The Pivot

By Stephen Freitas | Often changing market conditions, particularly the technological capabilities of the time, serve as the catalyst for a pivot. Although pivots may sometimes be indicative of a business in trouble, they are not a sign of failure. Rather, a pivot could represent a business or industry making a proactive and strategic decision to increase its chances of success.

Sometimes competitors will force a company’s hand to pivot, and sometimes a change may be driven by internal factors. A pivot can be subtle, like expanding the target market for a product or service. A pivot can be extreme, like changing the fundamental products or services around which a business exists to provide.

The out of home (OOH) industry is ideally aligned right now for a pivot. In fact, a pivot is overdue. For many years, industry stakeholders have seemingly wrung their hands at times, searching for the spark of inspiration that would finally grow market share. Mostly repeating old tactics has been the chosen approach with little appetite for diverging from what made the OOH industry great in the past. But the media business has fundamentally changed, and the OOH industry has not kept pace. In the US, digital media represents 60 percent of market share while all other channels decline. OOH share remains locked at 4 percent or maybe less.

One of the best examples of a successful business pivot is Netflix. The company started as a mail-order DVD service. Blockbuster for the delivery generation. However, unlike Blockbuster it kept both eyes on technology development and soon began offering consumers a way to download and stream its content. Then Netflix realized studios could cut out the middleman and stream content directly to viewers, so it pivoted again by making its own content, films, TV shows and documentaries.

Netflix’s ‘pivot’ was truly about staying in tune with its customers and technology. Adapting its distribution channel and taking full advantage of the data it held has driven Netflix’s market value to over $430 billion. The OOH industry could learn from the Netflix example. In fact, I used technology to identify a path forward for the OOH industry. I asked ChatGPT the question, “How can the OOH industry pivot like Netflix?” Here is what the AI engine said, verbatim:

The out-of-home (OOH) advertising industry can pivot like Netflix by embracing data-driven, digital, and personalized experiences. Here’s how:

1. From Static to Dynamic Content. Just as Netflix moved from DVDs to streaming, OOH can shift from traditional billboards to programmatic digital screens that change based on real-time data, such as traffic patterns, weather, or audience demographics.

2. Subscription-Based Advertising. Netflix disrupted media with its subscription model, and OOH could offer monthly ad slots where brands pay for flexible, data-optimized placements instead of fixed, long-term contracts.

3. Hyper-Personalization. Netflix’s recommendation engine suggests content based on user behavior; OOH can leverage AI and mobile data to serve hyper-targeted ads, adapting messages for different audiences in real-time.

4. Content + Advertising Fusion. Just as Netflix creates original content, OOH companies could partner with brands and media creators to develop interactive storytelling experiences using augmented reality (AR), QR codes, or mobile engagement.

5. Measurable Performance Metrics. Netflix uses viewer data to refine its offerings; OOH must improve attribution models by integrating mobile tracking, geolocation, and audience analytics to prove ROI and make campaigns more effective.

By shifting towards a tech-driven, audience-centric approach, OOH can become as adaptable and powerful as Netflix in the digital age.

That’s a lot to consider. But it’s spot on! It’s time to stop kicking the can down the road. Address the elephant in the room. Face the 900 pound gorilla. Use any idiom you want. Regardless, it’s time to act differently.

To grow share there is only one path forward and that’s to follow the lead forged by the digital business. Become digital. Follow the examples of the 60 percent market share leader.

The truth is local businesses will continue to buy OOH media in the same ways as in the past. But real share shift requires increased buying from national and regional brands. To achieve this loftier goal, the OOH industry needs to serve the needs of brands in a way consistent with how brands evaluate and buy media today. That will require a substantive technological transformation. Without the desire to make this change the industry should be content with its 4 percent market share because momentous growth really isn’t possible without a pivot.

Borrowing the title from 2023’s Oscar winning Best Picture, Everything Everywhere All at once, there are three essential areas where the OOH industry should concentrate efforts to make a necessary pivot that will influence share growth in a meaningful way. These areas are digital, data, and demand.

Digital Everything

OOH industry stakeholders should consider how much and how fast static inventory could be converted into digital assets. The only endgame for the OOH industry is to eventually reach complete digital coverage. That’s a daunting task and one that may take another century but, it is the only eventual outcome. OOH assets have been slowly converting to digital displays for twenty years. The fundamental question is not if faster digital conversion is possible but how can conversion be accelerated?

Some people will argue OOH’s big, beautiful canvas is valued. Certainly, there will always be a place for a spectacular wall mural in a busy city center. But that’s a stunt. OOH’s bold canvas has been used for stunts for decades. The goal should be making OOH a valued and consistent part of many major media plans. To achieve this requires the industry to offer brands a vast network of digital assets aligning with the strategies of a digital-first media age.

Brands today don’t need big and bold impressions as much as they need flexibility and data integration. Before the digital age, traditional forms of advertising included OOH, print, radio, and television. Print, radio and television have pivoted becoming sources for online content, streaming audio and CTV. OOH has been slower to embrace holistic digital integration.

Naturally, change of this magnitude cannot happen overnight. How much OOH inventory could be converted to digital over the next decade? The next two decades? Could the mix of OOH assets be reevaluated and reconfigured? With digital come multiple ad spots at a single location. Does a digital-first industry need roadside posters? Could posters be traded for new digital bulletin locations? Smaller formats could be converted more quickly than roadside inventory. Why have static airport, subway and mall displays persisted? If it’s not feasible to convert some assets to digital, should they be phased out altogether? These are tough questions an industry should ask together.

Despite hesitation, digital transformation has occurred relatively quickly in other parts of the world. In the UAE over 70 percent of OOH revenue comes from digital inventory. The numbers are similar in the UK and Australia.

OOH’s first and most important evolution is digital transformation because the other two pillars for change, data and demand, cannot be achieved without digital everything.

Data Everywhere

Digital media utilizes live data to dynamically adjust ad targeting and delivery based on current audience activity, such as location, to display the most relevant ads to an audience, maximizing the chances for engagement and conversion. Algorithms analyze live data which allows advertisers to optimize campaigns in real-time, improve attribution models, and prove ROI. These are all important reasons why brands select media options that provide the right data that fits their specific evaluation criteria. Through Geopath and other sources, the OOH industry has provided some data for many years. But is it the right data? Is it the type of data brands need to adequately evaluate OOH media in a way that fits their own tools and models? Generally, no.

In early 2000, the OOH industry determined a collective need for audience ratings. None existed before. From that moment, the industry has advanced several approaches to audience measurement, resulting in various degrees of success or failure.

Over many years, the OOH industry has modified measurement objectives as approaches have been restructured and models were tweaked. But some underlying problems have persisted.

In 2000, the gold standard in media measurement was the Nielsen TV model and that’s essentially the approach the OOH industry used when constructing audience ratings. But digital is the better model today.

Nielsen data originally focuses on measuring television viewership across a representative panel of households using devices, providing a broad picture of audience demographics. Digital or trading desk data provides granular insights about ad performance and audience targeting based on real-time data collected from various sources. In turn, brands and their agencies use the granular data within their own models to build ad campaigns. If data isn’t provided in a way useful to brands, they won’t use it. That’s why television data has evolve mimicking digital’s approach and so have many other media channels. Geopath and the OOH industry have certainly evolved data modeling over time. Is it enough?

Of course, more granular data has a higher cost and that’s something the OOH industry will need to address head-on. Building a measurement approach that proves outcomes like digital isn’t easy or cheap. It requires a fresh approach.

Keep the parts of Geopath with value. The fact is brands don’t really care about third-party impartiality as much as they care about analyzing the right data that fits their needs. Where they get it is less important.

The industry should consider outsourcing measurement functions to commercial enterprises where it makes sense, while leaning into the MRC accreditation as a guidepost. Ensure the industry is measuring the right things like cohorts not locations. Transact using real-time data to support optimization and attribution objectives. Willingly pay more for the right measurement approach and alignment to foster omnichannel compatibility.

Demand All At Once

While the OOH industry has gradually begun to embrace programmatic principles of selling, it has not been nearly enough. Programmatic advertising has rapidly taken over most digital transactions, steering marketers and publishers to a more AI-powered and data-driven future of selling and buying ad space. Of the many digital advertising trends in the marketplace, programmatic is perhaps the most consequential, given it’s projected to generate over 80 percent of all digital advertising revenue by 2028. (Disney will move to 100 percent programmatic ad sales by 2027).

Automated transactions can eliminate the need to manually contrast different ad options or contact different media companies to negotiate prices, (something media buyers do not want to do), since the entire ad buying process is automated. As a result, ad buying takes less time and is devoid of human errors. Most important to brands and agencies is how automation allows real-time adjustments to ads, optimizing impact and efficiency while a campaign is active. OOH metrics do not offer the marketplace this data quality today and the discrepancies will only widen as AI technology continues to transform the media business.

AI is already having a profound impact on society and the advertising industry. Its full implications are not yet understood. Machine learning, which enables AI to self-learn and improve by accumulating data is already revolutionizing many governments and industries including the media business. AI’s capability to analyze and interpret massive amounts of data in real-time is perhaps the most profound aspect that will influence advertising. With AI, a brand will leverage existing marketing data to predict customer behavior. With these insights, AI makes it easier for marketers to run personalized ad campaigns that target the right audience, better design impactful ad messages, and help foster deeper connections with customers.

For the OOH industry to fully enable automation and AI enhanced tools, the industry must be willing to make all available inventory discoverable. Loosen the grip. Only by making this leap of faith can the OOH industry unlock the tremendous potential of programmatic connections. This will lead to something bigger. It won’t bet a race to the bottom but the best course for optimizing inventory to maximize revenue potential. Selling more spots with every passing millisecond is the goal.

Through my work at OOH Capital, I’ve seen the unbridled potential of programmatic selling work effectively for digital retail networks. When all available inventory for a fully digitized network is made available to buyers through programmatic exchanges, it’s like turning on a water spigot. The money keeps flowing in from all directions. The entire OOH industry could benefit from transparency and access. The only question is whether the OOH industry is ready to give control to technology?

The secret to unlocking the fullest possible potential of the OOH business is the interoperable matrix comprised of digital assets calibrated with real-time insights delivered spontaneously and all at once. It’s a three-part equation with each coefficient dependent on the strength of the others.

Digital assets are the instruments used to embody live data which in turn, is a requirement for optimizing campaigns in real-time to facilitate automated transactions. Automation is the mechanism that harnesses the efficiencies of digital networks, and the circle is complete.

Some people may not like change. Some won’t want to change. That’s alright. The OOH industry has been successful for more than 100 years and success will continue for now. Most likely with a diminishing 4 percent market share over the coming decade as digital media devours more ad share. You could leave the hard choices to your grandchildren. Or pivot.