Out-of-Home Media Now and Tomorrow

Christof Baron

Berlin, June 20, 2013

Agenda

1/ Out-of-Home media – todays perception and planning

practises

2/ Our market - key trends

3/ How we change our business

4/ What we expect from OoH vendors

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Out-of-Home Media Todays main perception…

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Out-of-Home Media Todays main perception…is changing

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High quality positioning + Video + Interaction

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Some fundamental issues

Business is driven by specialists - limited

information about all potential OoH options

Choice of different options within OoH

often more a result of personal preferences

than of detailed knowledge

Decisions in OoH media are often based on

pure tactical decisions, not on the basis of

a strategic framework

Lack of knowledge / data regarding

optimal performance levels

interaction with other channels

RoI contribution

WHEN YOU ASK MEDIA PLANNERS ABOUT OOH

?

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Some fundamental issues

Black box in the process between

planning and implementation / buying

Very limited flexibility – if a campaign is

booked the money is locked

Delivery of performance / controlling

not sufficient

WHEN YOU ASK MEDIA PLANNERS ABOUT OOH

Our market – key trends

Fundamental change of our industry

The advertising industry is still

on the way of fundamental

transformation – and the speed

of change will not decrease.

The digitalization of our industry

has just started!

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Transformation

The transformation has an

impact on everything and

everyone in our industry –

clients, ad agencies, media

agencies, vendors, tech

companies, talents, the value

chain …

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Data

Automation and speed become

critical success factors.

“Big data” creates a new

dimension in the way how

consumers can be addressed in

the future - faster, targeted and

context-neutral.

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Engagement economy

Consumers change their

expectation towards marketers –

and they talk actively about

experiences and perceptions of

products and services.

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Brand experience

In a more fragmented world,

brands need a strong and

distinctive identity towards

customers in their social

environment.

Creativity is key for a successful

break-through communication.

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No limits

The increasing mobility is a

global megatrend – more people

are travelling more frequently.

Mobile communication devices

offers the modern society

unlimited access to all type of

content, media, friends, brands -

and to a “glocal” shopping mall.

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2011

The triumph of screen media

1920 1940

1925

FERNSEH-

TECHNIK

1950 1960 1970 1980 1990 2000 2010

1923

FIRST

PUBLICH

RADIO

STATION

1930

SOUND FILM 1924

1947

TRANSISTOR-

RADIO

PUBLIC

TELEVISION 1952

1969

VIDEO-

RECORDER

VIDEO

-GAMES 1972

1979

WALKMAN

COMPACT

DISC 1982

1989

WORLD

WIDE

WEB

SMS

QR 1994

1998

1996

FLASH

TECHNOLOGY

1997

AOL

INSTANT

MESSENGER

MOBILE

ADVERTISING 2000

FACEBOOK

MYSPACE

LINKED IN 2003

2004

HIGH

SPEED

BROADBAND

INTERNET

2005

2006

2007

IPHONE

2010

IPAD

2012

2011

APPLE TV Connected and addressable

Advertising investments

The marketing budgets for

traditional campaigns are

stagnating – or decreasing,

while investments in digital

media - including owned media -

are further growing.

IP based delivery of commercial

communication on screen and

connected media is the winner

within this unfair competition.

Traditional media are in a crisis

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0

100

200

300

400

500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ad Spendings Net as Index: 2002 = 100

Online Media

Measurement

Traditional media KPIs will lose

dominance – much harder,

performance driven measures

get a greater relevance

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How we change our business

The Adaptive Model

From: Binary Approach to Media To: Connected Approach to Media

Brand or demand campaigns Leading consumers from brand to purchase to advocacy

Campaign KPI’s Establish KPI’s for each channel across all media

Planning paid in isolation from owned and earned Maximizing earned by planning it with paid and owned

Offline channels, online channels Planning for a multi-screen experience

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PLAN

A change of the traditional planning concept

The Adaptive Model

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From: A Passive Consumer Purchase

Funnel

To: Dynamic Consumer Journeys

Targeting a consumer

Contextual media plans

Buying media sites

Advertisements

Distributing ads

Targeting niche audience segments

Behavioural targeting rules

Buying audiences

A library of advertising assets

Dynamically assembling advertising assets

A change of the traditional planning concept

The Adaptive Model A change of the traditional planning concept

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From: A Monthly Report To: Real-time Optimization and

Experimentation

One-off A\B tests

Post-campaign analysis

Last-click wins

Continuous, comprehensive testing program

Always-on optimization of performance

Fair credit based on attribution modeling

BUDGET PLAN BUY OPTIMIZE DEVELOP

ADAPTIVE

MEDIA

RULES

Plan

Buy

Buy Optimise

Plan Optimise Buy

Optimise Plan

What we expect from OoH vendors

The new world order Recap

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Adaptive + Data Connected Addressable Screens Mobile

Measurement + KPIs

The good message OoH is on the way to successfully re-invent the business…

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BUT IS THAT TRANSFORMATION ENOUGH?

„printed“ to digital static surface to video passive to interactive

and connected

single message to

flexible messaging

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What OoH vendors / specialist companies need to do

ADAPTIVE

better targeting

higher flexibility

point of interactive should be seriously taken – more efforts to create interactive solutions

strong expansion of “digital on the road”

EFFECTIVENESS

better proof of advertising effectiveness, especially in the mix with other media

improved data for campaign evaluation required, and much quicker

proof of interaction with other media

“hard” KPIs

EXPECTATIONS OF MEDIA PLANNERS

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What OoH vendors / specialist companies need to do

PRICING

higher transparency needed

realistic pricing – premium pricing

is ok for high quality sites, but it

should be a clear rational behind

pricing strategies

Still, affordable pricing required

for “bread-and-butter-campaigns”

becomes critical, if effectiveness

data are not sufficient

EXPECTATIONS OF MEDIA PLANNERS

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booking / cancellation deadlines

to be optimized (CLP/CLB)

greater flexibility in the way of

planning / buying poster networks

improved evaluation data

higher transparency, better

documentation of activities

BUT STILL SOME BASICS TO BE DONE

“While agencies, planners and

clients have “emotional” relationships

to some media channels because of

personal experiences, it is hard “to love” a

special site.” - A media planner

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The emotional challenge

Thank you!