At first glance, digital out-of-home (DOOH) and connected TV (CTV) advertising may seem to have little in common. But their combined resilience in a generally depressed digital ad market — spending in both categories jumped by more than 25% last year — tells a deeper story about how today’s marketers are adapting to changing consumer behavior in a cookie-less, multi-device world.
These two media channels are surging at a time when marketers are looking for new ways to connect with consumers in the post-COVID-19 pandemic era, and to fill gaps in ad tracking and measurement created by the removal of identifiers (including third-party cookies) from the system.
Digital outdoor ads, while by no means new, can leverage video and other technologies to create opportunities for data-driven marketing that do not exist for a static billboard. “Traditional outdoor ads are not super targetable or measurable, or affordable at scale. No one buys 200 markets of billboards,” says Sean McCaffrey, CEO of GSTV, which operates a video network at 28,000 convenience store fueling stations across the U.S. “We don’t sit on a large first-party data set akin to a large grocer, but there is a lot of data that brands and agencies already have to apply across our platform.”
McCaffrey says that marketers are shifting more dollars into DOOH from both legacy TV budgets and digital video. The latter category has suffered from ongoing concerns about quality of supply, including brand safety, fraud and measurement reliability. And he says marketers are increasingly thinking of outlets like GSTV as an audience-based, not just location-based, platform.
“Each fueling station is like an addressable household,” says McCaffrey. “The Upper Peninsula in Michigan in summer is a much different experience and audience than in January, because you have people going to their lake houses Thursday through Sunday and the population swells. Both are valuable, but how you want to target and who is different. Both the commercial time and content can be localized at a station level.”
CTV, meanwhile, is an inherently addressable medium that allows advertisers to deliver their messages to particular segments within the growing number of U.S. households that are choosing internet-based streaming services over linear TV. These are increasingly young and diverse incremental audiences that marketers cannot reach with traditional broadcast and cable TV alone.
Market projections for both categories reflect these trends. The approximately $20 billion global CTV ad market is expected to double by 2026 and account for 40% of TV advertising, according to eMarketer. In the U.S., DOOH spending is expected to rise from $17.8 billion in 2023 to $21.6 billion by 2027, according to Statista.
Retail Media and Connected TV
The last few years have seen a growing synergy between retail media and CTV. The rich first-party data sets generated by major retailer ad platforms add another layer of granularity to the CTV medium. Users must log in with their emails to access streaming services, and those authenticated user IDs allow marketers to deliver ads to households with a particular set of behaviors (versus legacy TV, which is bought against broad-based demographics). Now, with retailer data, a food marketer can more precisely target yoga enthusiasts who prefer healthier breakfast options and who bought plant-based dairy substitute products in the past six weeks.
“When you marry those authenticated users with retail data that is based on either transactions or loyalty card data, you’re able to get that one-to-one opportunity to find the exact people who are purchasing your product or who you want to purchase your product,” says Ellen Mulryan, senior director of retail data partnerships at The Trade Desk.
Brands can then use that same retailer data to help determine if exposure to the ad helped drive a sale. “What we do then is capture an anonymous ID that is a tie to that ad exposure,” explains Michael Greene, senior vice president of global vertical strategy at Criteo, whose platform powers advertising across both retail media and CTV. “Then we’ll go back and look at all the anonymous identifiers that are tied to transactions at our retail partners, and the products that were bought at those retailers, and say, ‘Did we find a match? Did the person who saw that ad for a diet soda then go buy a diet soda at Costco?’”
Such closed-loop measurement of CTV campaigns may further increase the channel’s appeal. A survey by eMarketer conducted in September 2022 found that higher-quality targeting data (47%) and more efficient buying/planning process (36%) were the top reasons cited by marketers to increase CTV ad spending, followed by efficiency frequency capping and transparent measurement (both 30%).
Indeed, CPG marketers in diverse categories — from petcare to skincare — are increasingly extending traditional campaigns into CTV. Last August, pet food manufacturer Stella & Chewy’s introduced its first national ad campaign, “All You Need Is Raw,” which included both cable TV and CTV spots as part of a sweeping omnichannel effort.
In early 2022, Neutrogena used Kroger’s customer purchase data for a two-month CTV campaign on Roku that targeted light or lapsed current buyers of the brand, as well as cleansing product category buyers that were new to the brand. The campaign achieved an 8% uplift in household penetration and a 5.5% increase in sales, according to the skincare company. Additionally, streamers exposed to the video ad spent 4.2 times more on Neutrogena makeup remover wipes than the average Kroger household.
“Retail media creates more accountability for CTV. It makes a historically upper-funnel channel much more lower funnel,” says Sarah Scherer, director of self-serve offsite media at Kroger Precision Marketing (KPM), the retail media arm of Kroger’s 84.51 data science and loyalty subsidiary. “It’s a lot easier to explain to your CMO why you’re investing dollars in upper-funnel channels when you can connect the impact of ads to real business outcomes.”
More Access Points, Rise of Self-Service
Building on its 3-year-old partnership with Roku to activate advertising across hundreds of ad-supported channels on Roku’s streaming platform, KPM has expanded its private programmatic marketplace, introduced in 2021, to include video and connected TV inventory through integrations with suppliers such as Magnite, OpenX, PubMatic and Xandr.
“CTV is a complex space that has evolved quite a bit in the last two years. We’re expanding access points and adding other ways in,” says Brian Spencer, marketing director at KPM. “We’ve learned that a lot of what works in programmatic also needs to be true in CTV. It’s not just going in and purchasing one particular audience segment, but buying multiple segments and optimizing — but optimizing with better data.”
CTV has also given rise to a growing number of self-serve options from retailer ad platforms and demand-side platforms (DSPs) like The Trade Desk. “That’s the big change with CTV,” notes Mulryan. “Retailers have now decided that they’re comfortable putting their data out into the marketplace for advertisers to decide how they want to use it.”
Historically, most retail media fell under managed service, meaning that retailers were getting the insertion orders from brands and actively running the campaigns. “My team is more focused on self-service, and that would be Kroger or any other retailer making data available in The Trade Desk’s marketplace so that brands can run those campaigns,” explains Mulryan. “It’s the marketer’s own hands on the keyboard, analyzing the reporting data and optimizing ads.”
Because CTV is a fragmented market with a proliferation of streaming services, supply path optimization can be a challenge. There are a multitude of ways to buy and sell CTV ads. Marketers must decide whether to buy directly from a platform or publisher (i.e., a device maker or content provider) that owns the inventory, or to purchase ads programmatically through an open exchange.
“Sometimes it’s better to have direct relationships with [publishers] where you can get better inventory and [ad rank] quality thresholds negotiated on the front end,” says Scherer. “Programmatic is great for reach, scale and efficiency, whereas these higher-quality premium publisher relationships are good for upper-funnel plays. I see them working together.”
Testing, Testing
Both DOOH and CTV mediums give marketers the ability to switch up creative during the course of a campaign and optimize ads in real time. For digital outdoor ads, marketers must comply with local sign codes, which vary in different markets, when determining the frequency of rotation.
“The number of spots and length would differ greatly in a location like Times Square [New York] versus a roadside digital billboard on a highway,” says Andrew Marcus, senior vice president of research and insights at Clear Channel Outdoor. “Some clients will change the creative based on the outside temperature, pollen count or local traffic conditions. If there is heavy congestion on the roadway of the digital display, it may be an opportunity to play different creative with more messaging versus a situation when the dwell time is shorter.”
In the case of CTV, Criteo’s Greene says that brands are starting to understand how to optimize content and leverage the tools they’ve built around linear TV in the more addressable TV environment.
“What we see from a lot of the smarter brands is, when they start campaigns, they start with really broad targeting strategies,” he says. “We’re talking dozens upon dozens of different segments, and they’re constantly testing and controlling these to understand which are working and which are not, and then orienting spend toward those that are working. In other words, refining audiences that you target for the purposes of driving more product sales.”
For CTV advertisers, maintaining a privacy-first approach is a vital component of any strategy in a cookie-less environment. KPM’s Spencer emphasizes that, even as Kroger continues to expand entry points into CTV, its data science teams maintain strict control over the company’s shopper data. “There’s no actual data that’s going from our platform to another. There’s just an identifier for one particular use case and one particular campaign that’s very specific to how it’s going to be activated,” he says. “So it allows us to identify those right households for the campaign, but no one is able to apply that data anywhere else or for any other purposes.”
Spencer has some parting advice for marketers as they look to increase their CTV footprint. “Recognize that CTV is a unique marketing discipline and you do need expertise,” he says. “The self-service tools and platforms that we’ve built out are for teams that are in this space every day. For most of our brand clients, it’s about working with your agency media buying team. We’re working with agency programmatic partners who are the real experts here.”
Just Egg: A DOOH Case Study
The egg industry lately has had a lot of, well, egg on its face. But for San Francisco-based Eat Just, makers of plant-based egg and meat alternative products including the Just Egg brand, the recent sky-high prices, product shortages and concerns about bird flu facing U.S. egg manufacturers proved to be too good of an opening to pass up.
For one week in the middle of January, Just Egg ran an outdoor ad campaign on the digital screens of 820 charging stations in 21 markets across the Volta Media Network. This was primarily an awareness campaign for the relatively young brand, although strategic placement of the ads right near grocery stores also allowed Just Egg to influence shoppers’ choices with zingers like “Just Egg is in stock” and “Plants don’t get the flu.”
“When you have something like this egg shortage issue that is topical and timely, it’s a huge advantage for us to be able to very quickly get our placements up in front of 800 stores in two days,” says Tom Rossmeissl, head of global marketing at Eat Just Inc. “Most importantly, the platform allowed us to target at the store level, reaching not just EV drivers but all consumers walking between the parking lot and the store entrance.”
During the one-week period, the campaign sponsored more than 2,500 EV charging sessions and generated 9 million impressions across the 820 charging stations, according to Rossmeissl. He says the company will be conducting a sales-lift analysis using store-level sales data to gauge the ads’ impact at retail.
