Episode 88: Tim Rowe from OOHInsider teaches us about digital out of home

Digital out of home is big, underpriced and fragmented

Digital out of home is a large, underpriced connected screen channel held back by fragmentation, weak verification and a branding problem. Supply sits with owners that behave like landlords, and most programmatic buying runs through private deals because buyers need trust. Rowe argues that networks fixing broken inventory will win, and that joining out of home planning with CTV would unlock growth.

Takeaways

• Digital out of home is underpriced. Rowe calls it the most powerful connected broadcast channel. It is about $21bn globally and $5bn in the US. Share of wallet is 5% globally and 2.4% in the US, which he expects to fall to 2% by 2028.
• Supply is fragmented across too many screens. Ari splits the market into cinema, premium units like JCDecaux and Times Square, and small screens everywhere else. Rowe says there are too many screens and most owners act like REITs, not media companies, so aggregators are pooling mall and convenience store media.
• Programmatic runs mostly through private marketplaces. Rowe says buyers need trust and transparency, so PMPs dominate. Lamar and JCDecaux lead supply, and Place Exchange and Vistar are key platforms. Programmatic teams, not out of home teams, drive the buying, and about 40% of programmatic money goes to billboards.
• Verification gaps threaten buyer trust. Many buyers may not know what they are buying. During COVID, north of 80% of closed venues still listed inventory as available. Rowe says broken inventory kills credibility. QR codes give a partial measure, while exposure data is the cleanest.
• Siloed teams and weak branding hold growth back. Rowe says CTV and out of home sit in separate teams, which prohibits growth, and he calls branding the biggest problem. Roku's ownership of BrightSign, which powers about 2m screens, could help make out of home a brand lever.
• The Trade Desk is reportedly building a TV OS. Django Rutgers reports it may use open source Android, with former senior Roku staff involved. Ari's source says contracts are out to app providers and FAST channels but no manufacturers. Major TV operating systems each hold about 6%, so the market is fragmented.

Other threads in the news

• Marketecture published the DoubleClick sales deck, which estimated Google would make $2.6bn a year in media. Ari also plans daily reporting from a Virginia courthouse.
• Netflix is hunting for a successor to Peter Naylor amid tension between programmatic and direct sales. Ari says its household first-party data justifies opening to programmatic partners, while Rowe says it must protect its premium experience.