Emarketer: Digital Out-Of-Home Ad Spend Will Reach $3.84 Billion In 2023

According to eMarketer, this year, digital out-of-home (DOOH) ad spending will account for one-third of total US OOH ad spending, increasing by 1.6 percent to reach $2.72 billion.

As more and more direct-to-consumer (D2C) brands invest in outdoor advertising, the researcher expects the figure to rise by 19.2 percent in 2021.

DOOH has significantly grown since 2015, when its share of total OOH was just 17 percent, about half of what it is today, says eMarketer.

By 2023, 42 percent of all US outdoor ad spending will come from DOOH. 

Digitized outdoor displays have gained momentum in recent years, as Outfront Media saw the number of total digital displays in its US portfolio during 2017 to 2019 jump from 1,693 to 7,266. Whereas Lamar Advertising reported 335 new digital outdoor ad units in 2019, with the intention to add another 250 DOOH displays in 2020.

Insight from Outdoor Advertising Association of America (OAAA) reveals that during the first half of 2020, in the US, there were 7,847 digital transit displays, 5,830 digital shopping mall-based ad units and 5,742 digital street furniture outdoor ads.

During the first half of 2020, the number of digital billboards, the most common type of DOOH ads, in the US reached 9,600, a 43.3 percent increase since 2016.

EMarketer estimates DOOH ad spending will reach $3.84 billion in 2023.

The expansion of 5G networks has enabled brands to utilize artificial intelligence (AI) to create more targeted DOOH campaigns, says Grand Visual chief creative officer Dan Dawson. For example, McDonald’s used data on weather and the time of day to present messages on DOOH ads in the morning to remind passersby how long until breakfast finishes, and on sunny days to promote ice cream sundaes.

69 Percent Of Brands Shift Programmatic In-House Amid Heightened Data Privacy Rules

Sixty-nine percent of brands have taken their programmatic advertising in-house, according to an international report conducted by the Interactive Advertising Bureau (IAB) and Accenture Interactive.

The report analyzes how programmatic’s role in the digital media ecosystem is evolving in companies in the US, Europe and Latin America amid heightened data privacy regulations and concerns.

Programmatic’s share of digital ad spend worldwide is poised to grow to 68 percent this year, according to Zenith. That number is likely to further increase as mobile and digital consumption rates soar during the pandemic. In the last five years, programmatic’s share of digital ad spend worldwide has increased 54 percent, with more than two of every three display ad dollars being spent on programmatic.

Programmatic advertising represents 89 percent of digital ad spend in the UK, nearly 85 percent in the US, 80 percent in Europe and 63 percent in Latin America.

Due to programmatic’s scale and efficiency in targeting and placing digital ads, at a time when digital consumption is at an all-time high, more and more brands are in-housing some or all of their programmatic, the survey reveals.

Twenty-one percent of brands have completely brought programmatic in-house while 48 percent have partially done so.

Europe has displayed the strongest desire to move the function in-house. In fact, 74 percent of European organizations have completely or partially shifted programmatic in-house, which is more than organizations in either the US and Latin America.

Thirty-one percent of brands in Europe have fully moved programmatic in-house while 43 percent have partially done so. Whereas 16 percent of brands in Latin America have completely moved programmatic in-house and almost half have partially done so.

In 2018, the European Union issued the General Data Protection Regulation (GDPR). The US followed when in 2020 it debuted the California Consumer Privacy Act (CCPA). While stricter data regulations reduce the number of consumers who can be targeted, those that can be targeted are more interested and relevant, which results in more effective ad spend and a great sense of trust between brand and consumer.

With the demise of cookies looming, a brand’s ability to effectively control programmatic in-house will depend on its ability to obtain and manage its own first-party data.

“It’s an issue of transparency. We had a contract through our agency, but they didn’t have a transparent programmatic offering. Without transparency, we can’t improve ad effectiveness.” one consumer packaged goods executive told IAB.

Bringing the capability in-house has its challenges, including getting buy-in across the company and flexibility in making the shift. Hence why the companies that have taken all or some of their programmatic operations in-house are utilizing a hybrid approach by seeking external support.

The survey also found that digital video ad spend share worldwide is estimated to be 75 percent this year, an eight percent increase from 2019.

Predictive Analytics Is Critical For Media Planning—Here’s Why

Predictive analytics, the use of real-world data and machine learning techniques to identify the likelihood of future outcomes, has become a cornerstone of media planning. Human intelligence, however, is just as important to the success of predictive analytics’ application as technology is. To understand how, we spoke with Piotr Urbanski, Ayzenberg associate director of marketing science, and Ayzenberg chief marketing officer Vincent Juarez, who both work closely to craft client strategies based on historical data and predictive analytics, or predictive modeling. The two discuss all things predictive analytics: what it is, why it’s important for marketers and why it’s critical for media planning, especially during times of uncertainty. 

What are predictive analytics?

Piotr Urbanski: There are two approaches to analyzing data—the first is predictive analytics, or predictive modeling, And the second is causal inference, which is a little bit more descriptive and aims to understand the cause and effect between the numbers. For example, if one goes up, why does the other one trend with it? Whereas predictive modeling doesn’t consider the why; you just want to be as accurate as possible. Those who use predictive modeling know it’s a very good predictor and they get very good outcomes, but they don’t measure the why.

How do predictive modeling and causal inference differ?

PU: They use the same statistical tools. The most basic predictive models can perform a regression run or trend line. As one value goes up, the other value also goes up. And then you could extrapolate, or predict, based on that trend. 

Causal inference takes it a step further to consider theoretically how A impacts B. For example, if A is temperature and B is crime rate, you see that as temperature goes up, crime rate also goes up. Temperature is a good predictor of crime. But does that mean temperature causes crime? So at that point you start digging into various different theories.

For analysts, causal inference makes our job much easier. Because part of your research is already researching the cause and effect, you get really easy, actionable insights. So in most cases, now that you’ve identified a cause, you can control that cause or influence it in some way. In a nutshell, predictive analytics and causal inference are two sides of the same coin.

Why are predictive analytics important for marketers?

PU: On the media side, predictive analytics helps predict where you should be targeting money by analyzing the behavior of consumers purchasing your product or engaging with your brand. To be really good at predictive analytics, a human element is still necessary. So on top of your findings, you’ll typically have a marketing science team that layers additional analysis to not only make sense of the data but also predict between platforms to achieve a more wide-reaching view.

At the end of the day, predictive analytics help a company’s bottom line. Let’s say you’re running a campaign that’s a million dollars. If you can become more accurate by even a fraction of a percent, you’ve saved tons and tons of money and easily added value that wouldn’t have existed before. It also makes your actions accountable because you know what isn’t working and where to stop or start paying for ads to get the biggest bang for our buck.

How do predictive analytics impact Ayzenberg’s media department and planning?

Vincent Juarez: I oversee both media groups at Ayzenberg, the media planning group and the influencer marketing group. A lot of our clients rely on us to provide them with maximum transparency in the campaign strategy that we craft for them. This is not only to validate the results of the campaign, but also to create models that predict what those results are going to be. That’s where predictive analytics become especially important for marketers, because in this day and age, we’re held to a higher standard of accountability. As a result, the agencies that work with them are held to an even higher standard of accountability to try to predict a certain amount of return on your investment.

The relationship between our media department and marketing science team is symbiotic. We provide the wealth of data that gets fed into the marketing science team’s models to try and predict outcomes based on different marketing mixes, different marketing strategies and different budget allocations by vehicles and so on.

It’s hard for Piotr and his team to do their job without the data that my team generates around the real world basis. He takes our analytics and our forecasting to a scientific level that our media planners and marketers just don’t have.

This is one of the reasons why after many years, we identified the need for a dedicated marketing science group. As a digital- and social-first business model, we found that there was a distinct need for a marketing science group to provide us with that next level of expertise to assess the health of a campaign and predict the outcomes of campaigns that we create on behalf of clients.

How has COVID-19 affected the media team’s use of predictive analytics?

VJ: Because of the pandemic, marketers are a lot more careful about their investments. There’s a lot of scrutiny in terms of making every dollar work like ten dollars. As a result, predictive analytics has become even more important during this time.

Though we don’t have control over external factors that could potentially affect our forecasts, I’d say we’re very successful in our predictions. We have made a significant investment in data science because everyone wants to go into their strategy with as much information as possible to determine the success rate. 

Predictive analytics offers a safety net for marketers and for agencies to try and understand upfront the degrees of success or the risk of running a certain type of campaign. Instead of the old style of throwing millions of dollars at a specific vehicle like TV, for instance, and watching the sales numbers and hoping for the best, it’s really about trying to predict the future of the cause and effect of an investment. And having that kind of knowledge helps us differentiate ourselves from other agencies.

Ad Spend In North America Declines 31.6 Percent Near End Of Q2

Ad spend declined by 31.6 percent across North America during the last two weeks of Q2 after increasing by 91.7 percent near the end of Q1, according to Socialbakers’ Q2 2020 social media trends report. The decease is likely a result of hundreds of brands pulling their Facebook ads in a show of support for a civil rights groups-led boycott against the platform.

Socialbakers’ findings show that worldwide ad spend bounced back, growing by 26.2 percent in Q2 compared to Q1. The period of April to May, when many businesses reopened, saw a dramatic increase in ad spend and cost-per-clicks (CPC). In the US, CPC increased by 31.1 percent and globally, by 55.3 percent. CPC in East Asia rebounded earlier than most regions, causing CPC to slightly decrease, from $0.158 to $0.148.

CPC for brand ad accounts, on the other hand, hit a low of $0.075 in April, but picked back up with a 42.7 percent increase to $0.107. Still, CPC were still 23.6 percent lower than they were in Q2 2019, at $0.140.

Overall, most industries returned to normal ad spend across regions in Q2, seeing an increase of an average of 27.1 percent. Looking to recoup losses suffered during the onset of the pandemic, the accommodation industry’s ad spend surged by 151.3 percent and ecommerce’s ad spend grew by 76.3 percent compared to Q1.

Despite signs that paid advertising was inching toward pre-pandemic levels, ad spend declined by 31.6 percent near the end of June, which could be linked to the anti-Facebook boycott.

Social media ad spend hasn’t shown signs of returning to normal. In fact, ad spend for the Facebook news feed dropped by 2.6 percent, part of an ongoing decline that started in January 2019—from a high of 64.1 percent of total spend to 57.7 percent in June 2020.

Among the top five platforms by relative ad spend, the Facebook news feed decreased by 34.6 in CPC and by 40.6 percent in cost per mille (CPM).

Facebook Instream Video, however, increased by 21.4 percent in CPC and 18.9 percent in CPM.

Spend on the Instagram feed also decreased, by 4.2 percent. Instagram feed and stories declined by about 37 percent in CPC and 28 percent in CPM.

In terms of organic social media, video content on Twitter and Facebook Live spiked in Q2.

Across platforms, Twitter had the highest percentage of video. Over the last three quarters, more than 20 percent of tweets from brand profiles with over 1,000 followers included a video. That figure rose to 27.3 percent in June.

Facebook Live represented just 0.99 percent of all posts from Facebook brand profiles, resulting in an increase of 26.9 percent in Q2. From March to June, Facebook Live increased by 126 percent, indicating its importance in the time of lockdowns.

The data also show increased activity around podcasts, with the number of brands on Instagram who mentioned podcasts growing from 510 in June 2019 to 1,087 in April 2020.

The pandemic has also impacted influencer marketing. In Q2, the number of influencers who used #ad in their posts decreased by 11.4 percent year-over-year.

These findings are based on Socialbakers’ analysis of a minimum of 50 Instagram profiles and 50 Facebook pages for any given category.

Nielsen Announces Changes To Its Digital Audience Measurement

Nielsen is transforming the methodology behind its digital measurement products in response to evolving data privacy regulations and the decreasing reliance on third-party cookies.

The new methodology will apply to Nielsen’s suite of digital products, including Digital Content Ratings, Digital in TV Ratings, Digital Ad Ratings, Total Content Ratings and Total Ad Ratings.

Though it hasn’t provided full details, Nielsen says the privacy-centric methodology will help provide more transparency across third parties and the internet, enhance reporting of personal and connected devices and enable measurement flexibility by reducing reliance on third parties. 

Nielsen’s end goal is to position digital companies to better monetize their assets, optimize spend and confirm cross-platform campaign delivery. For marketers, this means a more holistic view of both television and digital data.

To support the revamp of its digital measurement, Nielsen will leverage its census data collection technology, proprietary network of walled gardens and platform data providers and new deduplication methodologies.

Nielsen chief operating officer Karthik Rao told TechCrunch that a focus on the portability of data and data models, plus the deduplication of audience, will ensure it doesn’t inadvertently count the same users on different platforms.

Nielsen will launch the new methodology in phases starting in early 2021.

The pandemic has prompted companies to adopt a host of digital services, posing new risks over data privacy breaches. Cillian Kieran, the CEO and founder of Ethyca, says that businesses can de-risk by performing diligence on third parties that process customer data, designating a data protection officer and ensuring clarity of privacy policies for consumers.

IAB: Podcast Advertising Revenues Reached $708.1 Million In 2019

With an expected growth rate of 14.7 percent this year, US podcast ad revenues are inching toward the $1 billion mark despite the global pandemic, according to the International Advertising Bureau’s (IAB) fourth annual Podcast Advertising Revenue Report which examines 2019 podcast performance and 2020 projections. The figure represents a downgrade from IAB’s pre-pandemic estimate that podcast ad revenues would increase by 29.6 percent in 2020.

In 2019, podcast advertising revenues grew by 48 percent, reaching $708.1 million, up from $479.1 million in 2018. As IAB’s research shows, podcasts are increasingly becoming part of a brand’s annual planning as annual buys in 2019 reached 47 percent, up from 24 percent in 2018. Whereas scattered advertising dropped to 21 percent of overall buys in 2019.

Top podcast advertisers included direct-to-consumer (DTC) brands (22 percent) and financial services (16 percent). The largest DTC subcategories were health and wellness (22 percent) and home and appliance (19 percent). 

Consumer packaged goods brands increased their investment in podcast ads, from two percent in 2018 to six percent in 2019. Additionally, beverage brands, restaurants and healthcare companies also doubled their investment.

For US podcast advertisers, the leading content genre was news and captured 22 percent of revenue, followed by comedy (17 percent) and society and culture (13 percent).

Direct response ads accounted for 54 percent of podcast ad revenues and mid-roll ads generated 74 percent of ad revenues, with 44 percent of spots being between 31 and 60 seconds.

Over half (66 percent) of podcast ads were read by a host vs. 27 percent which were pre-produced ads. This format makes podcasts more resistant to COVID-19 than other media because flexibility enables messaging to remain relevant as unexpected events occur and sentiments change.

The IAB attributes decreased revenue projections for 2020 to canceled or paused campaigns, a lower volume of requests for proposals (RFPs) and a decrease in cost per thousand impressions (CPMs).

Podcast advertising revenues are expected to rebound in the second half of the year, as IAB notes, historically, one-third of US podcast ad revenue is generated in Q4.

The results are based on a survey IAB sent to companies in mid-March and again in mid-April to account for any changes related to the pandemic.

Social Media Spending Increases 74 Percent During Pandemic

Since February, marketers increased their social media and mobile spend by 74 percent and 70 percent, respectively, according to a new special COVID-19 edition CMO Survey from Deloitte, Duke University’s Fuqua School of Business and the American Marketing Association (AMA).

The results indicate consumers are now more receptive to digital experiences but are also more deliberate in their purchasing. As for marketers, optimism about their company and the overall economy has plummeted to near 2008 recession levels while marketing budgets account for the highest percentage of firms’ overall budgets and revenues in CMO Survey history.

As consumers increasingly shop and socialize online during lockdowns, 84 percent of marketers say customers are showing an increased openness to new digital offerings, a newfound value they believe will remain high post-pandemic.

Social media budgets jumped from 12.3 percent to 23.2 percent of total marketing spend, leading to a 24 percent in brand performance since February and marking a record first lift. However, performance remained unchanged by increased investment in mobile.

Brands have primarily used social media during the pandemic for brand awareness, retaining current customers, acquiring new customers and running brand promotions. Additionally, 7.5 percent of marketing budgets involve the use of influencers, with the number expected to reach 12.7 percent in three years.

While the number of Americans seeking jobless aid balloons, 67.2 percent of marketers have observed a lower likelihood to buy and 43.3 percent have observed an unwillingness to pay full price. Nevertheless, they’re optimistic that consumer behavior will return to normal in six to 12 months. 

About 20 percent of brands believe consumers’ highest priority will be trusting relationships, up from 19.9 percent in February 2009.

Brand building and retaining customers have been two areas of focus for marketers, at 33 percent and 32.6 percent, respectively. Over half (60.8 percent) say they’ve shifted resources to building better digital customer experiences, 56.2 percent say they’ve transformed their go-to market business models and 41.9 percent are working to expand into new products and services.

While a global push for racial equity persists, 79 percent of marketers say consumers are taking greater note of companies’ attempts to “do good.” Yet just 18.9 percent of respondents deem taking a stance on politically charged issues as appropriate, citing benefits such as standing out, showing that their company cares and attracting new customers.

Respondents report a major loss of sales revenue, products and customer acquisition. For example, nearly 17 percent of marketers have lost over 50 percent of their revenue, with sales revenue dipping 17.8 percent. Compared to 64 percent of marketers who report sales losses, 30.3 percent have reported gains and 5.2 percent have reported no change.

Ramifications also include losses in profits and new customers, with 14.4 percent reporting a loss of more than 50 percent of profits and 11 percent reporting a loss of more than 50 percent of customer acquisition. Brands expect the aforementioned to rebound in 2021, anticipating a 7.1 percent growth in customer acquisition, a 4.2 percent rise in revenues and a 2.6 percent increase in profits.

Despite these disruptions, marketing budgets remain critical as the data show they have increased to the highest percentage of firms’ overall budgets and revenues in the survey’s history, at 12.6 percent and 11.4 percent, respectively. Comparatively, nearly half of digital marketing budgets remain unchanged.

The job market for advertisers has also taken a hit, resulting in a nine percent loss of marketing jobs, with 24 percent of marketers expecting those jobs to never return.

The results are based on a survey conducted among nearly 300 marketers at for-profit US companies, between May 5 and 27.

Media Buyers Don’t Expect Ad Spend To Rebound This Year

At the beginning of the pandemic, nearly half of advertisers pumped the brakes on or pulled a campaign mid-flight. During that same time, about half also reported plans to not reduce ad spending but instead shift budget among media types. These findings emerged from Advertiser Perceptions’ wave one coronavirus survey, fielded from March 17 to March 20.

In early May, media buyers expressed optimism about Q3, with just one in three respondents expecting ad spend to be affected in Q3. 

However, Advertiser Perceptions’ wave-five survey, fielded from May 18 to 21, suggests that ad spend won’t rebound this year. In fact, 43 percent of media buyers expect there to still be a “major impact” on ad spending in Q3, eMarketer reports. The sentiment is in line with responses to Advertisers Perceptions’ wave two and three surveys, fielded in March and April.

By the time Advertiser Perceptions conducted its fifth survey, just 13 percent of US media buyers confirmed ad spending had already begun to ramp up. An additional three percent expected the same to occur by the end of the month.

On the other hand, 79 percent of respondents said they anticipated ad spending to start picking up by the end of Q3, 51 percent of which expected it to happen during Q3.

Advertiser Perceptions also found that most media buyers expected moderate or major impacts to continue through the end of 2020, while one-third expected at least moderate ramifications to continue into 2021.

Now, 43 percent of respondents expect a major impact on ad spend to push into Q3, up from 31 percent in wave four, which was fielded from May 1 to 5.

eMarketer advises the digital ad industry should prepare for a slow return to a new normal. Digital ad investments will plunge in Q2 and year-over-year spending increases won’t return to pre-pandemic figures until at least 2021, the researcher notes.

How The Rapid Growth Of Ecommerce Will Change Brands’ Approach To Media

As the pandemic accelerates the shift to digital, ecommerce becomes both an opportunity and a threat to brands. During his virtual LIONS Live presentation, WARC vice president of content David Tiltman and a panel of marketing executives discuss how the rapid growth of ecommerce will change how brands approach media and why brand and creativity will remain key along the way.

Ecommerce’s first implication for brands, Tiltman notes, is that it forces consumers out of usual purchase habits and into new ones. According to a Kantar study, during lockdowns, 56 percent of households with kids have tried new products, which they’ll continue to buy.

To capitalize on changing consumer behavior, brands must look at the total brand experience they can offer, from rethinking packaging and pricing to enhancing the unboxing experience. “What you lose in the ability to talk to customers and let them touch and feel your products, you have to make up for in your customer experience,” says Cheryl Calverley, chief executive officer of Eve Sleep.

Effective marketing in the age of ecommerce also requires marketers to get closer to the supply chain.

“Supply chain is a top-line growth driver for ecommerce, it’s not a cost-cutting exercise. It drives second moment of truth. We see vulnerabilities for brands impacted by damages like leaking, broken trigger sprays and bruised fruit. That’s all damaging that second moment of truth. Supply chain is the opportunity to make second moment of truth outstanding,” says Patrick Miller, co-founder of Flywheel Digital, whose client roster includes Procter & Gamble.

Ecommerce is also changing the way marketers view performance media to drive sales. One trend that encapsulates this shift is the rise of shoppable formats. For example, Instagram’s recent expansion of virtual storefronts for businesses and Snapchat’s forthcoming shoppable show represent opportunities for marketers to take a consumer directly to sale.

Another trend that has arrived with the rise of ecommerce is livestreaming ecommerce, which has already gained significant traction in China. There, livestream shows combine influencer marketing, video content and ecommerce to create “retailtainment” (retail and entertainment) experiences that drive community and sales.

Elijah Whaley, chief marketing officer of the Chinese influencer consultancy Parklu, points to the success of cosmetics brand Perfect Diary, which launched in 2016 and became a top-selling brand on China’s Tmall in 2018 and again in 2019. Instead of focusing on the top-of-funnel like brand awareness and programmatic advertising, Whaley says Perfect Diary has poured efforts into fostering community. To do so, the brand created a virtual influencer around which it launched a program store and product line. The result: Perfect Diary has over a million customers in what’s called “private traffic,” or online audience, on WeChat.

Lastly, Tiltman advises brands to resist the shift to short-termism, which has produced the creativity crisis. For example, brands have spent more on ecommerce and less on brand advertising, leading to diminished campaign effectiveness.

“Digital channels prove themselves quite well in a silo, but you need to understand how it fits into your whole mix,” says Jerry Daykin, EMEA media director of GlaxoSmithKline.

In addition to looking beyond attribution models, Tiltman suggests reserving budget for brand building.

Brands Stop Facebook Ads In Show Of Support For #StopHateforProfit Campaign

The North Face is halting its Facebook ads as part of a social media boycott led by civil rights groups calling on brands to take a one-month Facebook advertising hiatus in an effort to crack down on hate speech and misinformation on the platform. “Stop Hate for Profit,” organized by the Anti-Defamation League, Color of Change, the National Association for the Advancement of Colored People (NAACP), Common Sense Media, Free Press and Sleeping Giants, follows Facebook’s refusal to remove President Trump’s offensive posts in the aftermath of the murder of George Floyd by police.

Stop Hate for Profit condemned Facebook for actively choosing not to protect and support black users and call out Holocaust denial as hate.

As per StopHateforProfit.org:

“We are asking businesses to stand in solidarity with our most deeply held American values of freedom, equality, and justice and not advertise on Facebook’s services in July.”

On Friday, The North Face tweeted, “We’re in. We’re Out,” with a follow-up tweet noting that its commitment to the movement extends to all Facebook-owned properties, namely Instagram.

A few hours later, REI followed suit, saying it, too, would pull all Facebook and Instagram ads for the month of July on the premise that it has put people over profits for 82 years.

Patagonia’s head of marketing, Cory Bayers, also announced via Twitter that the brand will stand with #StopHateforProfit:

“From secure elections to a global pandemic to racial justice, the stakes are too high to sit back and let the company continue to be complicit in spreading disinformation and fomenting fear and hatred.”

Since then, Talkspace and Fons have also said they’re pulling spend from Facebook advertising.  

Facebook’s content moderation policies have drawn backlash for propagating fake news, racism and hate speech before; the Black Lives Matter protests have only magnified the issue. After Floyd’s death, Trump took to Facebook, referring to protesters as “THUGS” and warning, “when the looting starts, the shooting starts.”

In response, CEO Mark Zuckerberg said the platform wouldn’t remove the President’s post on the basis that Facebook “should enable as much expression as possible unless it will cause imminent risk of specific harm or dangers spelled out in clear policies.”

As the #StopHateforProfit organizers point out, Facebook generates nearly all of its revenue through advertising. Despite marketers pausing spending in response to COVID, Facebook made $17.4 billion in Q1 from advertising alone.