Dare to Digitise in OOH to Drive Profit
A new study aggregating econometric model evidence over five years for Out of Home (OOH) across 112 brands highlights the profitability of OOH and Digital OOH (DOOH) campaigns as the medium achieves critical mass in terms of reach, audience and location.
Results from the study showed that DOOH delivers strongly against its premium price point, with significant increases in campaign profit seen when campaigns used a higher share of DOOH. We found that profit return increased by 11% for each 10 points of DOOH used as a percentage of OOH. This equates to an incremental ROI of 46p for every £1 spent. In other words, if you increase your digital share of OOH budget from 60% to say 70% you would expect a 22% increase in profit.
Other insights found:
1. The optimal level of OOH – where profit return is maximised – is 17% of media spend.
2. DOOH’s optimal level is an OOH share of 57%, which continues to pay back for brands to 100%.
3. Large format OOH campaigns can “dare to digitise” and deliver higher profit returns at 100% DOOH.
4. For non-TV spenders, DOOH is essential to drive profit; DOOH also drives higher levels of profit return at higher share levels.
The results reflect the increased impact made by Digital OOH as media owners invest in more, higher quality screens across more UK locations targeting higher volumes of people.
Emily Alcorn, Head of Insight at Talon, comments: “As Digital OOH has expanded quickly, this has led to some questions around justifying screens’ perceived ‘premium’ price point. The results show that advertisers can be much braver in their use of OOH, but in particular using reach-building, high impact digital formats, that are genuinely delivering profit return for their campaigns.”
“In an industry obsessed with hard metrics, being able to assess the long-term aggregated impact of OOH spend and evolving effectiveness in indispensable. It’s also critical to establish how DOOH delivers its value in terms of generating profit, giving clear bottom line responsibility.”
“The project evaluated the role of DOOH by format alongside its ability to work well with other channels and impact the effectiveness of the entire media mix. Each campaign case was matched to data from Talon with the cost of each classic and digital panel. Analysis took into account an average weekly cost for size, format and environment of the panel and was adjusted for the campaign duration. Using sales data, a campaign profit ROI (PROI) has also been generated to help calculate the contribution of OOH and in particular DOOH, at different spend and contribution levels.”
“With such persuasive results it’s incredible we’re not more widely recognising the effectiveness and reach benefits of DOOH, particularly as a key part of integrated media plans.”
Sally Dickerson, CEO of Benchmarketing, commented: “The nuanced effect of OOH is rarely measured in marketing media mix (MMM) studies, however it is undoubtedly there. Working with Talon we set out to prove DOOH’s value and were able to robustly model, using meta-analysis, the campaign and channel ROIs. The campaign results were excellent, demonstrating not just the impact that digital has on OOH effectiveness, but how OOH and content/context synergises with other brand channels to amplify campaign effects.”