The Basics of Programmatic DOOH Advertising

Because programmatic has fundamentally flipped the more traditional and way-too-analog OOH advertiser-media company relationship on its head, OOH advertising, in general, is quickly being seen as a more critical and essential tool in an advertiser’s multi-channel toolkit.

The Basics of Programmatic DOOH Advertising

If you’ve been paying close attention to the out-of-home advertising space over the last few years, you probably have seen it getting a lot of newfound attention.

And for good reason.

What was historically thought of as a channel of “billboards” has now transformed into a performance marketing behemoth that is starting to rival its social and digital media counterparts.

A lot of this has to do with new technologies and a plethora of new formats—especially in the realm of “street furniture”—breathing life (and interest) into the channel, making advertisers quickly realize that it has become a channel without limits, with nothing but room to grow.

And while we could wax poetic about all the reasons why out-of-home, in a more general sense, should top-of-mind to you—because, after all, it is the space we lived and breathed in pre COVID-19 and it's exploding.

So we thought we’d take a minute to shift your attention to one part of the channel that’s really gaining steam (pandemic or not): digital out-of-home (DOOH).

DOOH is more than just digital billboards or brand messages splattered across virtually any screen within the public space.

That’s just the output.

Surrounding this rapidly growing DOOH space, however, is the tech infrastructure of programmatic advertising, which is revolutionizing how advertisers now approach out of home (for the better).

Because programmatic has fundamentally flipped the more traditional and way-too-analog OOH advertiser-media company relationship on its head, OOH advertising, in general, is quickly being seen as a more critical and essential tool in an advertiser’s multi-channel toolkit.

That’s why we thought it was worth providing a bit of a refresher around the basics of programmatic advertising.

It’s not something we’ve done in detail before, but we figured it was good to have as a reference point, especially as we, at AdQuick, continue to develop and deploy more DOOH advertising solutions that leverage the power and intelligence of programmatic.

We promise, we’ll do our best to keep it short, sweet, and to-the-point, so you can get to the good stuff faster: planning your own programmatic DOOH campaigns.

What is programmatic advertising?

Here’s a simple definition of programmatic advertising:

Programmatic advertising uses algorithms to automate and streamline the buying and selling of digital advertising space (impressions) on nifty little things we call ad exchanges, helping advertisers find the right ad inventory for reaching and engaging their target audiences, in real-time and with utmost precision, across multiple publishers.

What that basically means is that programmatic is, quite simply, a smarter way to go about digital advertising.

Not only does it offer advertisers a huge advantage in reaching desired audiences more effectively—thanks in big part to the rich data and intelligent technologies underlying these ad exchanges—but it also gives publishers a better way to monetize their ad inventory and make it available to advertisers in an open and accessible way.

For both advertisers and publishers, the process is pretty straightforward:

  • A publisher offers up ad impressions for auction. This is what we refer to as a supply-side platform (SSP). We’ll get to that in a second.
  • An advertiser throws out a bid to win that auction. You guessed, this is what we refer to as a demand-side platform (DSP).
  • As is the case in any kind of auction, programmatic or otherwise, the highest bidder gets the prize—in this case, the opportunity to run ads on a given publisher’s inventory.
  • And if the ad exchange’s data-driven knowledge perfectly paired up an advertiser with a publisher that successfully reaches a desired target audience, then there’s a great chance the consumer, upon seeing the ad, will take action on it.

While this may be an overly simplified way of explaining what takes place on ad exchanges for the purposes of keeping this article short and sweet, it nonetheless paints a clear picture about the inherent value that programmatic brings to the ad buying and selling processes.

There’s no question about it, it’s a smarter, simpler, and more effective way to approach digital ad buys.

Cool -- we’ve got that out of the way.

Now, let’s take a closer look at two important pieces of the programmatic DOOH puzzle: SSPs and DSPs.

What is a supply-side platform?

On an ad exchange, there are two key players: advertisers (buyers) and publishers (sellers).

Let’s start by focusing on the sellers.

They use SSP’s to manage, sell, automate, and optimize available advertising inventory (aka, supply).

In many ways, this has replaced the need for media salespeople to engage with advertisers one-on-one to sell available digital ad inventory.

These connect directly to ad exchanges and ad networks, which facilitate transactions with advertisers (via demand-side platforms or 'DSPs').

The key benefits of supply-side platforms are:

  • Automation: SSP’s make buying and selling digital ad inventory simple, enabling publishers of any size to monetize their digital ad inventory easily and automatically.  
  • Reporting: Publishers get greater insight into the value of their ad inventory because SSP’s can provide data on every aspect of the ad buying process: who’s bidding, how much they’re paying, how much any given advertiser is buying, and so on. This is invaluable for setting accurate prices based on real-time, fluctuating demand.
  • Aggregation: To avoid a potential drop in demand due to not enough buyers vying for specific inventory, SSP’s can broaden the pool of potential buyers by connecting to multiple ad networks, achieving better yield and avoiding a drop in inventory value.
  • Yield Optimization: SSP’s provide publishers with greater control over pricing to ensure that available inventory isn’t sold under an established price floor.  
  • Brand Safety: SSP’s make it easier for publishers to be selective about the ads that run in their inventory, as a means of avoiding inappropriate content from surfacing. Sometimes publishers can even choose who they sell to or through which channels they use to sell in order to maintain quality assurance safeguards.  

What is a demand-side platform?

Demand-side platforms are where the magic of programmatic really happens.

It’s where advertisers can purchase digital ad inventory from publishers via ad exchanges and ad networks.

But the true value of DSP’s goes way beyond a simple ad buying transaction.

DSP’s allow advertisers to target specific audiences based on demographics, location, interests, behaviors, and a wide array of variables.

While this can have a significant impact on pricing, especially when the available ad inventory for reaching a specific audience may be low, DSP’s nonetheless make it possible for advertisers to pinpoint which publishers can provide the right and best ad inventory for reaching and engaging their target audiences at scale.

Therefore, the key benefits of demand-side platforms are:

  • Global Reach: One of the greatest perks of programmatic is its ability to give advertisers far-reaching access to ad inventory across all platforms worldwide—oftentimes with just a few clicks. This alone saves a tremendous amount of time and resources to deploy effective digital advertising campaigns, at scale and in real-time.
  • Precise Targeting: Advertisers can choose exactly who will see their ads to avoid wasting impressions and ad dollars on eyeballs that won’t ever convert into actual customers.
  • Quality Inventory: Advertisers can also choose the kind of inventory they’d like to buy to ensure that marketing messages used are in relevant, brand-safe contexts at all times.
  • Real-Time Analytics: For many advertisers, being able to get real-time data and analytics at scale about ad performance is one of the most powerful aspects of programmatic advertising. Not only does this allow advertisers to optimize and improve creative on the fly to drive up conversion, but it also helps them understand, more specifically, which ad units or publishers aren’t driving enough value.

4 ways advertisers can buy DOOH ads programmatically

There are a lot of other moving parts to the programmatic ecosystem, well beyond SSP’s and DSP’s alone, that we won’t bore you with here.

However, what is important to highlight is how transactions take place on these platforms.

While the vast majority of buyer-seller transactions fall into the category of real-time bidding (RTB), there are a few other buying methods that both advertisers (or their agencies) and publishers can choose to engage in.

Let’s take a quick look at the four primary methods:  

  1. Real-Time Bidding (RTB): This is the most common way to buy and sell ad inventory on ad exchanges—and, in many ways, one of the most foundational elements of programmatic advertising overall. In short, RTB is the ad tech infrastructure that enables this process through live, real-time auctions, where pricing and inventory (across multiple publishers) changes dynamically based on an advertiser’s chosen audience targeting parameters. These are open exchanges where any advertiser can bid on digital ad inventory (impressions) that meets its audience targeting requirements, and then win that inventory by offering the highest bid in the moment the transaction is taking place.

    This has changed the buying and selling process entirely by letting advertisers focus more on overall impressions (based on audience targeting) across multiple publishers versus identifying the right publishers and then determining how to reach desired audiences as a secondary priority. RTB is a better way to optimize digital ad spend, as you are more or less guaranteed that impressions won’t be lost to irrelevant consumers.
  2. Private Marketplace (PMP): This is a closed auction where publishers invite specific advertisers to engage with them directly to bid on their inventory, typically bypassing ad exchanges altogether. This provides advertisers with more visibility around the inventory and allows publishers to set a price floor upfront, regardless of supply.

    This inventory is oftentimes considered to be more “premium” compared to inventory available on the open exchange. Because there’s more “control” and less uncertainty in the buying and selling process here, this can be a solid route for advertisers who want to mitigate potential brand safety concerns and get ads in front of the right consumers.
  3. Preferred Deals: These are one-to-one deals between advertisers and publishers based on a fixed CPM, further ensuring that the ads surfaced will reach a desired audience. All remaining inventory not sold through preferred deals is then made available to all advertisers via RTB on the open exchange. Even though the volume of these impressions is not guaranteed, this is still a more precise way for advertisers to secure inventory that more closely aligns to its predetermined audience targeting parameters.  
  4. Programmatic Guaranteed: These are also one-to-one deals where advertisers agree to purchase a fixed number of impressions and publishers promise to deliver those impressions for a set price. Because of these guarantees in place, advertisers have comfort in knowing that the impressions purchased—in what is also considered “premium” inventory—will deliver value versus bidding on impressions in the open exchange that may or may not convert.

Who are the key digital out-of-home (DOOH) players?  

There is a fast-growing ecosystem emerging around SSP and DSP players in the DOOH space.

Each brings a different level of value and expertise to the space.

The team at Luma Partners put together this amazing supergraphic (inspired by Scott Brinker's annual Marketing Technology Landscape), of the out-of-home ecosystem.

It's a great way to understand the lay of the land of the digital out-of-home advertising ecosystem.

Check it out below and keep reading to learn more about the key players in the DOOH space.

Demand-side platforms (DSPs)

  • Vistar Media: Vistar helps advertisers assess impression delivery impact on foot traffic, brand metrics (awareness, consideration and purchase intent), and sales lift.
  • Blip: Blip allows organizations and individuals to advertise on digital billboards on a "Pay Per Blip"​ basis, meaning that there is no term contract, and no minimum spend required. Ideal for local, small-to-medium sized businesses, advertisers pick what screens they want to show up on and indicate what they are willing to pay for each 8-second display of their ad.
  • Adomni: Adomni's network of over 100,000 real world screens; from larger-than-life screens in Times Square to small screens in retail locations, helps advertisers deliver better marketing results by reaching consumers on-the-go in a meaningful way.
  • Centro: Centro puts its 15+ years of relationships with publishers to work by providing advertisers a PMP (private marketplace) library of over 2,000 active private deals across hundreds of market participants.

Supply-side platforms (SSPs)

  • Vistar Media: Vistar's SSP offers an extensive network of screens to many DSPs (including AdQuick's Programmatic DOOH DSP) and streamlines operations with workflow tools designed for enterprise-scale media owners.
  • Broadsign: Broadsign's Reach SSP allows demand side partners (including our DSP) to make full use of their product stack by integrating their own planning, discovery, retargeting, proximity triggering and attribution tools, providing buyers with a unique and complete programmatic DOOH offering, and provides both the demand and supply side with open and transparent relationships.
  • Place Exchange: Place Exchange offers DOOH media buyers a broad network of screens to choose from and the same workflows and reporting with the DSP systems they already use and are familiar with.
  • VIOOH: An acronym for 'Viewed Impressions for Out Of Home' and pronounced "View", VIOOH gives media buyers a transparent platform that ensures advertising messages are 100% viewable, brand safe and seen by bot free, targeted audiences.
  • Hivestack: Hivestack has been building a platform for the last 16 years that consists of an SSP for DOOH media owners, an ad exchange with APIs to monetize remnant (unsold) inventory, a DOOH ad server, and a DSP used by digital agencies to buy digital OOH media programmatically.

Why is programmatic DOOH important?

The answer to this is easy:

Everything we just talked about above is going to play an even bigger role in DOOH advertising from this point forward.

The rules of engagement are quickly changing as more DOOH inventory is going programmatic.

Not only will this give advertisers more, better, and easier access to DOOH inventory than ever before,

but it will also enable them to make smarter ad buys that are more likely to reach and engage their target audiences—with a higher degree of precision than has ever been experienced in the out-of-home world before.

This is a game-changer for DOOH and just one (of many reasons) why advertisers need to let go of their preconceived notions, based on what they’ve known to be true about the world of OOH of the past, and rethink their entire approach and relationship to OOH moving forward.

There are a lot of big and exciting changes happening in the digital out-of-home advertising space: localized hyper-targeting, cross-channel remarketing, and offline-to-online attribution.

Our team has partnered and integrated with industry leading SSPs, built an experience familiar to most digitally-native marketers,

and a dashboard with real-time data to help you measure and optimize your OOH campaign's impact on foot traffic, web conversions, and app success events.

shh..... (don't tell anyone)

If you've made it this far  – feel free to put some time on our calendars, we'd love to talk to you, learn more about your business, and see how we can help you deliver OOH impressions that drive revenue.