How Out-of-Home Advertising Increases Lifetime Customer Value (LTV)

The consumer advertising space is the most saturated it’s ever been.

Take the category of mattresses, for example.

Think of how many brands are competing for the same budgets.

People don’t buy mattresses often—and there’s a similar trend in the auto industry.

Let’s say that your brand sells a product that a shopper needs to buy often—like bread, for instance. Chances are, the people you’re reaching are going to develop a preference for the products that they buy.

According to one study from Yotpo, an eCommerce platform that specializes in creating visual experiences, 90% of consumers report being brand-loyal.

“Survey respondents themselves defined loyalty in the context of repeat purchase behavior,” writes Greg Sterling, contributing editor at Search Engine Land. “Nearly 80 percent of these consumers said that it took at least three purchases for them to consider themselves loyal. And 37 percent said they weren’t loyal until they had made at least five purchases.”

The top factor driving loyalty is product quality. People want to make sure that they’re investing their hard-earned dollars on the best that their budgets will give them.

“Loyalty inspires consumers to take further actions, such as joining loyalty programs and spending more money with the brand, according to the survey. Loyal customers are also more likely to leave reviews.”

Loyalty also creates a ripple effect in the form of word-of-mouth and social media. Brands need to invest in earning it—and when they do, the payoff comes in the form of higher customer lifetime values.

How out of home fits into this picture

Out of home is an untapped channel for brands to make a strong impression in their consumers’ minds—to encourage repeat purchases, create positive brand sentiment, and share reminders about a product’s value proposition. Billboards, transit ads, digital displays in hotel elevators, bus stops, and buildings are valuable spaces to capture attention on an ongoing basis.

“Marketing technology is beginning to play a much greater role across all media,” explains Daniel Mori, VP of Marketing at Spark Networks—who previously ran out of home (OOH) advertising campaigns while working for a direct to consumer life insurance startup.

“Whether you’re buying direct mail, radio, social media—or anything else—you’re trying to reach the same audiences, regardless of medium. Life insurance purchases, for instance, are very informed. In order for consumers to trust you, you need to ensure that you have their backs if the unthinkable happens.”

For Mori and Ethos, Out of Home was a channel to explain what its brand stands for and how customers will get the most value working with us.

Right now, Ethos only sells one product, which is term life insurance. The path to increasing customer lifetime value means purchasing more insurance products for more family members—and staying close to updates, for instance, if the company were to ever release new products.

The key point is that out of home campaigns create brand recognition, which helps lead customers to higher LTVs—through word of mouth, memorability, and brand loyalty.

“There are brands out there that are well known,” says Mori. “They’ve been around for years, and they illicit trust, just on account of history. An early stage startup with a good product but no brand recognition, we decided that anything that could help us activate brand awareness was valuable. Out of home was the medium that we found effective to do that because it allowed us to deliver clear visuals that were impactful—and intercept people during their daily lives.”

Above all, Mori and his team viewed out of home as a channel that brought additional value to other marketing and advertising pathways for the company. In other words, a strong brand presence has a ripple effect in translating back to LTV. Especially for a purchase like term life insurance, consumers need to make sure that they’re purchasing a product with integrity.

"Our hypothesis was that increasing brand awareness would potentially help us lift the performance of every other channel,” Mori says.

Out of home makes LTV more measurable

One of the hesitations that marketers have had to invest in out of home campaigns is a perceived lack of being able to measure campaigns. There’s a misconception that out of home isn’t measurable. But here’s the thing. Just because you can’t see something, doesn’t mean that it isn’t happening. Not to mention, last-click attribution data can make the ROI of digital channels seem misleading.

To measure how customers and prospects think and feel about advertising, marketers need to build a holistic perspective. They need to be able to demonstrate results, in the form of a clear story that ties back to a company’s core growth goals.

One way that AdQuick addresses this need is by allowing a capability for advertisers to build attribution models for unique out of home campaigns. For instance, AdQuick can help marketers track whether someone downloaded an app, visited a website, went to a store, or took an action due to being within the radius of an out of home placement. AdQuick integrates with various data partners to connect out of home campaigns with mobile device IDs, helping to create a holistic audience picture. Statistics make it possible to identify specific customers.

This perspective enables teams of marketers to be able to quantify the direct lift of a specific campaign. In addition, marketers can see, over time, what percentage of its out of home audiences become customers with the highest LTVs.

Out of home, with a strategic mobile strategy, gives marketers a unique perspective of how their customers’ online and offline experiences converge into a clear picture. For that reason, out of home marketing has the potential to make a company’s measurement program more precise.

Out of home makes mass-marketing more efficient

The value of your ad campaign, whether online or offline, is only as compelling as the message that you deliver—and the offer that you promise. Consumers are so accustomed to distrusting brands and finding marketing intrusive that study after study shows that they’re unlikely to engage with anything that looks like an ad. Nielsen Norman Group, a world renowned usability research consultancy has found this case to be consistent over decades studying consumer patterns.

But consumers still find value in discovering products that will help them. Even though they’re likely to ignore ads, they are likely to pay attention to the messages—and marketing campaigns—that they find personally relevant.

“While our attention spans have shortened and the number of devices fighting for that attention has increased, brands also have an unprecedented opportunity to speak to individuals in ways as unique as the needs they serve,” writes Harris Beber, CMO of Vimeo, for AdWeek.

“How and in what ways you speak to your audience must adapt to platforms and context people are interacting with your brand.”

Out of home creates targeting planning opportunities that aren’t possible through digital channels. As one example, AdQuick works with one vendor that operates a network of digital screens within elevators and lobbies—based on these placements, it’s possible to reach a very targeted group of people with a precise message.

You can learn a lot about your audience based on a zip code. For instance, within AdQuick, it’s possible to examine attributes of your most successful zip codes and build lookalike advertising campaigns.

Building upon this precision in measurement, AdQuick can run a pre and post advertising brand awareness survey to quantify who may have seen, engaged with, or responded to a campaign.

For instance, in 2018, AdQuick supported the release of an artist’s album. The campaign took place at Times Square. During this launch, AdQuick was able to scrape all instances of the Times Square board as well as hashtags in the local area.

With this perspective, AdQuickw as able to quantify out of home’s digital marketing ripple effect.

Final thoughts

Successful out of home campaigns require long-term strategic planning. What happens after someone sees your ad? The answer to that question depends on your brand goals. Some advertisers are looking to drive more activity at the top of the funnel, for brand awareness, for instance. Lower funnel campaigns may require a direct response code.

Successful out of home campaigns require long-term strategic planning. Run experiments to see how out of home advertising—and specific marketing campaigns—fit into your overall marketing equation.

Contributors Statement

This blog post was a collaboration between the AdQuick team. Chris Gadek, John McClung, and Jack Gaylor contributed to this piece. Payton Biddington created the visuals.

If you'd like to learn how out of home can work with your unique marketing campaign and business, send a quick email to [email protected] or call (213) 986-6179. We'll reach out with case studies and recommendations tailored to you.

Disclosure

The opinions expressed are those of the authors. This material has been prepared for educational purposes only. Please be sure to consult with your internal team of stakeholders to assess your specific needs before adapting any practices from this blog, as your own.