NEW YORK, NY — Place-based digital advertising networks are increasingly attracting attention from advertisers and agencies because of their unique ability to reach on-the-go consumers, but planning and buying digital out-of-home media have become a complicated process. One of the primary issues facing our industry is finding a way to make it easy for brands and their agencies to access, plan, and buy advertising on digital placed-based networks. Fortunately, there are several companies and organizations working on solving this problem.
When we think about digital out-of-home, we need to recognize that it's more than just a technology, it's an emerging media channel. As one might expect with any new channel, there are issues that need to be solved in order for the medium to grow and become mainstream. Solving the planning and buying process for digital out-of-home media is a pivotal issue. Without a viable solution, this industry will be stuck in neutral, so two things need to happen. Advertisers and their agencies need to trust the metrics and gain confidence in the medium and the industry needs to facilitate the buying process by creating a true marketplace.
Advertisers are always looking for more efficient ways to reach consumers, and place-based digital media is in a unique position to leverage the convergence of location-based targeting, mobile marketing, and social media. Place-based digital advertising provides advertisers with the significant advantage of being able to deliver messages at a hyper-local level by demographic, geography, or venue, and it also provides a level of granularity that is difficult to match with any other medium. Advertising agencies are beginning to take notice.
"To meet client needs, advertising and media professionals are learning more about different media. Instead of being television-centric, they really need to understand the strengths and weaknesses of multiple media channels and how each of these channels can deliver a message for their clients," said Laura Brooks, Client Activation Director at DOmedia. "Media channels are converging, which means the old silos don't really apply. Television is now interactive, out-of-home is now digital. As we move down this path, the focus will shift from individual media channels to be more about the mindset of the consumer in different environments. The key is to leverage each vehicle at your disposal to deliver your message as effectively as possible, wherever the consumer is."
Companies are coming at this problem from all angles with offerings that include comprehensive online media planning and buying platforms to network aggregation services and consulting as well as media measurement and analytic services that provide data that supplement proprietary media planning and purchasing systems. In the last 18 months the digital out-of-home industry has seen the introduction of four Web-based media planning and purchasing systems. These include NEC's VukuNet, rVue's Ad Exchange, and Digital Advertising Technologies' Entourage. Cisco is also taking a closer look at this market, and is said to be developing its own ad-based solution for future release.
Open Web-based systems have the potential to revolutionize the digital out-of-home industry. One parallel that our industry can draw from was the introduction of the Sabre system in the 1960s. Shortly after its introduction, Sabre completely changed the way the travel industry operated.
The introduction of media-buying platforms for place-based media changes the equation for network operators by opening up new revenue streams from local advertisers, and advertising budgets that might have been too small in the past begin to make sense. A series of small ad buys combined can begin to add up to real dollars for networks. In addition, the new platforms have the potential to unify a fragmented landscape of networks into a cohesive marketplace.
Online media planning and buying platforms come in two flavors—ad networks and ad exchanges. The ad exchange model provides a marketplace that enables direct interaction between buyers and sellers for a transaction fee. An ad network functions similarly to an exchange, but with a subtle difference. Ad networks aggregate network inventory and then act as a reseller, potentially taking a larger percentage of each transaction. While both models create a market for digital placed-based media, there are differences of opinion on which model best serves the industry. Let's take a look at ad exchange platforms first.
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