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Path to Purchase Institute: DOOH, CTV: From Something Old to Something New

At first glance, digital out-of-home (DOOH) and connected TV (CTV) advertising may seem to have little in common. But their combined resilience in a generally depressed digital ad market — spending in both categories jumped by more than 25% last year — tells a deeper story about how today’s marketers are adapting to changing consumer behavior in a cookie-less, multi-device world.

These two media channels are surging at a time when marketers are looking for new ways to connect with consumers in the post-COVID-19 pandemic era, and to fill gaps in ad tracking and measurement created by the removal of identifiers (including third-party cookies) from the system.

Digital outdoor ads, while by no means new, can leverage video and other technologies to create opportunities for data-driven marketing that do not exist for a static billboard. “Traditional outdoor ads are not super targetable or measurable, or affordable at scale. No one buys 200 markets of billboards,” says Sean McCaffrey, CEO of GSTV, which operates a video network at 28,000 convenience store fueling stations across the U.S. “We don’t sit on a large first-party data set akin to a large grocer, but there is a lot of data that brands and agencies already have to apply across our platform.”

McCaffrey says that marketers are shifting more dollars into DOOH from both legacy TV budgets and digital video. The latter category has suffered from ongoing concerns about quality of supply, including brand safety, fraud and measurement reliability. And he says marketers are increasingly thinking of outlets like GSTV as an audience-based, not just location-based, platform.

“Each fueling station is like an addressable household,” says McCaffrey. “The Upper Peninsula in Michigan in summer is a much different experience and audience than in January, because you have people going to their lake houses Thursday through Sunday and the population swells. Both are valuable, but how you want to target and who is different. Both the commercial time and content can be localized at a station level.”

CTV, meanwhile, is an inherently addressable medium that allows advertisers to deliver their messages to particular segments within the growing number of U.S. households that are choosing internet-based streaming services over linear TV. These are increasingly young and diverse incremental audiences that marketers cannot reach with traditional broadcast and cable TV alone.

Market projections for both categories reflect these trends. The approximately $20 billion global CTV ad market is expected to double by 2026 and account for 40% of TV advertising, according to eMarketer. In the U.S., DOOH spending is expected to rise from $17.8 billion in 2023 to $21.6 billion by 2027, according to Statista.

Retail Media and Connected TV

The last few years have seen a growing synergy between retail media and CTV. The rich first-party data sets generated by major retailer ad platforms add another layer of granularity to the CTV medium. Users must log in with their emails to access streaming services, and those authenticated user IDs allow marketers to deliver ads to households with a particular set of behaviors (versus legacy TV, which is bought against broad-based demographics). Now, with retailer data, a food marketer can more precisely target yoga enthusiasts who prefer healthier breakfast options and who bought plant-based dairy substitute products in the past six weeks.

“When you marry those authenticated users with retail data that is based on either transactions or loyalty card data, you’re able to get that one-to-one opportunity to find the exact people who are purchasing your product or who you want to purchase your product,” says Ellen Mulryan, senior director of retail data partnerships at The Trade Desk.

Brands can then use that same retailer data to help determine if exposure to the ad helped drive a sale. “What we do then is capture an anonymous ID that is a tie to that ad exposure,” explains Michael Greene, senior vice president of global vertical strategy at Criteo, whose platform powers advertising across both retail media and CTV. “Then we’ll go back and look at all the anonymous identifiers that are tied to transactions at our retail partners, and the products that were bought at those retailers, and say, ‘Did we find a match? Did the person who saw that ad for a diet soda then go buy a diet soda at Costco?’”

Such closed-loop measurement of CTV campaigns may further increase the channel’s appeal. A survey by eMarketer conducted in September 2022 found that higher-quality targeting data (47%) and more efficient buying/planning process (36%) were the top reasons cited by marketers to increase CTV ad spending, followed by efficiency frequency capping and transparent measurement (both 30%).

Indeed, CPG marketers in diverse categories — from petcare to skincare — are increasingly extending traditional campaigns into CTV. Last August, pet food manufacturer Stella & Chewy’s introduced its first national ad campaign, “All You Need Is Raw,” which included both cable TV and CTV spots as part of a sweeping omnichannel effort.

In early 2022, Neutrogena used Kroger’s customer purchase data for a two-month CTV campaign on Roku that targeted light or lapsed current buyers of the brand, as well as cleansing product category buyers that were new to the brand. The campaign achieved an 8% uplift in household penetration and a 5.5% increase in sales, according to the skincare company. Additionally, streamers exposed to the video ad spent 4.2 times more on Neutrogena makeup remover wipes than the average Kroger household.

“Retail media creates more accountability for CTV. It makes a historically upper-funnel channel much more lower funnel,” says Sarah Scherer, director of self-serve offsite media at Kroger Precision Marketing (KPM), the retail media arm of Kroger’s 84.51 data science and loyalty subsidiary. “It’s a lot easier to explain to your CMO why you’re investing dollars in upper-funnel channels when you can connect the impact of ads to real business outcomes.”


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