According to Magna Global, revenues for digital out-of-home (DOOH) advertising increased by 21.9% in 2018, yielding impressive ROI of $5.97 in sales for every $1 spent. DOOH, coupled with programmatic buying, is rapidly expanding to enable organizations to provide consumers with highly immersive and engaging ad content. While there are still a number of challenges facing the DOOH space that the industry must address, brands that are taking the plunge are driving significant business outcomes.
We invite you to watch our all-star panel of experts for an exciting and educational webinar to learn how combining the power of algorithmic decision making with the impact of DOOH and enhanced data insights can enable organizations to scale processes rapidly and efficiently. Programmatic buying is projected to account for 82.5% of digital display ad purchases next year, according to eMarketer, and we want to ensure that your organization understands how to best maximize your DOOH investment.
Andreas Soupliotis, Hivestack, Founder & CEO
Diane Carlson, Samsung SDS, Vice President, Digital Retail Transformation team
Romulus Stoaian, Samsung SDS, Director, DOOH Marketing Solutions Leader
John Bertoli: Hello, good morning or good afternoon, everyone, based on where you're located. My name is John Bertoli. I'm the head of Marketing and Partner Services at Samsung SDSA, and I'd like to welcome you to our webinar: How Digital Out-of-Home Analytics and Programmatic Buys are Driving Business Outcomes.
John Bertoli: This is the first of many webinars we have planned for 2019 where we plan to shed some light on critical business issues for companies competing in today's highly competitive, ever-changing landscape. We are joined today by our moderator, Diane Carlson, VP of Digital Transformation. Romulus Stoian, Director of DOOH Marketing Solutions. And Bruno Guerrero, Chief Product Officer at Hivestack.
John Bertoli: A few housekeeping notes, the audience will be muted during the entirety of the webinar. We will be hosting a Q&A session at the conclusion of the webinar, so we encourage everyone to submit questions throughout the course of the webinar. And if you have any technical issues, feel free to reach out and we will attempt to address them as quickly as possible. With that said, let's kick off the webinar starting with Diane Carlson.
Diane Carlson: Hello, everyone, and thank you so much for joining our discussion today. I apologize in advance, I am working on getting rid of a cold so my voice is a bit crackly. I do pardon if my voice fails a little bit, but I'm very excited to be here today and joined by my colleagues, Romulus and Bruno, who have really deep expertise and knowledge of this industry.
Diane Carlson: Today, we're going to delve into the factors that will make DOOH an important lever for brands and marketers to pull as they try and look for their buyers out in the marketplace and how programmatic DOOH in particular is really poised to change the industry. Before I delve into the panel, let me just start with some quick facts from the market.
Diane Carlson: According to Magna Global, DOOH net advertising sales will increase 16%. The overall out-of-home marketplace is a $7.8 billion marketplace in the US according to OAAA. If you look at Nielsen, 46% of adults have used a search engine to look up information after seeing or hearing a billboard, an out-of-home billboard, and out-of-home marketing boasts an ROI for every dollar spent in out-of-home, you can get almost six dollars in sales.
Diane Carlson: So those are all really impressive stats, and it shows the impact that out-of-home plays, how important it is in the media mix and now, with digital capabilities, how it stands to be a real game-changer. My first question I'm going to pose to you, Romulus, please tell us how you see these digital capabilities adding value to the industry.
Romulus Stoian: Thank you, Diane, and good afternoon everyone. I'm Romulus Stoian with Samsung SDS. Yeah, I believe that the digital component of the out-of-home advertising is not the baby anymore. I think it's becoming a toddler, and it's growing. We're talking about the market segment amounting about $2.5 billion in the US out of the $7.8. Thank you, Diane, for saying that.
Romulus Stoian: I think the value of digital out-of-home in our space is that it's more content-relevant. It's vibrant, it's dynamic, it's reactive, it's interactive. We are talking about the game change where the industry's becoming more targeted and more data driven. Definitely, I want to say that the industry's facing a wave of destructions in the next 10 years, based on the projections from Magna. We are talking about an attitude of consumers, which is a reflection of how they perceive the media.
Romulus Stoian: Right? It's more specific about how people will engage with retailers and brands, how much time they spend outside of their homes. Like, 7:00 AM, 7:00 PM, 80% of Americans, they own a mobile device with a GPS activation. Those are positive outcomes for the DOOH segment, which is expected to grow by 24% by 2021. The DOOH segment that we see today in the most of the North America is like indoor. Very heavy indoor. Airports, metros, shopping malls, place based. And also, what's getting traction right now is smart cities with street furniture.
Romulus Stoian: In terms of content, I think we're talking about one of the most important advantages of digital out-of-home is that it's dynamic. It reacts to geo-temporal conditions, it can be adapted, it can be changed, it can reshape the face of a branding campaign in real-time.
Romulus Stoian: So I believe we're talking about a momentum right now, when the consumer intelligence and activation, and mobile activation will be amazing attributes for out-of-home campaigns.
Diane Carlson: So Romulus, I know this next slide you have a bit of knowledge about. Can you talk about Link New York City and how that's really changing a city landscape with digital?
Romulus Stoian: Yes Diane, I want to say something that I believe Solomon mentioned, I'd like to quote that, they mention about we are talking about the second wave of destruction that's happening right now. Because the first destruction was arrival of digital media, but the second is digitization of all media.
Romulus Stoian: So I think talking about the US market, I think LinkNYC, I see it in my eyes, the best example of great execution of DOOH, the data driven DOOH. It's a smart media execution, that is a fantastic initiative that goes around the globe, I think we're keeping a great momentum, and the US market is slightly adapting to that. Anything's off of urbanization, and people are migrating into the big cities, I think by 2050, Diane, two thirds of the population will live in the big cities. I think the right growth, where the growth is.
Romulus Stoian: In terms of LinkNYC, I think it's a trifold. It's good for city, it's good for community because you are talking about a screen that has wayfinding, you have WiFi capability, you have charging zones capability, you have Skype.
Romulus Stoian: So I think it's good for the city, it's good for the community, also it's good for the brands. Because we're talking about consumers actively on the go that can be geo-targeted through the smart technology in terms of beacons, or mobile device ID's in the streets of New York.
Diane Carlson: Yeah, it's very cool technology. We know that online has really set the bar for audience targeting, and DOOH in order for it to be successful in the field have to be accountable and measurable. There's a great quote from Arthur C. Neilson, "The price of light is less than the cost of darkness." This appeals to us in particular because we think data is so important, and nobody wants to be data dark. It's all about having that data to make smart decisions.
Diane Carlson: So Romulus, another one for you, but what are some of the ways we can measure performance in DOOH?
Romulus Stoian: Right, thank you Diane. I just want to mention I'm honored to be one of the pioneers, that I was involved in the first Digital Audience Measurement with GEOPAK's DAB at the time back in 2008 in Chicago. So I think we are talking about one of the oldest medias, which is out-of-home advertising. For many, many, years, 100 years plus, from the old times of out-of-home there was one term, DEC. Daily Effective Circulation.
Romulus Stoian: I think the industry, the changes in technology, really improved the metrics of out-of-home. So 2008 was when the out-of-home advertising industry migrated from DEC to impressions, to impression based measurement. At the time was called Eyes On Impression, and slightly that became out-of-home impressions.
Romulus Stoian: We are on par, right now, with the radio, with television, with online, in terms of measuring the traffics, measuring impressions. We can sell based on TRPs and GRPs. I think Diane, we're going to 2.0 level of measurements when we have external inputs. Such as digital intelligence, media analytics, mobile device ID's, beacons. I think this is creating a more layer of transparency, accuracy, a real reliability in the media measurements. Which is exactly what brands are trying to hear, exactly what agencies are trying to get.
Romulus Stoian: When we met with Mark’s team of Proctor and Gamble in Cincinnati, that was the very first question from him. We said, media analytics combined with mobile device IDs are creating the most accurate, the most transparent way of measuring consumer engagement. I think this is the future.
Diane Carlson: Very powerful. If you look at the headlines today, there's a bit of fake news I think. People are hailing the death of retail, is retail dying, there's an apocalypse going on. In January I listened to one of the analysts Teresa talk about, from Forester, talk about the industry. The retail industry has actually seen quite a bit of growth over the last 6 years. I think the issue here is that retail isn't so much dying, it's just evolving, and buying patterns are changing. So brands really need to adapt.
Diane Carlson: My next question is to Bruno. Bruno, can you tell us how you see brands using programmatic and digital out-of-home, to drive growth for their businesses, for their brands?
Bruno Guerrero: Yes, thank you Diane. According to E-Marketer retail, 90% of purchases still happen in-store. So, even though there's a lot of budget being spent online for online purchasing, most of it is still done in store. So there's a lot of investment being done by brick and mortar to drive people to go in their store.
Bruno Guerrero: But now with all the measurements capabilities that we're able to do related to digital out-of-home and programmatic digital out-of-home. With everybody now having a mobile device, and having different types of big data sets of mobile device IDs. Then we can kind of understand the behaviors, understand people and where they've been, and starting building profiles based on locations of devices of people where they've previously been.
Bruno Guerrero: I have different case studies that maybe will describe how those brands are leveraging measurements and programmatic digital out-of-home. So, Nordstrom Rack is a technology company we've worked on several types of brands, Nordstrom Rack is one of them. Nordstrom Rack are opening multiple different stores in United States, and they've worked a lot with Hivestack in terms of every time they're opening stores. And the goal the KPIs that Nordstrom Rack wanted to do, they want to drive in-store visitation to their new store, by drawing traffic from consumers that frequently visit competitive stores.
Bruno Guerrero: So after the opening, what they want is to try to keep people coming into my stores with new technologies, with data, with measurements that we're now able to do with digital out-of-home. We've discussed where we could do campaigns where we geo-fenced all the different competitive stores, such as T.J.Maxx, Marshall's, and we looked at devices that had been frequently in those competitive stores. Before the campaign starts, before they start this store opening. And then we built our profile of people that are going to those stores.
Bruno Guerrero: Then there's a lot of home campaigns running on digital out-of-home screens. Billboard, outboard, digital out-of-home screens or digital place-based screens. And when we observe a high concentration of the people that are in front of the screens, we deliver an ad. So we're targeting a specific audience the same way digital buying is being done, using cookie or using device ID segmentation profiles. We can do that based on past history of location of different people. So that when we're exposing a different device to an ad, then we can understand afterwards how these people- what they've been after, if they went to the store, to the Nordstrom Rack store after being exposed.
Bruno Guerrero: And we compare that to a control group of unexposed devices in the same market that have walked in into the Nordstrom Rack, because there's always going to be natural foot traffic. And the difference between the exposed group compared to the control group is the lift. So we can measure conversion, and with that specific campaign, with Nordstrom Rack, we've measured a lift of 39% of people exposed to a digital out-of-home ad that have walked in into the stores after being exposed.
Bruno Guerrero: We've done other campaigns also with Keurig in Canada. Keurig, they build coffee machines, and they sell also little K-Cup pods to put into the coffee machine, and they are selling their product in big retailers. And they wanted to expose ads to people that are often going to those retailers, to tell them to buy their K-Cup pods. So what we did, we geo-fenced those retail places, and we activated digital out-of-home screens when we are serving high concentrations of people going to those retail stores so that we can expose an ad to them, and then measure conversion from those people that have actually been there. And then we saw a lift of 19% of people exposed to the ad compared to the control group.
Bruno Guerrero: And to a certain extent, what we're also being able to do, not only measure conversion from digital out-of-home to offline walk-ins, offline foot traffic, but we've been also going to more online, the same way as digital buying's being done. There's a lot of budget being spent on app downloads. I'm going to spend a budget, and what I want to drive is people to download my app and start using it. So with digital out-of-home that taps into data, we can understand people exposed to the ad by tapping into IDs that are the same IDs that are being used online. So the ID is, say, the Apple device ID or the Google advertising ID. And then we can understand from the app stores of Google and Apple which IDs have downloaded the app. So if we compare people exposed that have downloaded an app, compared to unexposed people that have downloaded the app, we can understand lift.
Bruno Guerrero: So we did a campaign with Just Eat, which is an online food order and delivery service, and then Just Eat wanted to drive people to download the app instead of going to the restaurant. And we saw a lift of 23% more downloads from people exposed to digital out-of-home ads compared to not exposed. So by adding measurement to out-of-home, this is all the different things that brands, and even brick and mortar stores, can leverage. And that's more budget that they can make. They can measure conversion. They can understand foot traffic, and they can understand better the success of the campaign.
Diane Carlson: Those are great examples, Bruno. Thank you so much for sharing. So let's turn around a little bit here and talk about programmatic in-depth a bit more, because when you look at, for example eMarketer says that 85% of all digital ad-buys will be programmatic in 2019. But there's a bit of a disconnect with out-of-home. Only 39% of media buyers are aware that they can buy out-of-home programmatically. So it's just not lining up. There seems to be a lack of awareness. So Bruno, can you talk to us a little bit about what needs to happen in the industry for digital out-of-home to become more mainstream? I know this is your area of expertise. What needs to happen? And if you could tackle it more first from an assessment and measurement standpoint, I'd appreciate it.
Bruno Guerrero: Yeah, sure. Being at a technology platform, and being in the technology side of the industry, there are several things that I feel could be done. We're already advanced compared to where we were last year or the year before, but there's still a lot of improvement that can be done and a lot of challenges that we need to go through. So impression, audience first impression is key for programmatic buying in any different types of scenario. Before I talk about digital out-of-home more specifically, let me step back a bit, just online web-display buying. Traditionally, many years ago, the way even websites were selling their advertising was 'I'm going to sell to a brand. I'm going to put it on my website for everybody to see it. The location, it's just going to be on the front page, top. And they're selling weekly ads that are on their website, and there's going to be approximately that amount of traffic.
Bruno Guerrero: And that has changed a lot. Similar to how out-of-home is being bought in a traditional fashion, so like putting the ad on that screen and it's running for the entire week. And that has moved to impression buying, which is key for programmatic buying. So instead of buying the website, and being there for the entire week, they're buyers buying the audience. Buyers are buying impressions by impressions. So when somebody goes on their website, at that time in real time an ad request is being made, and there's and option and different buyers using different buying platform tools. And once a buyer has a specific single impression, that first image that is on the screen, and they use data. And they use data to understand who that person is. So using cookies and device IDs, those many technologies that exist, so that every time a person is navigating through a website the option is being done in real time and that person buys single impressions to be delivered to that person.
Bruno Guerrero: And it's all being bought CPM-wide. Cost per million. So that's the currency, impression and CPM that is being used for additional buyers. If you want to start bringing digital dollars to out-of-home, impression is key for all of this, so that's why starting buying impression-based and audience-based, understanding the audience in front of the screen and delivering to that audience instead of picking location, entering a budget, entering the CPM or buying against a CPM and entering and delivering a first impression is key for programmatic out-of-home to be there in a measurement fashion.
Bruno Guerrero: Now one of the challenges is how do we understand how many people are in front of the screen? So there's a lot of work being done to allow access to mobile data and Romulus talked about it a little bit earlier. So companies like Geopath, Nielsen, or even in the UK Route or Australia MOVE, in Canada Conde, are all thinking how can we get more data so that we can convert an ad being played on a board and understand how many people is in front of the screens at that time, so that we can report back the number of impressions to buyers, so buyers can buy programmatically using the same type of currency that they're buying digital. Using CPM and impressions.
Bruno Guerrero: We need to kind of continue improving how we can measure people in front of the screens, and technology needs to start supporting different types of ways which I will discuss a little bit further, but regarding impression multipliers and all these things. So impression is key.
Bruno Guerrero: The other thing that I think might also even help more is being able to measure business outcome. The same way as I described a little bit previously with my case studies, digital buyers are buying based on conversion, based on attribution. How many people have seen my ad and maybe clicked on it? Have walked into my store? Have downloaded my app, went onto my website and purchased something?
Bruno Guerrero: So if we're able to measure business outcome, measure effectiveness, effectiveness of the campaign, at that point if somebody's investing in out-of-home and able to understand the conversion, the business outcome compared to investing into online, then if 100 for a certain amount of money for budget, they're seeing more conversion, more business outcome from a digital out-of-home campaign, then there's a high probability that they would like them. There's more money into digital out-of-home compared to other channels. And I think by being able to measure more accurately business outcomes, this will drive a lot more budget to digital out-of-home.
Diane Carlson: That makes sense, and Bruno how do you see supply and demand playing a role?
Bruno Guerrero: Yes, supply and demand for sure they can help a lot in bringing industry to grow and taking more dollars from digital buyers which are buying programmatic on other channels. I think one of the main things that we need to do is to make the inventory, supply inventory, to make it visible. To present it buyers that are currently buying programmatic other channels, to make it in a similar fashion, available in a similar fashion than other digital inventory. To make it easy for them to buy, so that buying Facebook is as easy as buying digital out-of-home. If we're able to encompass and to be able to make it easy for them, more budget's going to be spent.
Bruno Guerrero: There was a lot of buys that started coming from channeled DSP. Channeled DSP means DSP that are optimized and can only buy digital out-of-home. And one of the reasons for that is because DSP could be built on top of infrastructure that already exists in a one-to-many type of fashion, where there can be many people in front of the screen at the time of delivering an ad, where the offline mechanism where an out-of-home sometimes loses connections to have an ad being displayed - you don't want to see a black screen on an out-of-home screen. So there are all these kinds of limitations that out-of-home lives with. Channeled DSP, we're starting to build, rebuild, and be made possible with the different types of challenge that exist there.
Bruno Guerrero: So there are a few channeled DSP that are starting pumping up in different markets and they start to have some buys, programmatic buys happening. Now what we're seeing is the un-channeled DSP are starting to get it. The big ones like MediaMath, Adform, Adobe, The Trade Desk, Google. And when those guys are going to come in, this is where there's going to be a lot of budget coming from these guys. Because there's a lot of training that digital buyers that like to use a single DSP, and to have all their different buys going to that single DSP. So we absolutely, as a supply-side in technology, to make it easy for DSP to integrate because those Omni-channel DSP, they are looking at out-of-home and they are looking at how much money they can make by supporting digital out-of-home. And there's going to be some work to be done on their side.
Bruno Guerrero: And we're competing as an industry against other types of channels. OTT, TV, programmatic TV, mobile. So they have all these places where they can invest money, and this is where if we make it as seamless as possible for DSP to integrate, for them the business case is a little bit less because the spend is going to be less. So right now I think we've been very successful in supporting standards that they support. I.E. the OpenRTB, Fast, HTML, transaction based on options. So by making this very easy for them, then they'll come and integrate more easily.
Bruno Guerrero: The other thing, audience targeting is key. DSP, demand-side platform, when buying programmatically they're buying audience. They're buying people. They're using DMP connected to the DSP. They're having first-party data. So all these capabilities need to be brought in out-of-home so that buyers cannot pick location the same way that out-of-home has been bought traditionally, but can buy an audience, set a budget, set a TPM, and let the system deliver an optimizer campaign against the target audience that you have.
Bruno Guerrero: With mobile data we're able to better identify the audience, where they are at what moment, so that DSP can buy. So it's DSP with supply-side. We're able to allow buyers using those platforms to buy a specific audience on digital out of screen. That would help a lot also, and will make it simple and more aligned with what they're doing for digital buying.
Bruno Guerrero: One thing also that right now will have to be a challenge, and we'll have to see how we can better simplify the process for buyers from a supply-side perspective, is the creative process. Every creative right now for out-of-home needs to be approved by media owners, publishers, before being put on their board, which is very understandable. I think it's going to stay like this for a certain period.
Bruno Guerrero: So if we can simplify a little bit the process for buyers, because buyers right now when they're buying digital inventory, a video on YouTube, they're setting up their campaign and the campaign can run within 30 minutes. We need to make it seamless, as easy as possible, so that they upload a creative to set up a campaign, and then easily the creative can be approved and the campaign can start running. So we'll have to spend a little bit of effort there to simplify a little bit the process on the creative side.
Diane Carlson: Thank you so much, Bruno. Exciting days on the horizon, and lots more efficiency in the marketplace. So now I'd like to turn our attention to overall market adoption, if you look at it from a macro view, global view. When you tend to live right outside of a big metro like New York City, you think that digital is pretty much the norm. But in fact, that's not really the case. The industry is still in the early stages of transforming.
Diane Carlson: So let's talk about who's leading the way, and why you think that is. So I'm going to turn this question to, let's see. Bruno, would you like to answer that?
Bruno Guerrero: Sure, thank you Diane. We've worked with multiple supply-side and demand-side partners in several countries. I think there's a lot of different markets that are investing a lot in digital out-of-home today. Right now we're seeing a lot of buys coming from the US. The biggest media owners are now onboarding programmatic digital out-of-home. The Clear Channel, the JCDecaux, Lamar in the US. All of the big guys are starting to invest more and more spending to additional programmatic out-of-home. So in the US it's happening. There's a lot of buys being done.
Bruno Guerrero: In Canada, also. The biggest media owners in Canada in the training desk are spending a lot of money. The Campion, the AmNet, with the biggest media owners that are in Canada. Also in Germany, Germany has been very very successful since two or three years, in bringing a lot of programmatic buys coming from digital buyers, Ströer is doing an amazing job in there. We're seeing a lot from the UK. Australia is starting to grow a lot. What I think is that the early adopter market, I would say maybe Germany, that's been doing it for a while, US, Canada, even though it was growing very fast, exponentially I would say, you need it to start somewhere.
Bruno Guerrero: The markets are now joining and starting to be more active. They will catch up very fast because technology has been built. There's a lot more players in terms of the platform that are now being made available and starting to support digital out-of-home. Markets like Australia, we're seeing certain growth there, are catching very rapidly to other markets that have been there for a few years. So we're seeing pretty much growth in multiple different countries.
Diane Carlson: Romulus, let me pose that same question to you. How do you see this rolling out? What's the adoption like globally?
Romulus Stoian: I think, Diane, we're fast followers. In DOOH we're fast followers, right? We like to see what's going on in an online and mobile space and then what problems they're facing and how can we adapt? How can we create value in digital out-of-home? So I think we're doing great. At the global level Diane, we see from Magna Global it's about 80% of out-of-home placements will become digital by 2022. 80% is an amazing number, so I think it's really achievable. If we can pave the way and we are building networks and we're creating the supply-side for the demand-side to connect brands with consumers.
Romulus Stoian: In terms of advancements in global out-of-home, I think the revenues in out-of-home are surpassing the print media. No doubt about that. We're overtaking the newspapers already, and I think we're talking about a great wave of disruptions in the next 10 year. I think this is going to be a reflection of the consumer attitude about media, speaking about millennials. It's very, very hard to target, so I think digital out-of-home being in-your-face and being targeting a captive audience on the go has the utmost advantage.
Romulus Stoian: So definitely we see the growth. We see about 12.6% annual growth from 2016. The trend is positive. I think, according to Allied market research, the DOOH market globally will reach about $8 billion by 2022, which is very, very positive.
Diane Carlson: Thank you Romulus. Well, it's really exciting to see all the growth in the industry. I personally started my career as a media buyer, so it's wonderful to see the progression and the ability to really be measurable and accountable, especially in this particular space. So we're at this new era of outdoor media.
Diane Carlson: Before we end our discussion today, I just wanted to pose one last question from me to you, to the panelists. What are your predictions for 2019? Do you see any specific trends you'd like to highlight for us? I know from my point of view, you're starting to see more and more penetration of digital in airports, in bus shelters, in train stations and the shopping malls, helping you navigate a space. And you're going to start, I think, seeing a lot more creativity and interactivity with the content that's on that screen and the passers-by, the viewers, the watchers that are engaging with the kiosks and displays. But I'm curious from your point of view, what do you see? What's your prediction? Bruno, let's start with you.
Bruno Guerrero: Good question. I think in 2018 what I have observed is a significant growth in companies that are playing a big role, tech companies, in mobile buying and display, digital display software and video analytics as a programmatic perspective. By 2018, so the end of 2018, I think most or if not all companies now started to play a certain role in digital out-of-home. Companies like all data companies, the PlaceIQ, the Qubix, the Place. The DSP as I was describing before, demand-side platform, MediaMath, Adform, The Trade Desk. The supply-side platform. Big guys like Rubicon connect to digital out-of-home. Nexus is talking about it.
Bruno Guerrero: So all these different tech platforms that have made what programmatic digital buying is today, are now into digital out-of-home. So we're starting 2019 like that. So I feel that by the end of 2019, if all these different tech platforms are investing more and more, it's going to grow even more than what it was in 2018 because having all the industry like that putting effort and seeing how we can bring more budget into digital out-of-home is going to grow pretty significant by 2019. So I look forward to see how by everybody together working on improving digital out-of-home programmatic buying, how it's going to look like at the end of 2019.
Diane Carlson: And Romulus, how about you? Any predictions?
Romulus Stoian: Definitely, yes. I like predictions. We're still at the beginning of the year, so we should be able to project something. I personally believe that the industry is growing, but it's not growing enough and I think what is the driving engine of this growth is what? Technology, development, innovation, 4G LTE. I think the industry must be adopted, and we have to grow where the growth is. I think we're talking about 2019 as a year when companies will be adopting programmatic more. From a $100 million industry in the US I think we're going to go into a $150 million space. It's going to be a robust organic growth.
Romulus Stoian: I personally believe that the quality of video content is going to be in high demand. High G LTEs will engage, will drive high quality video on-demand. Also, I believe that brands will develop a more creative content. More targeted to DOOH. That the content is going to be used in more contextual relevance. It's going to be more integrated with mobile devices, so we can extend the reach of an advertising campaign from a billboard to a mobile device. Since we're talking about 99% of the smartphone users which are interacting with their phones in any given week.
Romulus Stoian: In terms of content, I think rule-based content managers will be the new trend. I think companies will be using additional data sources, will be managing data sources into a cloud that can create meaningful outcomes and synergies between beacons, WiFi, mobile device IDs, camera intelligence. And I think this conglomerate of data sources can be put into a context where brands are getting the benefits, are getting the transparency. We see the object. We see the conversion rates in purchase and engagement.
Romulus Stoian: And also, I want to say that advancement in machine learnings I think is going to be very important. I think we're going to see that in content automation. Since machine learning learns from consumer interaction, I think artificial intelligence will play a very, very pivotal role in out-of-home advertising. So we can respond in real time to consumer habits based on what captures, what we can capture from the inputs.
Diane Carlson: Romulus, Bruno, thank you so much. This ends the formal panel discussion, but now I'd like to turn it over to John, who's going to kick off our Q&A. So we've been getting questions from our attendees, and John, off to you.
John Bertoli: Thanks, Diane, and excellent job Romulus and Bruno. We've had a few questions come through during the course of the webinar and audience members, continue to submit your questions and we'll try to address them in a timely manner.
John Bertoli: First question: is DOOH a viable option outside of cities, to reach people outside of large metro areas?
Bruno Guerrero: This is Bruno, let me answer that, thank you. I feel yes, possibly yes more and more. And the reason for that is traditionally, out-of-home - digital out-of-home or out-of-home - has been bought by picking a location where there could be a lot of traffic passing in front, which is mainly happening at downtown, biggest locations where there's a lot of traffic. But now, using data, understanding movement pattern, there's a possibility to target an audience. And not just picking the locations, but delivering an ad to the audience that's in front of the screens.
Bruno Guerrero: The same way as web buying is being done. You don't need to pick what website you want to be in. As much as the audience that is surfing on the webpage is the person you want to deliver that, then this is the person you're buying. So by doing that, I think that's going to open up some locations in a market that are more difficult to buy or to sell the traditional way. And I'm going to give you an example.
Bruno Guerrero: A coffee shop being downtown and close to different business offices. Most of the people that are going there are probably not living close to the coffee shop. So traditionally an advertiser would take two or three different screens that could be close to the coffee shop so that somebody walking close to it will see that ad and then might just walk into the coffee shop.
Bruno Guerrero: But with audience, with letting the buyers to set budget and select a specific market, and let the platform optimize the delivery to that specific audience, by understanding where those coffee shoppers are coming from, then probably the data will say that in the morning before going to work, the audience might be 20-30 kilometers from the coffee place. During the weekend, or at night, those people will not stay at work. So that might be better to deliver the ad before that person goes to work or during the weekend, then delivering continuously, delivering close to the coffee shop. So I think location data is allowing this, is allowing to deliver ads against an audience, and the audience is not always where you think it could be. And so that might open up different types of inventories that are further away, where there's a lot of traffic but still they're traffic that is very important for the buyer, and then the buyer will start paying only for specific, selected audience he wants to reach, even though it's far away from the big streets.
John Bertoli: Great, thanks Bruno. The next question that came through is what verticals have you seen that are more receptive to digital out-of-home ad buying and selling?
Romulus Stoian: I can take that, John. Thank you very much.
Romulus Stoian: Well, traditionally speaking, out-of-home connects brands with consumers, right? So the most important segments of the market which are spending the most money, according to Advertising Age, for example, is CPGs. I think CPG is going to continue to spend more money, more smart, more intelligent. They're looking at conversion rates, they're looking at activations. They are looking very carefully at what's the return of investment. So I see the CPG, I see financial, I see automotive. I see telecoms continuing to advance. Definitely I see electronics. I see untraditional segments like social media companies continuing to spend money in digital out-of-home.
Romulus Stoian: And pretty much everyone that can create value in the media by having out-of-home as a main support for optimization or for creating brand awareness and top-of-mind awareness where you can buy a product. So definitely I see a growth, and I personally believe that we're going to bet on CPGs as much as we can.
John Bertoli: Great, thanks Romulus. Do you see an opportunity for greater transparency in the industry because of programmatic buying?
Romulus Stoian: Let me answer that, thank you John. Yes, I see programmatic helping a lot with transparency in digital out-of-home. I'm all in favor of transparency and just programmatic on its own, for other digital channels, there's a lot of effort being spent in the industry from a supply-side perspective and from a buy-side perspective, for more transparency. Because there's a lot of fraud that's been happening, and different other reasons. So by getting more budget being spent programmatically on digital out-of-home, we can leverage all the different technology. All the different specs, standards that have been built for programmatic execution on other channels.
Romulus Stoian: There have been a lot of problems where buyers, they're having issues with the feed because with programmatic buying on other channels, when an ad is being made available to be bought programmatically, there's a supply-side platform fee, there's an exchange fee, there is a data fee, there is a DSP fee. And this is very not transparent for buyers, so right now there's a lot of effort just in general in programmatic to understand how can we be more transparent to see. Maybe we can understand what they're doing and then for digital out-of-home to start, we can follow certain a certain kind of pattern, certain implementations that they're doing and reproduce them with out-of-home.
Romulus Stoian: Another thing, there's right now, because there was a lot of inventory being made available to buyers from fraud websites. That they were saying that there were different types of websites, and buyers were delivering ads on fraud websites. So there's kind of been work there. There's kind of been work there. There's kind of a little flaw. They call it ads.txd, which is kind of certifying that media owners supply the publishers that are buying what platform can represent their inventory. So that is, when the buyer is buying, if it's not done through one of the platforms that they have accepted and certified, it means fraud.
Romulus Stoian: So all these little things are done here and there to get more transparency. I think with programmatic digital out-of-home we can understand what's being done and lever it, and try to copy some of what's being done on the other side. It's going to help a lot for transparency in out-of-home.
John Bertoli: Okay, great response Bruno. Last question we're going to take for this webinar: in terms of managing risk on digital out-of-home, what insight can you provide around best practices?
Romulus Stoian: I'll take that, John. I'll take that question. So definitely media publishers, they rely on advertising revenue. This is the return of investment from using networks. So I think in 2019 and beyond, digital networks, they have to keep an eye on digital signage remote management, on inventory management, network operating centers, are playing an important role.
Romulus Stoian: We want to be able to have an industry that is fully transparent and running at 100%, but it's difficult because you rely on many, many things. You rely on the screens, you rely on internet, and you rely on many things. So I think what I will recommend is to increase the monitoring systems. Invest more in technology to be able to have a proof of play. Because at the end of the day, proof of play is paying the bills. It's paying the campaign, so having the more accurate way of keeping an eye on your networks and having a quick response like a next-day break fix, having those kind of plans and programs in place will definitely help out-of-home advertising and DOOH in general becoming more responsive.
Romulus Stoian: One of the biggest challenges that the industry had during the years was not being able to fix the problems in time, so the industry was facing lots of issues like paying back credits up to 20% so I think 2019 and beyond is when we have to really keep an eye and make this remote monitoring and next-day break fix more like a process.
John Bertoli: Great, thank you everyone and we hope you found this webinar educational. We will be addressing any questions that we couldn't get to on the webinar, and we will be sharing the on-demand version of the webinar later this afternoon. In addition, our next webinar will be in the late March time frame, and that will be around wayfinding and digital out-of-home advertising, specifically for convention centers, malls, and other types of venues. So we hope you can join us for that webinar as well, and enjoy the rest of your day.