering for more information or purchasing, simply by touching or gesturing. This was launched by eBay in one of San Francisco’s busiest malls, owned by the Westfield Group, in a pilot with retailers Sony, TOMS and Rebecca Minkoff. Each retailer has digitised its window so shoppers could touch it and peruse products, even progressing to check out, as if they were on a computer at home.
The Future of OOH A fresh look at trends and predictions for the UK
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The growth of digital in the regions As we have already touched on, there is a huge bias in roadside DOOH to London. To put this in context, 45% of all digital OOH in the UK is in London and over 90% of digital roadside panels are in the capital. But clients are increasingly demanding a more balanced digital offering and this is driving growth in the regions, particularly in Birmingham, Glasgow, Manchester and Leeds.
“Clients want to buy that iconic, big, premium format outside London. There is now a much more sizeable national footprint of digital within mall and rail environments, but roadside premium sites are still very low in terms of numbers,” says Nugent. Planning restrictions are partly responsible for the low numbers. There is still no digital inventory in Newcastle, for example, where regulations are particularly stringent. The next wave of regional digitisation is expected to come on the back of Tesco’s groundbreaking point of sale (POS) network, which it is developing through JCDecaux. The supermarket is launching digital screens outside 400 stores in April 2014, which will enable advertisers to optimise their campaigns by targeting shoppers according to day of the week, as well as time of the day. Plans are afoot to integrate, not only Route data, but also Dunnhumby’s Clubcard data to optimise targeting and segmentation even further. Depending on how the screens perform, it is expected that other major supermarkets will follow suit shortly afterwards. According to JCDecaux Managing Director - Sales, Spencer Berwin, “advertiser interest has been completely overwhelming; when your telephone starts ringing with calls from clients directly, you know you’re onto something
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The Future of OOH A fresh look at trends and predictions for the UK
interesting”. The project is, he says, an opportunity for the media owner to make a “clean break” between its traditional paper products and its digital offering with the confidence that, via Tesco’s network, it has scale, a readymade advertiser base and a wealth of data. Tesco is also leading the digital charge instore, too, with its announcement in November that the supermarket has agreed a five year deal with Amscreen which will see “OptimEyes” screens rolled out across its petrol stations. These screens can identify demographics such as gender, age, date, time and volume; this data can be fed directly back to clients to make DOOH more accountable, to improve campaigns on a real-time basis and to tailor screen content to suit the dominant customer profile at any given time. Again, Dunnhumby’s sales data insight will be merged with Amscreen’s to personalise and differentiate the Tesco shopping experience.
Creative ambition: another key driver Clients, who recognise that the new opportunities in DOOH can push the creative boundaries of their branding campaigns, are also driving growth of the medium.
According to Grand Visual founder Neil Morris, “creative ambition has risen massively over the last two years across the board”.
As the market leader, we are in a privileged position to be involved in the inception, planning and delivery of many creatively innovative DOOH campaigns. Within this evolving environment our responsibility is to help our clients understand both the opportunities and constraints of the medium and demonstrate that if the creative isn’t adapted appropriately, the opportunity is lost. Static poster sites and dynamic digital screens require very different creative treatments to get the best out of them. Kinetic has a wealth of experience to assist clients in adapting their campaigns to ensure maximum impact and return on investment.
Initially, DOOH was basically a digital version of traditional OOH. Now, it can be increasingly integrated with other parts of the media mix and driven by insights from data. By using DOOH intelligently in this way we can grow the entire market, rather than cannibalise it. We asked Morris for his top groundbreaking campaigns.
The cream of the creative crop Benadryl Pollen Alerts: To alert hay fever sufferers when pollen counts were high, Benadryl launched a dynamic, reactive, location-specific DOOH campaign in summer 2013 that tapped into Met Office pollen readings. The campaign promoted Benadryl’s Social Pollen Count App by behaving in a similar way – delivering real-time, relevant information whatever your location. Lynx Apollo: This phased DOOH campaign culminated in interactive 6 sheets and a 12-metre tall, two tonne interactive astronaut model with a digital screen in its helmet at Westfield London. Geo-targeted texts invited shoppers to submit their image and see their face displayed in the visor of the giant astronaut. The interactive digital 6 sheets delivered over 30,000 interactions and generated 5,500 photo submissions. Universal Pictures – Mischievous Minions: This was the first ever mobile controlled, personalised, geo-specific DOOH campaign to span five European territories. The creative invited consumers to control on-screen characters by texting a command to see them dance, wrestle, play, or boogie to promote film Despicable Me 2. Range Rover Sport – Hear the Engine: This was a special-build DOOH campaign and invited passersby to “Push the pedal, hear the engine”. During the first two weeks the campaign delivered over 27,000 interactions and averaged two interactions every minute across the network. Cadbury Mini Rolls – Freeze Me: An interactive and socially enabled DOOH campaign to promote its new ice cream flavours. Participants used the touch-screen to take their picture and then see their image ‘freeze’ before then being displayed on huge M-Vision screens throughout the mall. In three weeks, 13,000 interactions took place. More than 1,600 photos were taken and of these 79% of people opted for frozen fame by choosing to submit their frozen image to large format M-Vision screens in shopping malls across the UK. The Sun Newspaper: Called “Second Sight”, this campaign served up daily headlines to commuters during rush hour, delivering breaking news on 2,800 screens and reaching 3.2 million people per day. The Future of OOH A fresh look at trends and predictions for the UK
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Breaking new ground Many of the groundbreaking campaigns that are driving the growth of DOOH share a handful of key trends and technologies. Instant Updates Technology, such as Grand Visual’s “Open Loop”, is enabling campaigns to be truly tactical by making it time and cost effective to update copy across multiple formats at the touch of a button. This allows DOOH to keep up with the increasingly responsive nature of media and be part of the social media conversation. “The days of running the same copy for two weeks are over,” says Morris. Personalisation/Gamification It’s a marketing truism that humans love to play. And digital is allowing them to play more, with the gamification industry predicted to be worth $2.8bn by 2015 and $5.5bn by 2018*. By including gamification elements in DOOH, marketers can make campaigns much more engaging and interactive. “Arguably, OOH is the media channel best placed to take advantage,” says Kinetic’s Head of Fuel, Rebecca Bainbridge. Sharing the Love Modern marketing is increasingly about getting consumers sharing in a positive way and OOH is the perfect catalyst; people are rarely without their phone when in proximity to outdoor advertising. Technology which enables people to do this is revolutionising DOOH and giving rise to pioneering campaigns like the BBC’s November campaign to celebrate the 50th anniversary of its cult TV show Dr Who: passengers at rail stations across the UK were treated to images of the Tardis appearing on screens, as if by magic, and implored to “show your support for the doctor”. They could then post their messages, pictures and videos for display on this Tardis using hashtag #savetheday.
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The Future of OOH A fresh look at trends and predictions for the UK
Personal wi-fi (PiFi) is another new weapon in the advertiser’s armoury. To support the release of the latest One Direction album, fans in London were able to access exclusive mobile content via 10 roadside 6 sheets. Through these ‘Fan Spots’, the public were able to listen to new tracks, download photos and lyrics and create personalised content. They could also enter a competition to leave a personalised message for band members for a chance to win a Christmas tweet in return. Each poster also featured a site-specific call to action directing fans to the closest HMV store to purchase the album. *Source: Gamification by Application and Deployment 2013-2018, MarketsandMarket, June 2013
Barriers to commercial and creative ambition Insufficient connectivity and bandwidth of some sites can hold creative and commercial ambition back. Industry commentators interviewed for this report agree that, going forward, if OOH wants to be at the heart of branding campaigns then we need to ensure we have a state of the art network infrastructure. There is huge opportunity for the industry to go after digital media budgets by ensuring clients do not see DOOH as a substitute for OOH but as a complementary medium with different capabilities. Interviewees were divided on whether media owners are innovating quickly enough.
all directions, to “innovate or die” and they – rightly – need to take time to consider their choices wisely and make the right ones. Unsurprisingly, viewpoints can be polarised. As the intention of this report is to provide a rounded viewpoint and start a constructive debate, this section starts with a viewpoint from Colin Bundock, then gives other stakeholders, particularly media owners, a chance to comment too.
Some felt more strongly about this than others, like Kinetic’s Trading Director, Colin Bundock. He believes media owners could and should be doing much more. But there is a huge amount of pressure on media owners, from
Viewpoint: Colin Bundock, Trading Director, Kinetic
“TV is traded by the minute, as is radio. We’ve got to get much smarter about how we trade. If we want more of clients’ branding campaign budgets, then we need them to be able to use digital in a much more bespoke, creative and tactical way.”
“If I were a fast food client, for instance, I would want to use digital to promote breakfast in the morning, coffee at 11am, sandwiches at lunch and doughnuts in the afternoon. That’s just not happening enough. For a start there’s not the digital coverage. And there are few truly groundbreaking innovative client campaigns around which fully exploit DOOH’s ability to be reactive to the market. I would say that The Sun’s ‘Second Sight’ campaign is one shining example.
continued
The Future of OOH A fresh look at trends and predictions for the UK
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“Media owners talk about flexibility, but their business model is built on selling sites for two weeks and that’s how they still make most of their money. However, if they don’t change and invest in their inventory, we won’t grow the market by getting more brand count, as only when DOOH reaches critical mass will we be able to attract new advertisers to OOH. Both OOH agencies and contractors have to work together to understand how we can plan and buy DOOH in a more dynamic way. I don’t see any advantage in everyone developing their own systems when we clearly need to decide as an industry how we want to trade DOOH. This could be in a number of ways, CPT, audience, or through dedicated trading desks. At this stage in the development of OOH we’re not advocating a move to TV type or programmatic trading.
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The Future of OOH A fresh look at trends and predictions for the UK
The lack of national dynamic campaigns is largely down to the lack of inventory currently available. It’s still only possible to buy national digital campaigns on rail and mall formats, the development here has only been based around major rail terminals or the bigger retail locations. A lot of our advertisers want a national footprint on DOOH for it to really work for them. We might see this happen next year when JCDecaux launch their new Tesco digital offering. However this will only be aimed at advertisers who want to be involved with a point of sale audience.”
Industry perspectives Jason Cotterrell Managing Director, Exterion Media “The media owner has to set their agenda and has to develop their own estate in line with their own business need. It’s very easy for people to say we should be moving in a certain direction to a business model that better suits their needs than the media owner’s. It’s a question of balance. Digital is a fast growing part of our business. But it’s not the main part of our business. We’ve got to start pulling together and demonstrating the effectiveness of all our assets in conjunction and understanding properly all of the audiences that all of our assets reach.” Shaun Gregory Managing Director, Global Advertising, Telefónica Digital “The UK is very slow to innovate. There are many reasons why, including existing trading mechanisms within the advertising industry; there are also a lot of people with a lot to lose from changing and who are quite frightened about making these shifts. However, we are now living in a world in which we can measure most things and we’re heading for a day when we will be able to measure everything. People in the OOH industry are either going to be seduced into joining that world, or they’ll be dragged into it kicking and screaming. My honest opinion is that I think it’s going to be the latter.”
Naren Patel CEO, Primesight “Digital has been the fastest growing sector of the outdoor market and currently accounts for 20% of all outdoor spend. Unless you have digital assets, you cannot participate in this sector of the market. As a media owner the choice to invest is your own. However, if you want to grow, you need digital assets. Yes, we need to become more efficient in transacting outdoor. But I disagree with the view that media owners are generally slow to change and keep up with the rest of the marketing world; the increase in revenue on digital OOH and the investments being made by media owners would suggest otherwise.”
Spencer Berwin Managing Director - Sales, JCDecaux “Innovation is absolutely happening in this medium. It’s a medium with many moving parts, several of them new – and of course digital – and all of them incredibly exciting. We’ve got to take our clients with us on this journey of change. Additionally, in our rush to innovate and change, we must remember that a great billboard with a great ad is still incredibly powerful. It is as relevant in today’s increasingly digital age as it’s always been. We have to remember our core values and the medium’s ability to reach massive audiences across the UK. After all we are a mass market, broadcast, in-your-face, can’t-switch-itoff, can’t-fast-forward-it medium. Those are some of our greatest strengths. At the same time, we have a lot of digital innovation and have our foot firmly to the floor in terms of delivery. We are committed to making 2014 a transformational year for our company and in so doing, for the medium as a whole.” Errol Baran Managing Director, Storm Digital
“Being too slow to innovate is always something that is levelled at media owners. But, if your business has predominantly been built on an older, more traditional model it’s very hard to change overnight and I do have some compassion for them. That said, the market is not only crying out for change in terms of delivery and proposition, but it’s also crying out for commercial flexibility; the ability to change your copy at will and to buy assets against time according to what is important for a brand. I believe our model at Storm is going to make everyone look at their businesses. They’re going to recognise that in order to stay fit for purpose and futurefacing, the concept of flexibility is going to have to play a part in their businesses.”
The Future of OOH A fresh look at trends and predictions for the UK
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James Harrison Sales Director, Signature Outdoor “Yes, there is a lot of pressure on us to keep up with the changes. In the past 12 months we have spent £2 million on digital development and we have a commitment of the same amount over the next two-year period. For a small media owner, this is a huge investment that equates to our entire billings of 2012. We’re offering flexibility, giving complete access to our plant, developing a traffic flow audience model and working with a specialist in traffic data. We feel really positive. The market seems to be moving into a better trading environment with people appreciating sites and our recent developments.” Grant Branfoot Sales Director, Outdoor Plus
“Offering client agility is absolutely key. We are completely flexible with our estate and feel that a sensible pricing model helps a client work in a very bespoke fashion. We have been known to turn around tactical campaigns within 15 minutes. We feel very positive about the future. The fact that outdoor can’t be switched off by the consumer, and that more people are spending greater time out of their home, means that the industry has a very solid platform to continue its growth from. Also, with greater digital technology and the ability to engage with mobile, the chance to talk to the consumer is more exciting and relevant.”
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The Future of OOH A fresh look at trends and predictions for the UK
Gill Reid Board Director, OOH, Mediacom “How proactive have media owners been on the innovation front? In terms of hardware in the ground, they’ve been very proactive. But that’s where the thought process has ended; in converting sites to digital. But we need more thought leadership. What we’re not doing is incrementally increasing revenue. We’re simply recycling client money; money coming into the market is just being transferred onto these digital formats. The market needs to find another way of referring to digital, so it’s seen as a separate side of OOH. That way, we can get new clients in, doing different things. At the moment digital is not fulfilling its potential and we’re not making the most of client interest.”
The digital effect: Where does all this tech-wizardry leave traditional OOH media? Experts, such as our own UK head of digital Carolyn Nugent, agree that, unless a maverick technology provider enters the market offering digital screens at vastly reduced prices, we are not going to see digital suddenly overtake traditional formats in terms of popularity or revenue generation. But that doesn’t mean that digital isn’t having a dramatic effect on the way things have always been done.
digital then you’re immediately going to increase your revenue. Actually, what that approach will do is lead to a cannibalisation and commoditisation of the digital market much, much faster than is necessary. Instead, I would hope that, over time, rather than cannibalising our existing market, we’d actually pull more cash away from other traditional media.”
Clearly, one of the major industry concerns is that digital will cannibalise the existing traditional market. Some argue it already is – significantly. In some quarters, there is growing concern that the mere mention of the word “digital” is blinding people, driving them into hasty, illadvised decisions that are ultimately detrimental to the entire sector.
Cox’s solution is to invest in the site’s structure so that it has ‘wow factor’ and drives higher revenues. In his view, if you can come up with a dazzling, innovative structure – as he says the industry is increasingly doing – then you can argue it’s a different site altogether.
However, at Kinetic, we believe that not all sites are suited to digital. As Jeremy O’Brien outlined in The Emergence of Digital Out-of-Home Media, a recent report from Kinetic’s global think tank Kinetic Futures:
Bundock agrees. He believes that there are some “fantastic and stunning static locations which marketers have forgotten about because they are chasing the digital dream. Traditional media is being overlooked sometimes because the industry is getting carried away with digital for digital’s sake. We’d like people to think more about having a combination. We want to reignite the static poster fire whilst also establishing a proper value for digital OOH.”
“Conventional formats persist along many roadways, where static media are deemed effective in capturing the available attention of passing audiences at a lower total operating cost than largeformat digital displays.” Damian Cox, CEO of Wildstone, told us that the industry needs to think much more carefully about the digitisation of sites, saying: “There are some fantastic digital sites out there but, equally, there are some sites that I wouldn’t have turned digital. I would have asked: what’s the point? There’s a feeling among some in the industry that if a site goes
The Future of OOH A fresh look at trends and predictions for the UK
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Digital is also changing our perceptions of the standard 2-week in-charge period in the traditional market. As clients get used (and addicted) to the ability to be highly responsive in DOOH, they are demanding more flexibility of their traditional sites too – in 2013 overall there has been a 30% increase in the number of sites booking flexible in-charge periods. However, many believe that there will continue to be a strong role for the static site to carry the general message for the duration of a branding campaign, while the digital sites personalise it. The thinking is that the traditional and digital media are simply different “layers” of the same cake. Grand Visual’s Morris subscribes to this view:
“A big branding element on a static billboard can sit quite easily next to a personalised version of that campaign on an appropriate media. Not everything has to be digitised and personalised. We still need different layers.”
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The Future of OOH A fresh look at trends and predictions for the UK
The rise of the hyper-connected consumer Human beings have always craved connection. What’s new in 2013 is that smartphones enable us to supercharge this connection by accessing the internet on the move. They connect us to so much valuable content that they have become like an extension of our own bodies. Many feel limbless without them, as they are gateways to completing everyday tasks, from navigating a new environment to talking to friends to emailing colleagues. There is now even a word to convey the intense anxiety a consumer feels when out of mobile phone contact: nomophobia. In the last two and a half years, since we wrote the first report in this series, the pace of technological change and subsequent effect on consumer behaviour has been staggering. It has far outstripped predictions. As James Chandler, Head of Mobile, Mindshare UK, says:
“Two and a half years ago we were all guilty of being extremely naïve about the rate of change we were going to see. We all now have a computer in our pocket; a device that is more powerful than the best super-computer that existed in the world ten years ago. That’s happened really quickly. This seismic shift means that we can look at the internet – for real – on our phones. We aren’t confined to being at a fixed point. That has changed our behaviour unrecognisably.” So, what are the implications of this new consumer behaviour for OOH media? Simply put, they are huge.
As Roshan Singh, our Director of Digital Innovation puts it “The mobile consumer is a tricky consumer, while they are always on and can be marketed to on the go – they are also empowered. Highly empowered. OOH is uniquely poised to take advantage of the mobile consumer and turn what has traditionally been the end of a conversation into the start of an experience- a wholly integrated and multi-layered communication strategy. By tying OOH and Mobile activation together we are able to turn a one-to-many medium into a one-to-one communication, which leads to deeper connections and the ability to collect and analyse data allowing us not only to improve the planning process through quantification, but also allow us to deliver deep insights to our clients about their customers. Having an empowered consumer however means that we must change our mindset – it becomes less and less about broadcasting a brand message and instead we must focus on delivering incredible user experiences. Every part of the process must be well thought out and with the user not just in mind but at the very centre.”
Dan Rosen, Global CEO of mobile marketing services company Joule, sums up the implications by saying: “Smartphones can help turn traditional OOH into an interactive medium and mobile media can amplify and extend the impact of OOH media buying. We think 2014 is going to be a massive year for mobile and OOH, both from an interactive and a media standpoint.” But, before we can hope to achieve Rosen’s ideal, we need to have a comprehensive understanding of how and why consumers are using their smartphones. Then, we can create content and technology strategies for modern mobile-enhanced OOH campaigns that engage consumers on a much deeper level than ever before.
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Smartphones: the great enabler A few years ago there were question marks around whether consumers would want to reveal personal information. Today we witness a growing desire to share details such as where they are, what they are doing and how they are feeling. As well as this, consumers are happy to rate their experiences, on networks like TripAdvisor, as a matter of course. Our Kinetic UK Panel research, which has its finger constantly on the pulse of the consumer, suggests this appetite is only going to get bigger. Key stats from Kinetic UK Panel
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61% of consumers use free wi-fi services
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20% of those living in London and the South East have used the free wi-fi at London tube stations
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80% of those who upload content to social networking sites have uploaded OOH generated content
Growing ranks of consumers are receptive to being entertained by OOH media, particularly when killing ‘dead time’. Our bus shelter Christmas campaign for Unilever’s Marmite brand was a perfect example of gauging the consumer mindset and coming up with compelling content to fill their dwell time: those queing clamoured to take photos of themselves that were then uploaded to a screen on London’s Oxford Street.
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The Future of OOH A fresh look at trends and predictions for the UK
Getting smart with the stats Smartphone ownership has soared to its tipping point, with experts predicting that mobile will be the most common way of accessing the internet by 2014. According to Google’s Think Insights, UK consumers connect using on average three devices, which is more than the global average. Moreover they are spending unprecedented amounts of time on their smartphones. Smartphone usage is even more pronounced in younger age groups. Kinetic Panel research reflects that over half of smartphone owners have downloaded an app whilst out of the home, with over two thirds of these consumers aged between 25 and 34. It also shows that while older demographics still tend to prefer their PC when networking online, younger audiences predominantly access social media using their smartphones.
The future of the phone The next major phase of the phone’s development as a powerful enabling force is mass-adoption of technology that enables consumers to download more data, at faster speeds and with more ease. This could be wi-fi, or 4G or even 5G, which some technophiles are beginning to talk about. In fact, at Kinetic we’re currently investigating whether the UK is going to become a primarily 4G enabled or wi-fi powered society. A 4G future would mean much more data accessible, more quickly, enabling consumers to easily do data-hungry tasks, like watching movies on their commute home. To put 4G in context, a typical UK user would enjoy download speeds six times faster than they are currently getting on existing 3G networks.
them to do things they wouldn’t normally do. People will start digesting OOH media in a very different way.” Currently, most people use their smartphone for simple tasks, like going online or downloading pictures. More complex functions like streaming video content, for instance, are only accessed by a relatively small proportion. “But these behaviours are becoming more mainstream, especially among younger audiences. This type of behaviour is the future,” adds Rowland.
A wi-fi future, being free, would mean that consumers would potentially be much more promiscuous about the content they access, but wouldn’t have as good an experience in terms of quality. Experts like Rosen predict that wi-fi will truly take off and start having a mainstream impact on the OOH channel when “the wi-fi signal can be seamlessly or passively activated by a user in a physical environment”. He estimates that this will happen over the next three years. Mobile networks are starting to enter the 4G fray now and will continue to do so apace. EE was the first into the UK, in October 2012, followed by Vodafone and 02 in 2013. Vodafone’s communications and advertising manager Bruce Rowland says that 4G is having a significant effect on consumer behaviour already:
“It’s allowing people to use their phone on the go as they would do their computer at home which, all of a sudden, gives them a completely different level of usage on their handsets and allows
The Future of OOH A fresh look at trends and predictions for the UK
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Interactivity and interaction Experts have been saying for a while that OOH will come into its own when mobiles and posters/screens start interacting with each other as a given. They envision a world in which OOH media closes the loop from call-toaction to m-commerce, from prompt to sale. At the moment this interaction is still a novelty, but we are edging closer and closer to a point where actions that woudn’t have looked out of a place in a futuristic sci-fi novel a few years ago, like a bus shelter recognising an onlooker’s gender or gesture, are now really happening in a street near you today. However, we need to ensure we tread carefully. As we reach what could be an inflection point for the OOH industry, there are a few major hurdles we need to overcome or we risk severely limiting the possibilities available to us as an industry. We need to take on-board learnings from research around consumer attitudes, as well as from past experience when marketers have jumped headfirst onto a technology bandwagon. User experience is so fundamental to success in this arena that companies like Joule employ ‘user experience architects’ on a full time basis to ensure the customer journey is seamless. The other topic mobile OOH experts spend much time considering is the ‘value exchange’ to ensure the consumer is getting as much from the interaction as the brand is. As Rosen says:
“Value exchange is absolutely key. Success comes down to consumer desire to interact with a brand. What we say to our clients is ‘what’s in it for the consumer?’ because the first thing the consumer is thinking when they see a message from a brand is ‘So what? Who cares?’ If you’re not either entertaining or useful, interaction is just not going to happen. If you’re just talking ‘at’ the consumer [without truly engaging them in what you’re saying], it’s going to fall flat.” Consumers are bombarded by so many commercial messages on a daily basis that they have become adept
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at zoning most of them out. Consequently, the biggest challenge facing marketers today is how to layer meaning into campaigns. The good news for OOH marketers is that research is showing a strong receptivity from consumers regarding interactivity and emerging evidence that interactivity can build deeper connections with them. Here are a few snapshots from our UK Panel:
21% expect to be able to interact with advertising in the future wherever they see it Over half are more likely to react to digital ads communicating offers close by 40% agree that interacting with digital posters is a great way to pass the time whilst travelling
Interactivity and interaction As an industry we are still on a huge learning curve. And, as head of our innovation hub Fuel Rebecca Bainbridge says, we’ve still got a “long way” to go in perfecting our collective interactive offering for clients. She believes one of the biggest challenges going forward is how to amplify interactive campaigns, so they are not solely focused around one, lone site with limited reach.
But regardless of the inevitable challenges, Shaun Gregory, Managing Director, Global Advertising, Telefónica Digital, predicts that the interactive aspect of marketing campaigns will be the “fastest growing advertising trend of the next ten years”. However, he urges marketers to think about interactivity, not just in terms of deeper engagement levels, but also in terms of the data that they provide too: “Interactive campaigns do a lot more than interactivity. They give media buyers the opportunity to track behaviour in real time as well. With this comes a real opportunity to change and evolve the way that objectives are measured, which is really exciting.”
“At the moment running interactive campaigns on more than one site is cost prohibitive,” she says. “The challenge, always, with new innovations and technology is how we make them scalable in campaigns so they reach a broader audience. We need to look at smart mobile solutions that can deliver this; Apple’s iBeacon could be a good opportunity because it gives us scale at less expense than other technologies.”
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Choosing the right tech Technology has liberated lifestyles but has also made distinguishing which mindset a consumer is in at any point in their journey more challenging. Consequently, advertisers must have a deep understanding of what consumers are likely to be doing, thinking and feeling when trying to connect with them in a particular place outside their homes, so they can send them a message which will resonate. And this message does not necessarily need to be sent via the latest, most cutting-edge technology. As many interviewees for this report have said, it can be easy to be blinded by technology, like Near Field Communication (NFC), but often the simple option, which consumers are comfortable with, is the best – like SMS text messaging. That said, as 4G takes hold, superior technology is likely to start being used more by consumers, especially amongst digital natives and especially if the benefits are clear. NFC, for instance, is creating buzz at the moment because of its potential as a gateway to contactless transactions. However, experts consulted in this report estimate that NFC won’t see real cut-through for at least 6-12 months. And, as Rebecca Bainbridge, attests: “There is a huge consumer education piece that still needs to be done around NFC and mobile payments.” Nevertheless, our Kinetic Panel in the UK shows a growing awareness - currently at 27% amongst smartphone owners and for those living in London this figure rises to 43%. And, according to industry predictions, 1.5bn devices in Europe will be NFC enabled by 2017. When this happens and a critical mass of consumers have the technology in their hands, we are likely to see another seismic shift in consumer behaviour with ‘payment by poster’ becoming run of the mill, rather than something done only by übersavvy techies.
But no matter which technology is deployed, Rosh Singh points out that it is vital to always think of the user experience. “The mobile and digital landscape is one
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in which innovations come at pace, however with the user front and centre we must remember that creating innovative campaigns doesn’t mean throwing technology at the problem. NFC is a great example of this – while the technology itself is outstandingly good, it requires the user to actively think about the technology. Delivering excellent customer and user experiences means never putting the burden of the technology upon the user. We want them to effortlessly access the experience we have crafted for them. Look to 2014 to be the year of Bluetooth Low Energy (otherwise known as iBeacon) and connected objects (the interaction between digital and physical facilitated through mobile).”
OOH interactive campaigns in 2013: the outsider’s view
The major threat to progress generally remains a silo mentality throughout the industry. Last year’s report betrayed a worry that mobile would overtake OOH and this mindset of working ‘against’ rather than ‘with’ other disciplines, such as mobile and social media, still prevails and must shift if interactive OOH is to fulfil its potential. Here at Kinetic we are committed to changing minds, which is why we are working alongside social and mobile specialist Gamaroff Media. Here’s CEO Mike Gamaroff’s outsider-view of our industry:
Q. Where do you see OOH fitting into the new world of interactive marketing? A. It was actually a surprise to me to discover that OOH was an opportunity to combine the things that we were learning in mobile and social to come out with something better than there ever was before. Mobile is an opportunity for OOH to augment itself and go beyond just something that people look at and towards something that people interact with.
Q. How well is the OOH industry ‘getting’ the changes happening, particularly in social and mobile? A. OOH is the oldest form of media. And, with older industries, it can be harder and slower to change. I would say it’s one of the slower innovating industries. It seems that the industry is looking at what’s happening and thinking that mobile is already ‘owned’ by the digital guys and that social is ‘owned’ by the social guys.
Q. What do you see as the main barriers to the OOH industry exploiting these opportunities? A. Perceptions. The industry has, for the most part, sat outside of all the changes happening in digital, in the shadows.
Q. Why is changing perceptions taking so long? A. Because the industry is very traditional, is used to doing things in a certain way and so is only just waking up to all this.
Q. What’s the future for interactive OOH? A. Brands are going to see their OOH agency taking a lot more ownership of other channels so they can activate digital campaigns in the best way possible. OOH could be the glue at the centre of a campaign. The only reason that it isn’t – yet – is because the industry has not shifted its thinking enough and broken out of traditional ways of doing things. But it could ‘own’ social and mobile if it wanted to. It is well within OOH’s reach to create a good proposition across all media. It’s just not being done right. Yet.
Q. What would you do, then, if you were CEO of an OOH company? A. I wouldn’t see mobile, social and digital as someone else’s territory and see them as my channel. Mobile is not an ‘add on’ to an OOH campaign. It could be the backbone. It’s time to start viewing OOH as more than just outdoor ads but as a means to effectively measure and drive a business objective, such as driving sales, to close the loop.
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Flying high: OOH in transport environments Perhaps the ripest, most lucrative places to explore these mobile possibilities are transport environments. Trends are converging to create the perfect climate to engage consumers in OOH activity.
As Spencer Berwin, Managing Director - Sales, JCDecaux, says: “If any industry commentators think that innovation in OOH is not happening fast enough, sorry for being blunt, but we have to get you out more! Let’s go to Heathrow Terminal 5, (or T2, when it opens in June 2014) and have a good look around. Or head to Waterloo Station in February when we switch on Europe’s biggest indoor screen – our giant 40 metre digital channel – Waterloo Motion – with a weekly audience of over 2 million.” And there are plenty of reasons for this. For instance, more people are travelling more miles more often, with frequency and size of journeys predicted to increase. Typically, frequent travellers tend to be younger more affluent and tech-savvy. They are very active on social media, downloading content and posting frequent status updates. These trends have a knock-on effect on retail environments in travel spaces: they are constantly
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The Future of OOH A fresh look at trends and predictions for the UK
innovating and improving, going far beyond traditional ‘shopping malls’ to multichannel entertainment spots. Many now incorporate fine-dining, sensory experiences like beauty treatments, museums, cinemas, gardens and galleries. In turn, this means non-travellers, as well as passengers, are encouraged to dwell for longer in these environments and are likely to be in a more relaxed state of mind. And even those that don’t stay longer have richer, more positive experiences, which reflects positively on brands in the space. All these factors bode well for OOH interaction, as our research is bearing out. For example, our Panel shows that over half of consumers believe that digital poster screens make public transport environments more interesting and attractive and 40% of them agree that interacting with digital posters is a great way to pass the time whilst travelling. Consumers are clearly telling us that they want to be productive and entertained while travelling and, being the predominant media channel in transport environments, OOH is uniquely placed to respond to these demands. Hence the steep growth in train station digital 6 sheets seeing a 78% jump in the number of sites since 2011.
Timing is everything Today’s consumers expect to get relevant content whenever and wherever they want and are more reliant on their mobile phone than ever before. These factors make travel spaces the perfect environments for marketers to experiment with contextual advertising messages, as well as campaigns that improve the travel experience. Here are a few standout campaigns that have skillfully taken advantage of these travel trends: Heineken ran a DOOH campaign during the London 2012 Olympic Games at major rail stations and the London Underground. Digital sites kept travellers informed with dynamic copy changes showing the day’s events, real-time results and news headlines. During Wimbledon fortnight, IBM kept Heathrow Terminal 5 passengers informed of the latest tennis scores. Updates were tailored to the upcoming flight schedule and at departure gate locations, by referring to players from countries relevant to travellers in those locations in the airport. Sony opened a mini-cinema fully equipped with high definition screens and PlayStation3 consoles at Charles de Gaulle airport, Paris. Passengers interacted with Sony products while waiting for their flights. Samsung employed a similar tactic by opening SoundCorner, where travellers could listen to music provided by Universal Music, while browsing on a Samsung Galaxy tablet. Amex built awareness of new services through a Cirque du Soleil style performance at Schiphol Airport, where three acrobats represented each of Amex’s Flying Blue cards targeted at frequent flyers. Accompanying media included promotion stands, banners, digital panels and giant lightboxes.
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Route in a nutshell If, as WPP chief Sir Martin Sorrell says, data is the “new oil” and successful brands need to understand, refine and manipulate this precious resource, then Route is the new site discovery and our proprietary tools are the datamining machinery. In a nutshell, Route creates a single and unified source of audience measurement across all major OOH environments, enabling highly sophisticated media planning combined with an ability to drill down to an unprecedented level of detail to get better returns.
The topline – Route:
encompasses not just roadside data as with Postar, but also data on media in transport environments like the London Underground, train stations and bus shelters
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replaces Postar
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launched in February 2013
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is the result of a £19m industry investment
A bit of frivolity - some fun Route facts:
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tracked 28,000 people every second of the day for 9 days and linked them to a comprehensive Traffic Intensity Model
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the average adult sees 169 posters a week Londoners see twice that
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we see 30% more posters on a Monday than any other day of the week
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men see 10% more posters than women
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single people see 28% more posters than married people
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people in Coventry move faster than any other major city
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Mancunians move more slowly than in any other conurbation
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people in Swansea see proportionately more posters on a Saturday night than any other conurbation
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holds 170m data records and 19bn GPS records
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maps all GPS inventory allowing a deep understanding of audiences in terms of demographics, lifestyle and attitudes
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does not rely on claimed exposure but is based on captured behaviour and, as such, is comparable to Barb ratings or internet clicks
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takes account of a myriad of different factors including: whether the passer-by is on foot or in a vehicle; whether they are driving the vehicle or are a passenger; whether the vehicle is a bus or a car; the vehicle’s likely speed; the direction of travel; the angle to the road, etc
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allows us to identify and track audience levels by behaviours and consumption over time, but also by the specific location of individual sites
The Future of OOH A fresh look at trends and predictions for the UK
Route: the short-term and long-term perspectives Kinetic and advertisers alike are on a never-ending quest for more evidence and insight. If clients are going to spend money on media, they want to know how it amplifies the entire marketing mix. The more we can provide this, the more brands will trust OOH as a productive place for their budgets. Up until now, OOH’s measurement approach has not been robust enough. Route changes all that and heralds a new era of client confidence, not to mention creative thinking. In the previous section on interaction, we discussed the opportunity for a poster to become the glue holding together mobile-enabled poster campaigns. Route puts OOH in pole position to land this role because it provides a measurable understanding of how out of home placement works across multiple formats and environments. The data allows us to embrace a new language around how we define communications planning, making OOH one of the most dynamic and connected areas of media. With fast-changing consumer behaviour, and receptivity to interaction, Route could not come at a more opportune moment: the granular and cross-environment measurement ability, combined with the advances in mobile and social technology, ensure that OOH can fulfil its potential. As Route uses captured not claimed data, it allows the industry to overtake other channels in terms of the effectiveness of media measurement. Further, interactive OOH presents the opportunity to close the measurement loop completely between a client’s objective and the final outcome; from action to transaction.
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Viewpoint from our Route Master: Gideon Adey
“Route is massive, granular and, frankly, quite beautiful.” “It is a huge data set, which gives us an amazing anthropological insight. It provides unprecedented information about how people move around Great Britain: where they go, what they see, what they rest their eyes on. It’s not just about what they pass; it’s about what they actually see. In developing Route, we have become the only medium that delivers net impact [unlike ‘gross impact’ which is only an ‘opportunity to see’, net impact is actual eyes on contact, measured through technology like eye-tracking equipment].” “But this rich data is only of any value if you can turn it into practical information, so that it has a positive effect on the way you place media for clients. As an underwriter of Route, we have access to the raw data. But huge, massive, fantastic data like Route needs ‘kit’ to show us the ‘shapes’ in the numbers. At Kinetic, we are way ahead of everyone else on this front. We weren’t happy with the software available on the market, so we built our own. Our suppliers, and even our competitors, use our tools. We’ve become a software house by accident and now, increasingly, by design. “Because we’ve invested significantly in developing bespoke tools to mine Route, we’re leading the field in conceptual planning; how we can use the data to change the way we buy posters and make outdoor, as a media channel, more valuable.
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“Route moves us away from homogeneous demographic targeting to cutting through into someone’s mindset and behaviour. It’s not about what a generic ‘ABC1 adult’ sees, it’s a real reflection of what an ABC1 adult experiences from Bedford or Birmingham to Bradford or Bermondsey. We’re breaking the world up into groups of people that have the same out of home experience, and buying a share of that. “Every single OOH location has its own complexion in terms of how it delivers people by day, by day-part, by week or month. Through the beauty of Route, we can now see the different complexions clearly across all 365,000 sites that we currently hold in the data set. No one else can see that. “We can make clients’ money go further. The clients who we’ve sat down with and talked to about Route have a common reaction: ‘That’s amazing. Let’s do it.’ “We are working with clients to fuse disparate sources of data to uncover deeper audience behavioural insights - if clients tell us who their customers are at a granular level, we can deliver more effective OOH campaigns than the market has ever seen before. Watch this (out of home) space.”
What Route means for econometrics But don’t just take it from us. Many other industry stakeholders are excited at the prospect of Route and what it means for the future. For instance, the data is galvanising economists, such as econometrist Sam Fellows, partner at Ohal Group.
But with OOH I haven’t had these type of conversations, because I haven’t had the data. It’s exciting that this data is now coming online and we will be able to generate more insight. Jennie Sallows, Head of Insight at Kinetic is working with a number of Econometric partners to maximise the potential of Route, now and in the future.
Q&A: Sam Fellows, partner at Ohal Group Q. There’s a feeling in some quarters of the OOH industry that econometric modelling undercuts OOH significantly. Why is that and what can we do about it? A. Personally, I don’t agree that econometrics as a technique undercuts OOH. We give every channel the same chance. The problem in OOH has been that data has not been good enough, which has made our job of correlating activity back to KPIs much harder. Traditionally, the data used in OOH models has not been as good at representing audience exposure as it has in TV, radio or print. In particular, it has been weak regarding the way consumers are actually exposed to the media. So, potentially, this has put OOH at a disadvantage.
Q. How does Route change this? A. Route addresses many of these issues. We know, for example, that some panels are more visible than others but, thanks to the beauty of Route, we can get data broken down by panel type. It’s a massive opportunity for the industry. Route really pushes the boundaries. Out of all the broadcast channels, it is now doing more than most.
“Route has already given us the ability to better understand how short term advertising works. We have adapted it from a ROI measure into a strategic planning tool. We use Route to understand which audiences are interacting with which panels, during which day-parts. We are also exploring how to BETA test our campaigns to improve their short term efficiency”.
Q. Has Route changed the way you talk to clients about OOH? A. Potentially, yes. I report back to clients on media strategy. So, for something like TV, I would report on ROI, but I also talk to clients about general strategy too, such as which spot-lengths or day-parts work better. Having this data on hand helps give them a deeper understanding and more confidence that what they’re doing is right.
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The Route ahead: commercial challenges As all interviewees consulted for this report agree, these are exciting, ground-breaking times for the OOH industry. They are also challenging times. We know there are huge opportunities to be grabbed, we also know there are holes which need to be plugged. We are working hard to plug them. In this section, you’ll find the Kinetic view of the main challenges as we see them. Many of them relate to Route, but not exclusively.
The challenge: Lack of accountability for digital campaigns Twenty years ago, accountability consisted of asking the question: has my poster gone up? But, since then, all kinds of reporting methods have been put in place so that when clients buy 5,000 bus shelters, they can rest assured that the posters from Aberdeen to Aberystwyth have actually gone up. For example, media owners now check the work of their operatives to ensure that posters go up in the right place, at the right time, and these employees are – generally – paid by results. Various technology-based verification systems have been developed to track this, such as GPS or time-stamped photography, where operatives put up a poster and then photograph it; the camera records exactly where/when the operative is and confirms that the right poster is in position. With this particular accountability issue largely solved, more recently the big accountability question has been: who is actually seeing my OOH campaign? With the launch of Route, we can answer this question. However, the arrival of Route shines a spotlight on where accountability is lacking elsewhere, most notably in digital campaigns. So, the key question on everyone’s lips today is: how can we make digital campaigns more accountable? Occupancy levels have long been the measure of market demand and movement. Multiple advertisers make up the majority of inventory either on a loop or via differentiated day parts making estimating and reporting occupancy levels more complicated. Digital sites have no more guarantee of being fully sold than any other site and offer additional complexities due to their variegated posting
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cycles. The industry needs an advanced inventory and authentication system, utilised across all vendors, if it is to be relied upon and trusted by clients and agencies alike.
What needs to happen? We would advocate independant verification so that we and our clients can be assured when and how long ads have been displayed for. Media owners themselves are well aware of the challenges and are working hard, too, to overcome them. As Jason Cotterrell, Managing Director, Exterion Media, says:
“The industry needs to think about a step change in its digital accountability. There’s an onus on media owners to demonstrate to advertisers that they’re getting what they pay for. The challenge for us is creating those accessible portals and getting the right systems whereby customers can access our systems, so they can get the accountability in real time.”
The Challenge: Lack of client sales data in terms of planning We now have the capabilities to fuse client data with Route and come up with some interesting, helpful insights. We can really define who our target customers are and, so, decipher what OOH they will see. As we get more of this granular data we can perform extremely clever targeting and planning, making client money go much further.
What needs to happen? Clients need to share more of their data and give us a much clearer picture of their customer and their behaviour. In turn, we need to reassure them that we are safe hands for this precious information. That’s why we’ve invested in our own internal data management firm, Meta.
The Challenge: Clients are increasingly demanding exclusivity on digital loops and we can’t guarantee it Media owners, understandably, are primarily concerned about selling their inventory, which is why they are reluctant to agree these types of exclusivity demands. Consequently, they will often not take a booking that precludes other bookings. OOH ads have, historically, been physical structures that don’t change. A poster would go up on a billboard and be, typically, displayed for 24 hours a day for 14 days. That, of course, is still the norm in much of the traditional OOH sector. In this situation, you can see why a client might be disgruntled to see their poster displayed right next to a rival for the duration. However, the world of digital is different. If you’ve got a screen and an ad comes up, which is then followed by a competitor ad, is that the same conflict as having two rival billboards next to each other?
What needs to happen? There needs to be more debate around this issue. As our media changes, perceptions of how it works need to change, too. Display on a digital loop is not the same juxtaposition as in the traditional billboard world and we need to discuss and define the new parameters going forward. A new generation of more flexible media owners is already beginning to emerge and stimulating this debate, led by the likes of Storm, MediaCo, Ocean Outdoor, Forrest Media and Signature Outdoor. As James Harrison, Sales Director, Signature Outdoor says: “We don’t believe this [exclusivity on digital loops] is an issue and, if a client plans early enough in advance, this should not be a problem. We can trade this way or deliver more standard slots. Complete flexibility is the key.”
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The commercial challenges continued… The Challenge: Everyone is talking a different language in the new OOH media landscape
If they don’t invest in this new approach, then they will ultimately risk losing market share.
Some are talking GRPs, others are talking CPT, and then there are others still talking price per panel.
What needs to happen?
What needs to happen? We believe that calls for a common language are slightly premature. The industry is undergoing huge change and a lexicon will evolve organically, as the new order becomes clearer. In the meantime, our expertise lies in translating the different languages, from audience measurement to ratings to cost-per-thousand, to suit individual needs.
The Challenge: Bespoke digital OOH campaigns are the way we are moving, but price doesn’t seem to reflect the premium and systems are unable to cope as it is Clients increasingly want to choose when, precisely, to run their ad in the day to ensure that they catch their target audience and reduce wastage. This is challenging for media owners because their systems are not necessarily set up for this kind of bespoke campaign. At the moment, around 80% of the industry’s revenue comes from 14 day display periods and the industry is built around working in this way. So, this move to bespoke buying is a huge technological, as well as cultural, challenge. Consequently, as it currently stands, it is proving cost prohibitive for most clients to use OOH in a truly dynamic way. But, bespoke is the future. New systems now hitting the market do have this ability to tailor campaigns and this will increasingly become the norm. And, while clients are not generally happy about paying premiums, we believe that they will be, if we can install inventory management systems which make this type of buying quick, easy and effective.
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The Future of OOH A fresh look at trends and predictions for the UK
Again, it’s about healthy debate where all stakeholders are open and honest about their position so all parties can come to a mutually acceptable solution. Naren Patel, CEO, Primesight says it’s about striking a balance:
“The media owner industry fear is that if you have advertisers wanting to book only evenings, or only weekends, then that could result in a loss of revenue. It could also lead to an inability to sell the remaining space or an inability to command a premium for the day-part space they have bought. It’s about managing that balance. Both buyers and sellers need to keep an open mind to achieve that balance otherwise we’ll hit an impasse. So far we’re finding that buyers are very open to having these conversations.” The industry must get better at talking the talk around the new powers-of-persuasion that a digital out of home campaign today can wield.
The Challenge: What is the best trading model for the future? Many leading industry commentators agree with us at Kinetic that DOOH needs to be traded in a much more revolutionary way. MediaCom’s Board Director Gill Reid is one such person. She says:
“We’re still stuck in old cycles and we need a healthy debate about the way forward, or we’ll constantly recycle spend and never grow the marketplace the way it should be grown. We need to look at different trading mechanics to drive efficiencies. The whole of our digital landscape needs to be re-evaluated and we need to find a way of working that is industry-wide. Having different media owners doing different things only adds to the confusion”.
What are the possible solutions? Reid applauds players like Storm for trying to carve out new ways of trading, based more on impacts. “Whether the whole market will move to that, I don’t know, but at least they’re creating a debate,” she says.
approach as essential to remain relevant in an increasingly digitised marketing world. While some are keen to adopt a new trading model quickly, others advocate a much more measured approach, like Exterion Media’s Jason Cotterrell who says:
“The online industry hasn’t nailed its trading model and how things work yet. But, despite this, some in our industry want to cherry-pick all the best parts of their programmatic digital trading test model and overlay it onto OOH. I’m not sure we’re ready for that. It might be to the detriment of the medium. We’ve got to be really careful about what we do adopt.” One thing is for sure: these complex issues are not going to be solved overnight, or through the course of a 36page report. As our UK Head of Digital, Carolyn Nugent, suggests, it’s time for the OMC to expand its influence and remit. Whatever forum the debate takes place in, the most important thing is that it happens. And this, our 2014 report on the future of the OOH market, is the first step. We hope you will take the next steps with us.
One of the popular answers to the question of which trading model should be adopted is “programmatic trading”. But, as Kinetic Global Futurist Jeremy O’Brien explains, the mere mention of this alternative often provokes a variety of lively reactions.
“There are those who recognise opportunity: a conduit to channel spillover from online’s swelling coffers. Others see necessity: an essential bid for relevance in a changing zeitgeist. And still others perceive a threat: the commoditisation of media products and a pricing race-tothe-bottom.” Most interviewed for this report sit in the ‘necessity’ category; seeing moving from the current manuallyintensive booking system to an online-based trading
The Future of OOH A fresh look at trends and predictions for the UK
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About Kinetic Worldwide Our mission is to pull forward, and make real, the future possibilities of the world of communication out of home.
Our specific connection to digital OOH extends to unrivalled expertise and objectivity in this expanding environment in our medium across the UK and Europe.
We are the global leader in understanding how brands can connect with people’s lifestyles and the environments they engage with when out and about.
For more information about Kinetic, please go to www.kineticww.com.
Our expertise and insight allows us to deliver solutions for our clients that achieve brand and marketing goals. Fully owned by WPP and part of the tenthavenue performance marketing division, Kinetic’s expertise and insight helps deliver solutions for clients that achieve ambitious brand and marketing goals. Digital screens are now an important communication opportunity to supplement roadside posters, travel and leisure locations and all kinds of interactive experiences. Some of these may involve mobile phones; others, simple calls to action or time and location-based messaging. We have an ongoing commitment to understanding and engaging with people on-the-go. Kinetic has developed centres of excellence in digital and aviation media, research, insight and data, mobile marketing and OOH printing and production. We seek to maximise the impact of our clients’ investments through strategic thinking, proprietary tools, and the intelligent application of scale. Kinetic’s network reaches across the globe. From offices in 33 cities in 23 countries, we offer dedicated expertise in consultancy, planning and buying solutions and have developed strong partnerships with clients, agencies, suppliers, media owners and technologists.
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The Future of OOH A fresh look at trends and predictions for the UK
The Future of OOH A fresh look at trends and predictions for the UK
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