The rise of programmatic out of home

The 2014 Automated Trading Debate asked if all media will, in time, be traded programmatically – here, Primesight’s Mungo Knott examines the challenges and opportunities it poses for out of home.

It was Charles Babbage back in around 1837 who began work on what nearly 200 years later in adland we refer to as ‘programmatic’. That is an output calculated according to a set of rules, which references input data and produces its results at the push of a button.

The modern day instantaneous Search, Assess, Decide and Execute process of online trading is growing from this early seed and creating a new and challenging way of working.

The stock exchange has of course been a pioneer of many of the principles of programmatic trading including the introduction of electronic quotation and electronic communication networks in 1969.

So why, with these practices developing some decades ago, has it taken media buying and selling another 40 years to catch up? Not because it was too complex, but because there wasn’t a perceived need.

Indeed, the focus was more aligned to building in complexity of segmentation and valuation; these required different skill-sets and established new revenue streams that led to the growth of separated media agencies.

Fast forward to our current world and the quantity and complexity of data available when trading online advertising space has outstripped the ability of any individual team to manage the four part process.

The need has now been established and in keeping with ‘The Babbage Principle’ we have understood the commercial advantage of a division of labour between man and machine. The skill sets now being sold are more those of the machine and not so much those of the man.

The out of home industry is also beginning to wrestle with these same principles. A medium traditionally reliant on the knowledge of valued individuals to Search, Assess, Decide and Execute a purchase of poster panels, is now faced with two opposing pressures of speed and data.

Firstly – speed. Advertisers want to react quickly and efficiently. Like a good primary school reception class teacher, the results of today should influence the activity for tomorrow. Out of home can only be a part of tomorrow’s activity if the search and execution process can take place quickly enough.

Secondly – data. Out of home has created in ‘Route’ a core data set, which has expanded the amount of information that can effectively influence the assessment and decision process. Combining this with additional data sets such as mobile, transaction, lifestyle, and presence, again leads to additional layers of complexity.

As with online the amount of data available is beginning to outstrip the ability of any individual team to manage it manually.

These demands of increased speed and more data can be effectively channelled by the industry into creating a better communication channel for advertisers. It has also demonstrated the need for out of home to embrace a more automated/programmatic approach to the buying and selling process.

Before we flick the switch however, we need to embrace four core principles embedded in automation and programmatic.

1. Inventory data structure. We need to standardise the data form that the core inventory is held in. This will enable consistency in the transfer of data between parties.

2. Inventory access. Media owners should provide more open access paths to inventory availability enabling faster search and assessment.

3. Pricing mechanics. We could realise significant efficiencies by creating a common approach to key pricing metrics. These would incorporate Route data as well as associated drivers of value such as proximity to points of interest, and impact value.

4. Content delivery. Specifically related to digital infrastructures, there is a need to provide a coordinated approach to facilitating the traffic of copy from origination to display as well as a uniform data string for play out reporting.

The combined effect would be to bring our approach to transaction, valuation and execution up to date. It does not mean that we need to progress directly to a programmatic trading infrastructure. Neither does it presuppose a demand or supply platform but it would provide the base for significant automation and the opportunity for future programmatic integration.

These key steps are not easy to achieve, but without them we will become increasingly isolated from the execution and transaction behaviour, which is changing our industry.

What we need is to be technologically fit for the future. The long arm of Babbage has reached outdoor, and we should shake its hand firmly.

Mungo Knott is marketing & insight director at Primesight.