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Participating in the Digital Advertising Ecosystem

We have to get into the digital space because that’s where the dollars are. That’s the game, and we have to play by those rules in order to fit our media into that marketplace, says Andy Sriubas, Chief Commercial Officer, OUTFRONT Media.

By Sanjay Kumar & Pulkit Chaudhary

How do you see the world of advertising evolving in future?

The world of advertising is changing faster than it has at any time in the past. With significant developments in the data arena, the ability of advertisers to focus on, or target clients, is changing quickly. To start with, we know that cookies are going away. Now iOS and Android phones using SDKs in mobile apps to track location will require an opt-in permission, which significantly reduces the dataset available to third parties. Thus, it has become difficult to understand how to operate in an environment where ID and location are key components of audience targeting.

Moreover, GDPR, CCPA and additional regulations pending at the state or federal level are changing the dynamics of addressable advertising. While first-party owners of opt-in data will certainly have an advantage, everyone else is going to have their plans thrown up in the air. So, if you are a Google, Facebook, Amazon or a large weather app that has been granted permission for location, you may be able to use that data. However, many folks are searching for alternatives, and/or may use aggregated, anonymous information to fuel greater probabilistic modeling. The ability to promote and compare mediums in terms of value is very important. In this new world, we are losing the capability to do that easily — the market must evolve.

The advertising and marketing industry is moving towards digital. How are changes in the data ecosystem, especially those concerning ownership, making companies change their business models and workflows?

Every media publisher realizes that we have to get into the digital ecosystem because that’s where the money is. The digital ad space has been growing at 20%. Mobile ads alone will be almost $250 billion by next year globally. We have to get into the digital space because that’s where the dollars are. That’s the game, and we have to play by those rules in order to fit our media into that marketplace.

First, we have to have impression measurement — how many impressions were made at a location. Counts have to be granular enough to understand where people are and at what time they are there, so that we can post a message to them. All of this has to be done with full privacy protection. There has to be transparency in the system, so that we understand how we are collecting data and what algorithms we are using to extract projected and actual impressions. Then comes dividing that impressions data into different segments of audience, to help our advertisers in targeting. The third step is drawing a value matrix. Be it television ads, billboards or mobile ads, all have their respective value but are different. For instance, mobile ads are small format but clickable. TV has mass reach while billboards are unblockable, etc. So there has to be a value matrix to understand that if I buy impressions within those mediums, how do they interact with each other and how much should I pay for each of them.

The fourth step involves having a proper legal framework — a credible contract. We must be clear about contracting for a certain number of impressions over a period of time or covering a certain location. The fifth step is setting a financial framework. This means being able to account for activities and understand what we have delivered, what we have under-delivered, and what we have over-delivered. We have to ensure that we are paying all the players in a timely manner and are able to provide financial reports to all stakeholders.

The sixth step concerns infrastructure and technology investments. There are two parts to this, the first being the front-end planning and buying systems and the second being the backend technology — with the latter supporting the former. The last step is objective-based marketing, which requires a deeper understanding of client objectives and working with them to achieve their goals using these tools.

In order to participate in the digital ecosystem, we have to build our industry offerings along these lines. It’s interesting to note that it isn’t just about digital assets; even a poster billboard on a highway can be sold through a digital interface.

Will it be correct to assume that running an advertising company is all about setting data, technology and legal frameworks?

Amongst some other important things, I think you can say that. It’s certainly about using impressions data to plan and contract, the technology to enable it, and setting up a delivery framework to ensure that the creative follows the objectives of the contract. If you are buying OOH media, you may want to buy multiple locations over multiple periods of time, targeting audiences differently throughout their purchase journeys. It could be video, digital static, vinyl posters, in either smaller format or larger format. The logistics of making that work are significant.

GDPR, CCPA and additional regulations pending at the state or federal level are changing the dynamics of addressable advertising. While first-party owners of opt-in data will certainly have an advantage, everyone else is going to have their plans thrown up in the air

Since you are the Chief Commercial Officer, have you made changes in the recruitment process, and what kind of capabilities do you require in your team?

We must think about the future in all of our product offerings. Our product group saw the elimination of cookies and SDKs in mobile apps well before those announcements were made. Our Chief Product Officer once said that he felt “a disturbance in the force”. I loved that because only once you feel this market deeply, can you understand and appreciate what’s coming. That insight enables you to build accordingly, and drag your organization in the right direction, rather than having to play reactive catch-up to something that is a forgone conclusion. I want more people like that.

How has the COVID-19 pandemic impacted the customer behavior?

The changes brought about by the pandemic are not limited to advertising. Whatever technology we thought was going to be required and available in the next 10 years needs to be here in five. Today, consumers are used to buying quickly without cumbersome processes. They want immediate transactions, which means digital access, data and integrated systems are important. That ecosystem was maturing nicely — the pandemic just accelerated it. It’s like holding Zoom meetings. I thought that work-from-anywhere sessions might become routine in ten years, but because of Covid, we fast-tracked it all. It is an efficient way of getting big things done, with time and travel cost savings.

The same holds true for the advertising industry. We are stretching those muscles and trying to figure out what the next level is going to be. Since the buyers are likely to react quickly, they want to have more data to make better informed decisions. We have to figure out how to accommodate all those demands quickly, so that people can operate with tools from remote locations.

Today, it’s about buying the physical space in a digital environment. For instance, I may want to buy a poster billboard on a highway, but I would want to contract for it based on data and insights that are being provided to me through a digital interface. I would also want to be able to send my creative through the digital interface and understand how it performs through that interface

Do you think that this trend of people buying digital space rather than physical space is here to stay, or is temporary?

I think it’s more about buying the physical space in a digital environment. For instance, I may want to buy a poster billboard on a highway, but I would want to contract for it based on data and insights that are being provided to me through a digital interface. I would also want to be able to send my creative through the digital interface and understand how it performs through that interface, as opposed to two people sitting and exchanging photos. Everything has to be informed in an online environment. If someone has to print something to facilitate the static location, the digital interface will have to move a file to the printer as part of that process. It’s a relatively easy connection for that format. Everything will be delivered through the digital interface.

You talked about building trust and transparency. What kind of initiatives you are taking in your engagement with trade and marketing associations to strengthening people’s trust?

As you know, I chair the Media Rating Council’s OOH group and co-chair the Programmatic and Automation Committee of the Out of Home Advertising Association of America. In those roles, I work with colleagues from publisher businesses, vendor businesses and buyers, so that we can build this ecosystem together. We must appreciate all aspects of the process within a circle of trust in order to participate in the digital marketplace, which means building a truly transparent ecosystem. Everyone benefits, and we can only grow, if we have complete transparency throughout the buying process regarding data, pricing/value and reporting.

You are a big consumer of location technology. What kind of opportunities do you foresee by using this technology?

Location data is relatively new to our industry, and it is now important for us all to make informed value-based decisions. That becomes the foundation for the new world. In some ways we are still stuck in a traditional mindset because everybody likes progress but nobody likes change. The idea is to try to get people into a mindset where we use data to inform a location’s utility against a marketing objective. We must take on the challenges that will get us to that position — when we do, we will get a seat at that table where the biggest ad buyers make their decisions.

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