Ask the Board – March 7, 2016 | DANIEL WILKINS

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In your opinion, is Programmatic Advertising a good thing for DOOH? If so why? If not, why not?


In short, I think programmatic, in some form, will be helpful to the digital out-of-home industry; however, I believe we are still some time from the successful implementation of a programmatic system that actually benefits both the media owners and the advertisers in equal measure. By definition, programmatic requires a common impression methodology that can be implemented across all screens, and one that is accepted by the planning community as accurate. This methodology currently does not exist, nor could many of the networks afford to pay a third-party research company to apply that methodology to their screens for inclusion if it did. Traditional online publishers don’t have this issue, which made programmatic buying much easier to implement in online. An online publisher doesn’t need a third-party research company or auditor to verify an impression methodology. The IAB determines the industry standards and the publishers implement them. They may choose to utilize a third-party verification service to alleviate advertiser concern, but it isn’t required to be included in programmatic. I think it would be difficult, at this juncture, to convince a planner or a digital buyer that an impression based on cash register transactions, directly from the network operator, for screens in a retail environment, where the screens are located in the back of the store, are valued the same as impressions generated from a reputable third-party research company for a screen in a class-A office building elevator.
 
Additionally, DOOH screens exist in the real world, with a finite amount of inventory. Network owners must be very careful in how they approach programmatic as it is being developed, as it will be extremely difficult for them to recover profitable CPMs if the CPMs are dragged down by programmatic. The networks don’t have the luxury of a near infinite amount of inventory with which to cycle through for impressions. There are a fixed number of spots and time available to a DOOH network operator, and programmatic may make it difficult for them to maximize their value at a later date.
 
My guess is that the reason the implementation of a programmatic process for buying DOOH has been so unsuccessful to date, is because the attempts have been made to fit DOOH peg into the online hole, instead of creating a whole new process that takes all of the amazing attributes of DOOH, as well as the industry specific challenges, and create a new hole.

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Chief Client Officer
Agency 672

MEMBER OF THE DSE ADVISORY BOARD
Advertising & Brands Council

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