In the run-up to next week’s Digital Signage Expo in Las Vegas, there has been a lot of great news and press. Earlier last week, Adrian Cotterill at DailyDOOH and Ken Goldberg at Real Digital Media’s Digital Signage Blog shared their thoughts on the death of DOOH Aggregator SeeSaw Networks and the challenges facing its remaining peers.
Both of these posts are mandatory reading for anyone involved in DOOH, outdoor advertising, or ad-tech!
SeeSaw’s insolvency is a shot across the bow for DOOH; either take full advantage of your network assets or someone else will do it for you.
Digital Out-of-Home (DOOH) network operators secure rights with real estate or venue owners, build out and maintain networks of screens, and sell advertising space. In exchange for the right to sell the advertising space, they usually split the revenues from the advertising with the real estate or venue owner. Advertisers and agencies then use the networks to target specific venues (e.g., health clubs, convenience stores, cafes) and specific demographics (e.g., gender, age, etc.).
Aggregators were conceived in order to help advertisers plan and execute campaigns across multiple targeted and niche networks. At their simplest, aggregators operate similar to online display networks – pushing the same message (or creative) to all of the advertiser’s target demos. It sounds great in theory, but in practice aggregators face a lot of organizational challenges.
In his piece, Ken Goldberg asserts that aggregators are hobbled by a fragmented infrastructure. Without a standardized and interchangeable platform to manage and run DOOH, aggregators and niche networks can’t compete with their more integrated peers. Spot on Ken! The aggregation of ‘anything’ is useless if there is no technology in place to efficiently navigate it. There are tons of options when planning a DOOH campaign (e.g., video, audio, static, screen size, with or without premium editorial content, frequency, traffic, etc.). The sheer volume of options make aggregation nearly impossible to quantify and sell on a uniform basis.
Furthermore, the interests of aggregators and operators are not aligned. Operators often have their own sales force working with agencies to achieve campaign goals, while aggregators are focused primarily on deal size (i.e., selling the largest possible package of impressions). This creates friction in the relationship and often leads to aggregators selling remnant rather than premium inventory.
Adrian’s DailyDOOH post notes that agencies are looking for a solution rather than a product. According to Mr. Cotterill, aggregators must “change their business model so that they can handle the whole campaign process.” Again, I wholeheartedly agree. Since entering the OOH space, we’ve noticed that agencies are looking for partners who can work with them from start to finish- not just on one part of a project. For DOOH, this means targeting the right audiences, gaining access to comprehensive coverage, executing the buy, and providing an accurate proof of performance.
Marketers and agencies don’t buy time slots or network coverage. They buy specific sets of eyeballs and the opportunity to influence them. Savvy planners want a real ROI on every dollar they spend – especially since media buying is no longer a cash cow business. Large integrated networks can do this – aggregators can’t.
DOOH is the fastest growing segment in advertising, and for networks/aggregators that are struggling to grow, the sharks are circling. Even before last year’s Strategy Institute’s Digital Signage Investor Conference, a top tier of consolidators (RMG, Outcast, and Zoom Media) were strategically acquiring and integrating a wide range of niche networks. This top tier is rolling up networks that allow them to offer more targeting to a wider geographic footprint. Size and reach are a media planner’s equivalent of beauty and brains! And as if that weren’t enough, investors are eagerly eyeing this sector too.
Why? Because the value of small DOOH networks is actually greater in the hands of a larger, more integrated network that is already covering adjacent demographics and markets. They can sell it, operate it, and monetise it better than a smaller, less integrated network. This is backwards integration – savvy network operators are cutting out ‘order suppliers’ and doing the aggregation themselves, thereby eliminating organizational and misalignment challenges.
Here’s the bottom line: there is money in a well-run network that offers multiple targeting opportunities, but anything less capable will inevitably be rolled up or liquidated. Aggregators and operators can’t entirely count on innovative technology or exclusive real estate rights – nothing lasts forever. There are two options for small DOOH networks: grow faster or align with someone who can.
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