In what has been a tumultuous year for the global economy, digital out-of-home (DOOH) has proven, once again, its agility and resilience. For The Drum's Deep Dive into OOH, the Hivestack team predicts that the future will remain bright for advertisers in 2023, thanks to new innovative products, environments and technologies.
With the global economy in a state of instability as we head into 2023, marketers will need to be more strategic and effective with their strategies if they are to continue reaching a global audience with precision, at scale. Furthermore, with the constant stream of news and global affairs pulling audience attention in every other direction, brands need to deliver greater campaign flexibility and efficiency if they are to continue to cut through the noise.
Programmatic digital out of home (DOOH) allows marketers to merge offline and online environments, not only looking beyond automation, but supplying campaigns with greater targeting, flexibility and measurability for DOOH activations. This ensures that no budget is wasted. As we move into the year ahead, from new mediation layers to the metaverse, the DOOH industry shows no sign of slowing down.
Here are our top DOOH predictions for 2023.
Gen Z (the first generation of digital natives to grow up with fully global and data-driven technology), is estimated to make up 27% of the US population by the end of 2022. As this segment continues to mature and their share of the population increases, they will have increasing influence and buying power.
What does this have to do with the metaverse? As the world reconsiders how we shop, a recent Forbes article revealed that Gen Z is set to lead retailers into virtual environments. Companies must be prepared, both strategically and technologically, to provide their younger customers with a seamless experience across multiple devices, including VR (virtual reality) and MR (mixed reality) glasses. For this reason, we will see brands and retailers devoting more dollars into metaverse digitization, because wherever consumer conversion is happening, brands will be there.
At its core, programmatic advertising helps marketers activate ad opportunities using automated technology and optimize their returns on ad investments. In the physical world, screens in retail stores or large billboards are able to make ad requests in real-time to ad exchanges, which then propagate the ad request to multiple DSP platforms. Even the largest DSPs are getting in on the action, with Google, The Trade Desk, Yahoo officially supporting DOOH buying.
Programmatic DOOH has the potential to open the doors for advertisers to activate their campaigns on DOOH screens in the metaverse, the same way they buy ad space in the real world, allowing them to target avatar shoppers “in universe”. Although we are only at the very beginning of this conversation, the industry needs to start to think about the possibilities this channel will bring to the generation of future consumers.
Over the last decade, many platforms have emerged to bring new demand options to DOOH and many more will enter the market over the coming years. This presents both an opportunity and a challenge for publishers since there are more demand options and operational inefficiencies to consider.
Header bidding consolidates SSP integrations through a single platform in order to offer more flexibility and optimization. Header bidding takes into account bids from each SSP and selects the best outcome, such as the highest CPM. This is exciting for publishers as it does not require extra development resources to implement. Recently, Prebid.org officially launched a DOOH taskforce which will enhance the Prebid framework with DOOH support.
As the unified auction framework becomes commonplace, competition for inventory will rise through the competitive bidding process. Publishers benefit from an increase in yield and buyers benefit by having greater access to premium inventory. This is great for both publishers and buyers as it drives transparency through the supply chain. 2023 will be known as the year that header bidding becomes mainstream in DOOH.
It's no secret that creativity is one of the top drivers for profitability in advertising, so it is promising to see new and innovative creative formats emerging to meet the growing demands for effectiveness. For the larger-than-life medium that is OOH, the need is no different. Personalizing a one-to-many environment used to be next to impossible, but there are now new opportunities available.
In 2022, we saw the emergence of Dynamic Creative Optimization (DCO) in DOOH, allowing marketers to capitalize on key “moments” and a consumer's state of mind in real-time, resulting in a more human, memorable and contextual connection. We’ve seen the likes of audio OOH continuing to break through as an emerging format within DOOH and now multi-dimensional creative formats like anamorphic 3D video are starting to come of age. We expect 2023 will give rise to increased adoption of these new formats as marketers are challenged to continually think outside of the box when it comes to engaging target audiences.
As consumers continue to leave their homes, whether it’s to socialize, eat out, or shop and travel, DOOH has earned its place among advertiser marketing strategies and in 2023, DOOH will provide even more opportunities to extend omnichannel strategies further. With DOOH ad spending on the rise, brands are seeing the appeal this channel provides. This is reflected not only by its larger-than-life size creating visually impactful canvases, but also the fact that ad creative is unskippable and unblockable with DOOH executions.
What we have learned recently is that DOOH is not only a great medium to support a programmatic approach across omnichannel campaigns, but also enhances the message, precision, overall reach and awareness of more digital-centric video campaigns. Moving into 2023, consumers' habits will continue to evolve, and marketers must learn to adapt to those changes. CTV and DOOH channels will continue to grow, and advertisers should take advantage by leveraging video across both channels when given an opportunity to do so. There are also numerous creative opportunities for marketers harnessing both DOOH and CTV for omnichannel marketing, reaching consumers both in and outside of their homes with consistent messaging and creative to drive successful results.
We expect to see the DOOH industry mobilize further and take collective action to tackle the climate crisis and drive sustainability within our industry, for both people and the planet. In a world where waste is no longer an option, we will continue to see increased adoption of automation and technology to drive greater efficiencies throughout the supply chain. Within DOOH specifically, programmatic software will become integral to achieving precision in audience targeting. With this approach, the planning methodology is centered around delivering ads at certain times of the day when audience concentration levels are at their highest. This important shift towards meaningful connections and limiting non-essential messaging when there is no audience present, will not only maximize the effectiveness of a campaign, but deliver a powerful message for sustainability. Although no legitimate framework has been created, we anticipate that these conversations will bring the beginning of this necessary change in the new year.
To find out more or speak to a member of our team, visit www.hivestack.com