Out-of-Home (OOH) has always stood as a pillar of brand visibility, offering unique and powerful touchpoints in the consumer journey. However, despite its undeniable impact, OOH faces certain challenges that have slowed its growth compared to its digital counterparts. The core of this challenge lies in the delicate balance between cost, measurement, and return on investment (ROI).
The Cost Conundrum in OOH Advertising
The marketplace’s desire for OOH is indeed growing, but not as rapidly as digital. A key reason for this is the cost structure involved in proving OOH’s effectiveness. In digital advertising, media buyers are willing to pay a premium CPM (Cost Per Mille) for ad placements, often because the performance insights—KPIs like impressions, clicks, and conversions—are built into the platform’s reporting suite. These insights come at little to no extra cost, making it easier for advertisers to gauge the effectiveness of their campaigns and adjust strategies in real-time.
In contrast, OOH advertising operates on a different plane. The costs associated with physically placing and maintaining outdoor ads are inherently higher. However, the CPM for OOH is often lower due to the perceived value gap in measurement capabilities, among other reasons. Here’s where the tension lies: while digital platforms offer high CPMs and low measurement costs, OOH offers low CPMs but high measurement costs. The irony is that to prove the performance and effectiveness of OOH campaigns—through metrics like impressions, reach, frequency, or even more advanced attribution models—the costs have historically been prohibitive.
This complicated dynamic has contributed to digital’s faster growth trajectory compared to OOH. While digital and outdoor ads serve different purposes and touchpoints in the consumer journey, they inevitably compete for marketing dollars. And, the playing field isn’t level. The biggest determinant of successful growth in advertising is ROI, and it's significantly easier and cheaper to measure in digital channels.
Navigating the Future of OOH
So, where does this leave the OOH industry? As someone who has transitioned from a digital marketing background into OOH, I’m excited about the massive growth I’ve witnessed in the industry over the last few years. The adoption of measurement and insights in OOH has surged, but there’s a catch: this level of measurement often only applies to campaigns that can bear the additional costs.
Imagine if Google Search only provided KPI reporting for the top 50% of the largest advertisers. Such a scenario is unimaginable because local businesses heavily rely on these reports to understand the effectiveness of their media buys and pivot strategies when needed. In digital, data is the great equalizer—offering insights to all media buyers, regardless of their size. This principle has driven digital’s widespread adoption. Reporting is free, included, and scalable.
Simplifying and Democratizing OOH Measurement
Our challenge in OOH is that measurement isn’t as clear-cut. Explaining an attribution study or modeled data to a first-time OOH buyer can be daunting. However, simplification is key. While attribution tests can yield statistically significant insights, buyers ultimately want to know two things: Did it work? How well? And if not, why?
To level the playing field, we need to democratize access to the same level of insights across the industry. If some campaigns from certain buyers provide conversion insights while others only offer static impression numbers, the inconsistency will hamper OOH’s growth.
In the early days of selling Facebook advertising, I’m sure there was fear of poorly performing campaigns. Yet, the risk was taken. Some campaigns failed, but many succeeded, contributing to the platform’s rise as one of digital’s largest channels.
The OOH industry is on the cusp of a similar breakthrough. By simplifying and standardizing measurement and making it accessible to all advertisers, we can bridge the gap between OOH and digital. In doing so, we’ll not only prove the value of OOH but also secure its place in the future of advertising.
