The distinction between digital out-of-home (DOOH) and connected TV (CTV) advertising is becoming increasingly blurred as advertisers invest in small-screen formats at various locations such as gas stations, bars, and transit areas. According to our March 2024 forecast, DOOH ad spending in the US will grow by 11.2% this year, reaching $3.20 billion. This growth highlights the increasing appeal of video and programmatic formats within DOOH, including OOH TV (out-of-home TV).
OOH TV refers to small-screen formats, distinct from larger digital billboards, that consumers engage with when they are not at home. This segment is gaining traction within DOOH advertising due to several key advantages:
- Inventory Reliability: CTV OOH ads are delivered at specific locations, mitigating the risk of being shown on made-for-advertising sites.
- Cost-Effectiveness: CTV ads on OOH screens are more affordable. For instance, Bar TV ad startup Taiv offers costs per thousand (CPMs) of around $15, significantly lower than the rates for live sports ads.
- Contextual Advertising: There is substantial potential for contextual targeting. Ads in a sports bar during a Lions game, for example, could promote Great Lakes tourism, alcohol, or local car dealerships. Similarly, ads on gas station pumps during summer nights might feature cold energy drinks available in the convenience store.
- Venue-Specific Ads: Bars and venues can display their ads during TV commercial breaks on many of these platforms.
However, OOH TV advertising also presents certain challenges:
- Limited Scale: Ads are seen by fewer people compared to those served to households across the US, as they are restricted to specific locations.
- Targeting Constraints: Unlike CTV, OOH TV lacks precise customer targeting.
- Measurement Challenges: While QR codes can drive post-ad engagement, it is difficult to determine the exact audience in bars, venues, or gas stations unless immediate action is taken.
- Budget Allocation Ambiguities: It is often unclear whether the budget for these ads should be classified under OOH, CTV, or retail media spending, leading to potential budget allocation debates.
- Impact on Traditional TV Ads: Ads during live TV events by companies like BarBoards and Taiv reduce linear and CTV ad impressions, benefiting DOOH advertisers but potentially disadvantaging traditional TV advertisers.
