How Does Digital Out of the Home (DOOH) Advertising Work?

You’ve heard of Digital Out of the Home advertising but maybe aren’t yet sure how to make it work for your business. This article explains what you need to know to start using DOOH advertising to your business’s advantage.

Programmatic Advertising

With traditional Out of the Home (OOH) advertising, you could purchase ad space that viewers would see “out of the home.” Highway billboards, outdoor benches, and public transit waiting areas are all great examples of good old-fashioned OOH advertising.

Digital Out of the Home Advertising is part of a new way of promoting your business called programmatic advertising that is rapidly reshaping the nature of advertising everywhere. Programmatic advertising replaces the traditional process of buying and selling ads with an automatic, artificial intelligence-based system. Instead of relying on individual, manual transactions, you can now buy digital ads automatically, making the process much more efficient and more effective for your business.

In 2020, programmatic ad spend is estimated to get up to $98 billion and account for about 68% of the world’s digital media ad expenditure. Digital marketers expect most ad sales to soon convert to programmatic advertising as artificial intelligence continues to develop and expand and consumer data becomes more widely available. Automatic, data-based advertising seems to be the wave of the future.

DOOH advertising applies the power of programmatic advertising to digital outdoor ads. Instead of purchasing ad space on a bench or on a billboard and hoping the right people stumble across it, your ads can work in real-time, rapidly readjusting to variables like time of day, weather conditions, and passerby demographics.

DOOH advertising is data-driven. Automated, AI-based platforms calculate the best audience for your ads and then precisely target that audience using sophisticated data-processing technology. Your ads will more easily reach the exact viewers who will engage with them the most. But DOOH advertising also responds to other environmental variables. Different times of the day or of the week can display different ads; different venues can display different ads depending on the behavioral data associated with the people in each venue.

Another appealing feature of DOOH advertising is its prominence, as opposed to the more traditional route. Unlike web-based ads where users can use ad-blockers or quickly close out of them, dynamic public transit ads display continuously. They are perfectly suited for different out-of-the-home occasions—including airports, malls, bus stop shelters, billboards, and public transit systems. While users have been increasingly reluctant to engage with online ads, DOOH ads offer viewers a refreshing supply of engaging content as they go about their daily lives.

In contrast to the slow, manual nature of traditional advertising, programmatic advertising is multi-pronged, relying on multiple streams of data to swiftly adjust to real-world conditions. Targeting capabilities include demographic and behavioral targeting to more precisely define and reach your ideal audience. Using geofencing, geo locations, and IP zone data, programmatic ads can also target specific geographic areas.

Advertisers can use this data in real-time to narrow target audiences and then retarget them. Instead of seeing a billboard once and then riding off without ever viewing it again, geofencing allows you to define a certain virtual border and then send push notifications or display geographically relevant ads to viewers in that area. Geofencing harnesses the power of geolocation services to target areas that might feature consumers who are more likely to engage with your business. Then, it not only displays relevant DOOH ads but also follows up to engage viewers on their personal mobile devices.

Businesses have been catching on to the power of DOOH advertising, meaning we are quickly approaching a world where nearly all outdoor ads display dynamically, in real-time, reorganizing based on the data they are constantly processing to achieve the best results for your business.

Programmatic Ad Buying

Just like with any ad purchasing platform, you set your budget ahead of time and identify the ideal target audience for your business’s ads. You can then upload your creative ads to be widely displayed. In this streamlined version of ad sales, however, your individual purchasing transactions are replaced with an automated system, often an AI-based bidding process. One of the most common methods for advertisers to purchase programmatic ad space is called Real-Time Bidding (RTB), which amounts to about 90% of all programmatic ad buying.

Purchasing ads through RTB is an automated process, meaning that once you pre-program your budget and your target audience into the advertising system, you don’t have to worry about price negotiations or interactions with publishers. An auction spontaneously occurs among all the interested potential advertisers anywhere there is programmatic ad space available—for example, DOOH ads on a billboard or at a bus stop shelter or ads on web pages. Digital experts can help you secure programmatic ad space in a variety of formats, including major search engines like Google and Bing.

Since each business’s information is already pre-programmed into the AI-based system, all the advertisers automatically bid to fill the ad space with one of their ads based on their budget and the relevance of that particular audience and environment. Just as with any auction, the highest bidder wins, and their ad is automatically displayed once the page loads. The entire auction takes only milliseconds and can therefore rapidly adjust to a variety of market conditions.

The pre-programmed nature of this automated process is how programmatic ads got their name. In other words, after all your business’s information has been programmed, the process is executed entirely by artificial intelligence with access to large amounts of relevant consumer data. No more negotiating with individual publishers and hoping people see your ad. With programmatic ad buying, your ad can now be projected anywhere and to spaces with plenty of real-world or digital traffic where viewers will be sure to see it.

Programmatic Advertising Platforms

In an effort to further optimize the ad buying process, there are two main platforms driving programmatic advertising: Demand Side Platform (DSP) and Supply Side Platform (SSP). Each platform works on behalf of a party involved in these instantaneous transactions.

A DSP is a platform for advertisers who are seeking to buy programmatic ad space. It is an automated platform that allows advertisers to purchase the most meaningful ad space available to them based on their target audience and other factors which influence the relevance of a DOOH ad or an ad on a particular web page. A DSP manages this data and streamlines the ad-buying process for advertisers, automatically working on their behalf during transactions to find the lowest cost solution that still wins the RTB auction.

Through a DSP you can easily establish your budget, adjust your ads to the demands of your target audience, and ensure that you’re only bidding for relevant ad space. It will also allow you to advertise widely, across a variety of web pages and DOOH physical spaces.

Meanwhile, an SSP serves the publishers and media owners who are looking to sell ad space to potential advertisers. This platform ensures that the publishers seeking to sell ad space are protected from excessively low bids and can organize their own advertising space inventory to more easily sell it to advertisers. SSPs ensure that all available ad space is filled, minimizing human error and the delay of human negotiation.

DSPs and SSPs are both vital parts of the programmatic ad buying process. Essentially, they each automatically work on behalf of the parties involved to complete transactions that independently optimize results for both of them. Since these platforms are automated, you only need to program the needed information about your budget and your business and then make adjustments according to the resulting data to narrow your audience or fine-tune your ads. The advanced artificial intelligence embedded in the DSP will instantly bid for you in the digital ad marketplace.

To manage and analyze the large amounts of data filtering through this system, there is another important platform called the Data Management Platform (DMP). A DMP stores and makes sense of important consumer data, such as consumer demographics, interests, and commercial patterns. It then communicates with the DSP to both target the best audience for your ads and later optimize your ads based on the resulting data it receives. These three individual platforms (DSPs, SSP, and DMPs) then work together to seamlessly coordinate programmatic ad sales, meaning buying and perfecting ads for your business has never been easier.  

Programmatic advertising harnesses the power of data to successfully meet the advertising demands of your business. With advanced consumer data retrieving methods, your ad will not only be sure to reach potential consumers but will be reaching the exact audiences most likely to engage with it. The automation relieves you from the burden of independently contacting publishers and media owners but still allows your business to spread its message broadly. Meanwhile, artificial intelligence optimizes the ad purchasing process, so your ads always have the highest chance of success.

Programmatic advertising uses advanced technology and impressive data processing to help your business get the most out of its ads. Vivid, dynamic DOOH ads are rapidly replacing traditional, static ones. To give your business the best chance of advertising success, you’ll want to consider leaning into the future of DOOH advertising to get your business out in the open and in front of the right people.