Digital Signage Today
00:14:16 · Daniel Brown
[00:14:16] S1: Oh, I'm just going to say that was such a great line. I'm going to put that on a T shirt. I'll share royalties with you. What you get out is what you put in. It's really good.
00:14:24 · Ari Buchalter
[00:14:24] S2: And of course, I didn't make that up, but it's certainly true and accurate in this context. So the other question you asked was, what are some of the don'ts that people should avoid? You know, I think oftentimes people are just sort of happy to get any money flowing through the pipes and maybe don't take as close a look at it as they should. I think one of the issues in our space is around transparency with regard to all the economics behind the transactions. And this is sort of a bigger question and issue that exists in the programmatic landscape generally. Some sellers are content to take whatever they can for the inventory that would otherwise go unsold, but it's possible they could be getting even more. So you imagine, let's say a buyer was willing to bid $10 CPM or cost per thousand impressions for a particular ad slot, but maybe somehow down the chain that only got communicated to the seller as a $5 CPM. So obviously, dollars 5 getting taken out somewhere in the middle, and that's obviously not a situation that benefits either the buyer who's getting less media for their budget, nor the seller who, of course, would be realizing less revenue. But it can and does happen with some platforms if you don't have sort of full transparency. And so from my view, it's really important that sellers demand that transparency from their programmatic partners into the complete economics of every transaction, whether it's a so called private marketplace deal or an open auction transaction. These are just different ways that programmatic media can transact. Regardless of that transaction mechanism, getting that transparency all the way up to the true price that the buyer on the other side is paying and any fees that come out along the way. I think that's really, really important to have a healthy, thriving ecosystem. And I encourage all sellers to ask those questions.
00:16:21 · Daniel Brown, Ari Buchalter
[00:16:21] S1: So this is where it sounds like I keep hearing we need more data based decision making, be good at math or hire someone who's good at math to help you optimize. [00:16:30] S2: Yeah, that's exactly right. And make sure that you have all the relevant data, right? Again, what you get out as a function of what you put in. So if you don't know all the information going in, you can't make the best decisions and ensure that you're getting the maximum value from it. [00:16:45] S1: Well, listen, you kind of went into the trends a little bit earlier, so I wanna expand. You know, I keep going to these business summits, and I keep hearing somebody say the line, programmatic's only a tiny portion of the overall duo space globally space globally, and they're kind of dismissive sometimes, which makes no sense to me. It's been growing very, very fast, and we've been following some of the international markets and emerging markets where it's got logarithmic increases. What kind of trends are we looking at over the next decade, and how can smart business folks cash in?
00:17:17 · Ari Buchalter
[00:17:17] S2: Yeah. Logarithmic or even exponential, which would be even faster growing. Digital out of home is certainly the fastest growing component of out of home more broadly. And then within digital out of home, programmatic piece is even faster growing still. It is, I think, a little bit tough to come by reliable estimates, but my guess, and this is just a rough guess, is that programmatic digital out of home is kind of somewhere in the neighborhood of roughly $500,000,000 market in The US today. That's, of course, not including rest of the world that may perhaps double that. And it's growing at high double digit rates. So overall, out of home may be growing at low single digit. Digital out of home may be sort of low double digit growth, 10%, 12%, something like that. But programmatic digital out of home is going to be multiples higher than that, probably somewhere between 50100% year over year growth at this rate. You know, it's always hard to project out the future, particularly far out in the future. But if you look at how every other digital channel has evolved, and by that, I mean online advertising, mobile advertising and so forth, Programmatic has come to account for about 85 to 95% of how those channels transact. So personally, I don't think digital out of home is going to be the only channel that ends up bucking that trend, and for some reason not. You know, also achieving that that type of majority share of transactions. It is still, you know, relatively small today, 500,000,000 in The US, perhaps again, of a total $8,000,000,000 out of home market. But it is it is fast growing, and it is, you know, gaining the attention of new buyers. Right? So it's not just that more money is flowing in, but it's coming in from places that hadn't bought out of home before, and that's really exciting to sellers.
00:19:12 · Daniel Brown, Ari Buchalter
[00:19:12] S1: Well, it's funny you say that because even taking taxis and Uber in the last couple of years, I've noticed all these amazing advertising screens and interactive contents in the back seat where I can order products, and there's QR codes for my phone, and I get discounts, and it's it's blowing my mind, truly. Now with this growing trend, you know, we've noticed in digital signage in general, technology in business, now also in DOH. This ESG sustainability, accessibility, BEI, you know, these topics are growing thanks to pressure from consumers, industry, and the government. Yep. How can we build a programmatic DOH industry that is profitable, accessible, and maybe even aesthetic? [00:19:52] S2: So it's a great question. I think in some ways we are already doing some of those things, although I think we certainly have a lot more work to do in those areas. I'll give a couple of examples. Let's start [00:20:03] S1: with
00:20:03 · Ari Buchalter
[00:20:03] S2: sustainability. So digital screens, of course, avoid the physical waste that you have associated with printing and posting and taking down static ads. And of course, media owners who own those digital screens and operate those digital screens, they're inherently incentivized to minimize costs around things like power consumption for those screens, which themselves are getting smarter and greener every day. So I think there's already a good story to tell about the things that are organically happening in the digital out of home space from a sustainability standpoint. But as an industry, I think we do need to embrace the trend of actually measuring the carbon footprint of our media, which is something you're seeing happening a lot in other media channels, both because that kind of transparency is just the right thing to do. Right. You can't manage your manage your carbon footprint and reduce it until you actually measure it, but also because it's increasingly becoming an important decision criterion for buyers. Right. We're seeing more and more buyers care about and ask about the sustainability of their advertising efforts, right? How much power and how many cc's of carbon are associated with an advertising campaign, which may not be something you think about ordinarily, but the answer can be quite significant. So I think there's already a good story to tell, but more work to be done around that type of measurement and transparency. The other thing you mentioned or one other thing you mentioned was around DEI diversity, equity, inclusion. My view is that the strongest businesses are built on a diversity of ideas. And that in turn comes from a diversity of thought, diversity of experiences, and ultimately diversity of people. And I think out of home in general, in particular, that leadership levels in our industry, it skews a bit older white male. I am one of them, admittedly. And that's not something you can easily change overnight. I think what you have to do is look at your entire sort of people process from end to end, look at your hiring practices, look at how you train people, how you compensate people, how you promote people, and see where there may be biases in those processes that may be getting in the way of creating equal opportunities. It's not an easy thing to do.