‘Programmatic is growing strongly in China’
By Rajiv Raghunath - July 31, 2019
Doug Pearce, CEO, Doohken Network, Shanghai talks about the DOOH business trends in China and the initiative to build China's first platform of prime location digital advertising sites
China’s digital OOH spends represent an estimated 25% of the total OOH spends in the country. In your view, what factors are contributing to DOOH growth in China?
We believe the China OOH market is around US$9 billon of which somewhere between 25% - 30% is what could be called digital. The overall OOH market is growing around 15% and most of that growth is in digital. Digital screens and spends are increasing at a faster rate due to multiple factors. Some are as basic as more availability of cheaper, higher quality screens; while advertisers want better audience engagement and impact from their creative messages, plus of course the introduction of new technologies. Another key driver is that most video advertising is now in shorter lengths, even 3-5 seconds, so video can now work effectively on digital screens to build reach for mass media campaigns.
We would expect that over the next few years Digital Outdoor spend will grow significantly while static outdoor, with the exception of large format billboard ads, will decline.
Do you see a new class of advertisers using DOOH media as opposed to the brands that had been advertising on classic media?
Definitely! As more and more time is spent on smaller mobile and tablet devices, using OOH will become more important for advertisers and brands to deliver a more impactful, brand message with a “WOW” factor than it has ever been. It is 1 to 1 communication and of course there will be no ad blocking. So, in the future we expect DOOH to be a must for all advertisers.
The introduction of measurement, data, accountability, targeting and automated buying like what we at Doohken are bringing to the market will also attract new advertisers as DOOH can become more of a performance media buy, with better, more engaging targeted creative, fast changeable creative. We will finally be able to have an ROI measure based on real data, not estimated or predicated data.
Adding AI and other technologies to OOH will create more interest from passing traffic in smaller format OOH attracting and retaining audiences, again making it a more desirable advertising option for advertisers.
How do you see Doohken Network contributing to the DOOH growth momentum? Is China ready for programmatic OOH?
What we at Doohken are doing is really game changing and in a way disrupting the market, but it is something that advertisers want. OOH is the last of the traditional media to digitise and along with that comes change.
Doohken is building China's first platform of prime location digital advertising sites through the supply of next generation technology for use in indoor and outdoor advertising screens.
Think of Doohken as an Uber, where we own the platform, technology and perform marketing and some sales functions while existing advertising screen location owners are like the Uber car owners.
Our platform starts with audience measurement and demographic profiling technologies. We categorise and measure audiences to ensure the most effective, targeted advertising campaigns can be screened to the right audience at the right time to improve advertiser ROI.
Adding measurement of each individual site will enable a value metric which will ultimately drive a switch from buying OOH in numbers or quantity to buying on quality. It will become harder for screen owners to attract revenue on poorly located screens without traffic counts.
Another key factor is that we believe the media buying market will shortly begin to move away from channel buying, to audience buying and be channel neutral. All that advertisers will want is to reach the right audience as cost effectively as possible, no matter what platform they are consuming media.
With bringing real time measurement and programmatic buying to the market we think Doohken is well placed to create a demand for our platform. Demand from advertisers who want accountability, screen owners who want new and more revenue and the DSPs who want to provide a full media offering and the broader data integration.
Programmatic is growing strongly in China and our discussions with global and local major DSPs have been very positive. They are ready for us when we are ready for them, which will be around September.
What were the challenges that you faced in developing a media platform for networked digital screens business?
Obviously there have been multiple hurdles that we have overcome to get the technology built and as we are building a total platform; including measurement, creative ad-serving, buying, scheduling, finance and post analysis capabilities we have had to cover a lot of ground. We’ve now tested it over the last few months and we are now moving to screen installations.
Ensuring we fully comply with China and global privacy and data legislation has been our number one priority and something that we have achieved. All data is anonymous and aggregated. We don’t take photos, track mobiles or Wi-Fi or for that matter obtain any personal data whatsoever. We are GDPR and China legislation compliant.
With the technology working and compliant, the other key challenge has been getting screen owners to accept that an industry that has served them well for many years now, needs investment in new technologies and screens to move into the future. This was actually the same “we’ll be okay” attitude that traditional media adopted when digital first arrived and also, in a way, the same as what both creative and media agencies said in the early digital days too. An almost “invest or perish” attitude is required as the market change won’t be stopped, it is a matter of “when, not if”.
Any suggestions that you would like to provide to organisations wanting to build similar platforms in other Asian markets?
Given the complexity, time and cost involved in building a 360-degree platform like Doohken, the best advice I could frankly give is to contact us. We are currently looking for partners who can help to roll out our platform across Asia.
That might sound bold but someone starting out on a similar journey will potentially be years away from launching and they might miss the single biggest change to happen to the outdoor advertising industry in history.
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