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Industry Contributor 22 Jun 2022 - 4 min read

Programmatic digital out-of-home: Growth curve to steepen as market clears hurdles, grasps tech fees and pricing is flex trade off

By Brad Palmer - National Programmatic Director, JCDecaux

There’s debate around “tech tax” and disparate pricing within programmatic out-of-home (pDOOH). But the reality is that the industry is maturing fast and advertisers – globally and locally – are on the cusp of significant uptake, says JCDecaux's Brad Palmer.

It took a while for one of the oldest advertising mediums to open up to programmatic campaigns. Now that OOH companies have made that investment, the pDOOH sector is starting to scale, opening up potential for more advertisers to take a smarter approach to digital campaigns, and get to market faster and more flexibly.

New approaches and markets must always overcome teething issues as they mature, and some buyers suggest cost premiums may not suit all campaigns. Of course, not all campaigns currently require programmatic pipes, and arguably the best buyers are the OOH specialists.

But, after two years of programmatic trading locally, there is a reason pDOOH is tipped to be the fastest growing digital media over the next 12 months.

New technology means added choice for buyers – and that’s a good thing

Some advertisers and agencies are more comfortable with traditional out-of-home right now – and that’s totally fine.  Around 20 per cent of the programmatic briefs that JCDecaux received in 2021 ended up running as a traditional booking. This is evidence that agencies or advertisers were happy and curious to explore programmatic options but potentially more comfortable to run the campaign in a traditional way. This preference may change as the landscape matures. Technology has evolved to allow us to provide our clients with more options to consider and we believe that choice is a great development for buyers.

Tech fees are part of the programmatic ecosystem and in out-of-home they are helping drive innovation for local agencies and advertisers

Fees exist in the supply chain because they help drive the innovation that clients are demanding. The DSPs and SSPs in the Australian market are global companies who have set up offices to support and localise their product. Despite campaign sizes often being 70-80 per cent lower than a traditional booking, the demands around audience targeting, proximity requests and additional data all remain the same. It’s a similar level of work for the media owner and for the DSPs/SSPs to partner up with tech vendors who also have certain fees that need to be accounted for.

As adoption and revenue scales the tech fees might start to evolve. It’s worth remembering that fees are powering innovation and providing understaffed agencies the technical support they need as they learn to execute out-of-home programmatically.

There is a premium on the media owner CPMs but it’s no different to broadcast linear TV versus programmatic BVOD/CTV where high CPMs are universally accepted by the buying market

Linear TV and out-of-home have always been true broadcast media. TV moved into programmatic trading four to five years ago, starting to execute campaigns with smaller investments with data overlays. That flexibility and level of targeting was new to TV and the market now pays a higher CPM – which is reflective of the investment level and execution requirements.

JCDecaux has dedicated five per cent of its loop to programmatic to give our advertisers guaranteed supply to activate campaigns in the locations with complete flexibility. There is an opportunity cost to our business to do this. But it is worth the risk as new advertisers try out-of-home and digital budgets shift into our channel. It helps fund the capital expenditure required to install new digital inventory every month across the country. This in turn provides more opportunities for our traditional and programmatic advertisers which is a win-win for all parties involved.

There is momentum across the globe for programmatic out-of-home as Australian adoption picks up speed

Some media owners in Europe are already trading 40 per cent of their digital revenue via programmatic. Specialist programmatic digital out-of-home buyers like GroupM’s Sightline forecast investment levels to “exceed the growth rates of overall advertising investments each year – and by 2x over the next three years”, according to its recent DOOH Difference Report.

If we reflect on the last two years and look at the current global trends, then it looks like programmatic out-of-home will continue to grow and attract new and diversified buyers into the OOH category. The level of understanding for existing advertisers continues to develop – and we’re seeing some great campaign results from the early adopters in this very exciting space.

In the meantime, as OMA Chair Charles Parry-Okeden underlines, all options are open: “Buyers have a choice.”

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Brad Palmer

National Programmatic Director, JCDecaux

Market Voice

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