For several years, various industry sources have reported that out-of-home (OOH) advertising is the only advertising channel that’s growing, not declining like traditional outlets such as TV, radio, and newspapers. According to market research firm Magna, OOH ad spend is estimated grow another 2% to $8 billion in 2018. A major reason for this boost is because Facebook, Google, Spotify, and other data-driven tech companies have poured billions of marketing dollars into billboards and other forms of outdoor signage.
A recent Bloomberg article describes the new game plan for these companies:
Facebook recently ran an outdoor campaign to promote its new approach to user safety and privacy. Music-streaming pioneer Spotify Technology SA teamed up with the Brooklyn Museum to honor music icon David Bowie in subway advertising. And semiconductor maker Intel Corp. hyped its artificial-intelligence technology that’s used to help find criminals in a crowd.
“Tech companies have become massive spenders of outdoor advertising but in specific ways,” Vincent Letang, executive vice president of global market intelligence at research firm Magna, said in a phone interview. “Bus stops, train stations and airports are good places for these companies to reach an active workforce and to generate social buzz.”
As I’ve noted in the past, current market trends favor the symbiotic relationship between the OOH industry and the technology sectors. According to Nancy Fletcher, the President & CEO of the Outdoor Advertising Association of America (OAAA), “OOH is growing because it complements digital media by priming search, mobile and social engagement.”
Google, Facebook, and other large tech companies have mastered the acquisition and application of Big Data, which drives their marketing, R&D, and all other aspects of their business models, and in turn, translated into huge financial successes and more.
But if there’s anything that holds true in the rough and tumble world of the modern market economy, change is inevitable and necessary as pointed out by the great economist Joseph Schumpter:
Any existing structures and all the conditions of doing business are always in a process of change. Every situation is being upset before it has had time to work itself out. Economic progress, in a capitalist society, means turmoil.
A major shift in cultural attitudes and the legal environment favoring stronger privacy protections will make it impossible to continue doing business as usual. The main challenge today for Corporate America is to balance privacy and relevant content as they handle customer data.
Even as the privacy debate evolves and new laws and regulations come into play, data-driven practices will continue to be part of sound business practices for years to come. Most people still have a “legitimate interest” in viewing advertising that is relevant and well-matched to their needs as consumers. A Harvard Business Review article summarized the current state of social science research and consumer attitudes:
There’s still a lot we don’t know about how people respond to online data collection and ad targeting, and norms around privacy may change over time as young digital natives become consumers and technology further penetrates our lives. For the time being, applying norms from the off-line world can help companies predict what practices consumers will accept. In the end, all ad targeting should be customer-centric—in the service of creating value for consumers.
Being the good innovators they are, it’s not surprising that Facebook, Google, and all the other big tech companies are exploring the possibilities offered by the OOH market. Billboards have great reach and visibility and do not harvest any kind of personal data that can run afoul of privacy laws and regulations.
But what if I were to tell you that a billboard owner or advertiser can still access real-time data, measure impressions, and determine which impressions resulted in conversions while staying in compliance with GDPR and other similar privacy laws? What if I were to tell you that a data-driven marketing is still superior to gut instinct?
Ultimately, when customer data is properly acquired, understood, and applied, a business can make sound business decisions that can make a significant difference for revenue. Amazon, Google, and all the big tech companies already know and play this game well. It’s past time for the OOH industry adopt some of their best practices and join the 21st century.
Post Published August 27, 2018