Future of Offline Media: Selling it Programmatically
A McKinsey report on The State of Global Media Spending projects CAGR for Digital Advertising from 2014 through to 2019 to be at 12.7%. That is the fastest growing medium. Print media such as Newspapers and Magazines are declining. TV is projected to grow at 5%, closer to the overall global media spend growth at 5.1%.
The promise of digital has always hinged around measurability. However, often times, it is not appreciated enough that bulk of digital spends have come from start-ups, SMEs and a long-tail of advertisers, who find it prohibitive to buy TV and other offline media. Cost of production of a Search or Display Ad is negligible relative to a Video or TV ad. Platforms such as Adwords have led the way in making digital advertising accessible to everyone at a low budget. As and when SMEs start seeing success and results, they scale spends.
Making media buying available programmatically enables offline media to access long tail advertisers and compete in this segment with other forms of digital media. Of course, it is not a trivial task to make offline media compatible with programmatic buying. It entails heavy investment in the technical infrastructure required to make it work. Let’s take out of home for example — imagine all buses, subway trains and stations and street displays all converted to digital screens and plugged in to high bandwidth internet to be able to deliver high quality ads with low latency to preserve customer experience. A coffee shop located near a particular station would be able to buy ads on every train arriving at the station, during the shop’s operating hours, without having to ever speak to anyone, at a price that they know is competitive. Countries such as Singapore and Hong Kong can lead the way, with a robust connectivity infrastructure.
Programmatic TV likely to be a reality faster than Out of Home. Companies such as Google have already laid out the roadmap for how the industry would evolve. An emarketer article earlier this year mentioned that about 15% of US senior ad buyers reported using programmatic for TV buys. This number is likely to increase significantly over time.
It seems to me there is a strong enough business case for offline media owners to invest in pilots and tests to enable programmatic access to their media. As a performance marketer for an ecommerce company, the key gripe I have with TV is measurability of impact on conversions. The key to any digital marketer’s success is optimization and constant testing. If the cost of testing is high it is difficult to make the medium a success for data driven advertisers. Programmatic access to TV and offline inventory makes it possible for us and numerous SMEs to test and attempt to make the channel work on a performance basis. If it does, the medium will grow dramatically and faster than what the McKinsey report suggests.
The article first appeared on Digital Market Asia here.