2016 Location Trend Report

CMO Insights Series

Why Location Is the New

Currency of Marketing
Reaching Active Consumers Using Digital Out-of-Home
and Location-based Mobile Platforms

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Executive Overview

Ask any CMO about the pressure to deliver good results, and theyll tell you
that the only good result is the one thats better than the previous months result.
This ongoing, results-driven treadmill has made advertisers less adventurous.
And for many marketers, being risk averse has worked to their advantage.
But in todays marketplace, staying with the tried and true may be
the riskiest move of all.
Finding effective ways to reach consumers has become
the biggest challenge facing advertisers today.
Traditional methods of advertising are becoming less
effective as consumers are no longer spending time
in places where marketers have traditionally had an
advantage in reaching them. To recapture attention,
advertisers are forced to navigate through a complex
media landscape in pursuit of an often distracted and
unreceptive consumer.

spend more than 70% of their time outside their home,

driven in part by greater access to mobile devices.2
Increased mobility is providing new opportunities for
marketers, which is why location has become the new
currency of marketing.
This report is aimed at brand marketers, media strategists,
and planners who are looking for new ways to break
through and reach on-the-go consumers using
nontraditional marketing methods.

As a society, we have become more mobile and were

living in closer proximity to each other. According
to a recent report from McKinsey Global Institute,
more than 80% of citizens in the United States live in
large cities.1 This trend, known as urbanization, has
accelerated as opportunities for jobs, education,
housing, and transportation improve life in most
urban areas.
The advent of mobile technology combined with
ubiquitous connectivity has radically changed
consumer behavior. We are no longer tethered to
fixed locations. Americans today spend significantly
more time outside of the home and workplace than
just a few decades ago. According to the Outdoor
Advertising Association of America, people now

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The Connected Consumer:

Distracted and Unreceptive
Consumers are demanding greater value from
advertisers in exchange for their attention, and
advertisers are demanding greater proof that their
dollars are reaching the right audience. As platforms
increasingly diversify, delivering targeted brand
messages becomes more difficult.

than 400 hours of video are uploaded each and every minute
and viewed by more than 1 billion people worldwide.7

Declining Effectiveness: A Multifaceted Problem

Most methods of advertising decline in effectiveness
over time, according to Tim Hwang and Adi Kamdar,
researchers at the Nesson Center for Internet Geophysics.
Their study, The Theory of Peak Advertising and The
Future of the Web, examined the declining value of display,
search, and mobile advertising and its potential impact
on the structure of the web, and found that most
current online business models were unsustainable.8

Consumers are no longer receptive to advertising and

are actively filtering out unwanted content through
mental firewalls, banner blindness, and ad-blocking
software, rendering most online advertising ineffective.
Nearly 70 million Americans will use ad-blocking
software in 2016, representing about 26%
of all U.S. Internet users, according
to eMarketer. In 2017, eMarketer
is forecasting that more than
86 million Americans, or 32%
of all U.S. Internet users, will block
online ads.3 Approximately 22% of the worlds 1.9 billion
smartphone users, or roughly 419 million people
worldwide, currently block advertising on their
mobile devices, according to Pagefairs 2016 Moble
Adblocking Report.4 Both mobile web and in-app
ads can now be blocked, which calls into question
mobile advertisings long-term effectiveness.

Part of this decline is due to changing generational

attitudes toward advertising. Younger generations are less
receptive to advertising and theres increased consumer
fatigue to brand messaging. Online advertising is also now
measurable in ways that were once impossible compared
with the earlier days of print and television.
Measurement is a double-edged sword, according to
Hwang and Kamdar. On one hand, it makes evaluating
success more clear; on the other, it makes failures more
obvious. As the effectiveness of online advertising continues
to decline, the obviousness of that decline may make the
market for those ads disappear more quickly than they
might have in the past.

The pendulum is also shifting away from traditional

TV viewership. According to Accenture, television
viewership has declined more than 10% in the United
States across all age groups.5 Consumers move from
device to device, shifting from one digital screen to
another, making it difficult to track viewing behavior.6

The effectiveness of online advertising has decayed every

year since the first banner ad was introduced. For example,
in 1994, a banner ad on HotWired reported an incredible
clickthrough rate (CTR) of 78%. By 2011, the average CTR
for a Facebook ad was dramatically lower at only 0.05%.9

Mobile devices now allow content to be consumed

anywhere and everywhere, and the world is now
awash with content. According to YouTube, more

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CMO Insights Series

Effectiveness has also declined for other digital

marketing platforms such as email, online search,
and in-app mobile advertising. The bottom line is
that once the novelty wears off, engagement drops
off as well.

advertising in 2013, is rejecting nearly 85% of all ad

impressions because the impressions were found to
be fraudulent, unsafe, non-viewable, or originating
from unknown sources.11
When we think about all of the challenges marketers
experience navigating their brands through the
digital ecosystem, its not surprising that theyre
looking to shift their ad spending to
more effective alternatives.

The problem with online display advertising is

compounded even further by reports of online fraud
and viewability. Its estimated that $7.2 billion of
advertisers budgets will be wasted by click fraud in
2016, according to a study by the Association of
National Advertisers and White Ops.10

In the quest for ROI, perhaps its

time to stop thinking screens, and
instead, start thinking locations.

A recent article in AdAge found that Kraft, a major

brand that spent more than $35 million on internet

Tandem Platforms: Leveraging the Moment

targeted messages in venues such as transportation
hubs and shopping centers. DOOH networks are
location-based businesses. Every digital display
public or privateis tied to a physical location, and
that location is attached to a specific IP address.

To deliver messages that resonate, marketers should

respond to the uniqueness of the moment that
consumers are in by connecting a benefit or point of
interest tied to location. Combining lifestyle interest
with location enables marketers to respond to the
uniqueness of the moment with immediacy
and relevancy.

Similarly, location-based mobile (LbM) providers have

the ability to triangulate a mobile devices location
within a specific radius and push content and promotions
that are tied to active locations. Location-based mobile
campaigns can drive foot traffic to a nearby retail
location, or even target a competitors location.
When combined, these tandem platforms provide
unique synergies for marketers.

Active consumers spend money, and while theyre

going about their daily routine, theyre also actively
searching for information. According to Google,
4 in 5 consumers have used search engines to find
local information while theyre on the go.12 Its at
this precise momentwhen consumers optimum
receptivity is piquedthat they are open to receive
branded messages.

Both location-based mobile advertising and digital

out-of-home media share similar targeting and audience
capabilities; however, both mediums are only as effective
as the on-screen message relevant to the environment.

Two platforms, digital out-of-home media and

location-based mobile marketing, are proving highly
effective at reaching on-the-go consumers. Digital
out-of-home (DOOH) media utilizes strategically
placed, networked digital signage displays to
reach active, on-the-go consumers with highly

2016 Location Trend Report

CMO Insights Series

Tandem Platforms Reach On-the-Go Consumers

PLATFORM

DESCRIPTION

VENUE

BENEFIT

OFFER

DIGITAL OUT-OF-HOME
NETWORKS (DOOH)

DOOH utilizes strategically

placed, networked
digital signage displays
to reach on-the-go
consumers with highly
targeted messages

Transportation hubs,
shopping centers, hotels,
movie theaters, stadiums,
arenas, restaurants, gas
stations, hospital waiting
areas, and college
campuses

Highly targeted reach

and demographics
based on time and
location, constantly
replenished audience
all day long in hightraffic, brand-safe
environments

Delivers relevant
information and
offers tied to specific
locations and on
consumers pathto-purchase; high
visibility thats
always on

Offers and information

are pushed to mobile
devices based on
proximity to a location
or GPS radius

Highly targeted
messaging uses
geo-location that
captures on-the-go
consumers attention

Delivers relevant
information and offers
tied to a specific
location and brand
promotion

LOCATION-BASED MOBILE LbM marketing delivers

offers, promotions,
(LBM) MARKETING

and content tied to

an opt-in users profile
and current GPS location

The true impact of DOOH media on consumer behavior

is becoming evident. Research by the Outdoor
Advertising Association of America (OAAA) has revealed
that consumers are more likely to go online with their
mobile device to engage in social media, search, and
shop within 30 minutes of seeing an out-of-home ad.13

There are more than 164,968 billboard locations across

the United States, and according to the OAAA, 6100
have been converted to digital as of February 2016,
leaving plenty of room for additional growth.15

Digitization is transforming the out-of-home (OOH)

advertising space into a vibrant new media channel
(DOOH), providing advertisers with greater flexibility
and location-based relevance to deliver messages that
are unmissable and unskippableand brands are
taking notice. According to eMarketer, advertisers in
the United States spent $2.96 billion on DOOH
advertising in 2015. Digital represented more than
40% of total out-of-home ad spending, up from 38%
in 2014. By 2018, DOOH media is projected to capture
53% of total OOH ad spending in the United States,
or $4.08 billion.14

The ability to trigger dynamic content on DOOH screens

is bringing greater engagement and relevancy to outdoor
advertising campaigns. Sensors can now drive campaign
creative by reacting to external information and evolve
on-screen messages using inputs such as temperature,
pollen count, precipitation, wind speed, or other data.

Data-Driven: Relevant and Immediate

Real-time data, such as pricing changes, geolocation,

audience demographics, time of day, and social media
feeds are also being used to dynamically change on
screen campaign content. Adding interactive technologies
to a brand campaign increases engagement and
message retention. If consumers have an opportunity
to interact with a brands message, they are more
likely to remember it.

The digitization process has reached critical mass,

with more than 1.25 million active digital out-of-home
screens in shopping malls, airports, cinemas,
convenience stores, gas stations, and stadiums.

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CMO Insights Series

Digital Out-of-Home Media:

The Amplification Channel

For example, Liveposter, a dynamic out-of-home

provider, developed a campaign for Cortana, a voiceactivated personal assistant from Microsoft, which
combined audience and location data to dynamically
update screen content. The campaigns creative
combined specific screen location with time of day
in order to demonstrate in real-time what an actual
Cortana end-user experience feels like. The campaign
displayed location-specific welcome screens and
end screens across more than 240 screens in central
London.

Digital out-of-home advertising is not a replacement

for television; instead, marketers should think of digital
out-of-home networks as an amplification channel that
is complementary to traditional media. DOOH media is
a reach extender, helping advertisers to connect with
consumers throughout their day rather than concentrating
promotion into a few hours during primetime television.
Digital out-of-home advertising can also be used as
a more cost-effective alternative to television, particularly
for local advertisers who are looking to reach a specific
demographic. DOOH networks also offer advertisers
hyper-local targeting down to a specific ZIP code radius,
which works in tandem with location-based mobile
marketing and online campaigns.

In another example, Ocean Outdoor, a UK-based

outdoor media company collaborated with Womens
Aid and WCRS, a London advertising agency, on a
campaign to raise awareness of domestic violence.
The campaigns creative employed
a unique use of facial recognition
technology, which allowed each
digital billboard to recognize when
people were actively paying attention to
an image showing a bruised woman. Those who
looked at the billboard got immediate feedback via
a live video feed that ran along the bottom of
the screen.

Examples of DOOH venues include

transportation hubs such as airports, and
railway and bus terminals. Corporations
are deploying digital screen networks
as an effective way to communicate with
employees at call centers, manufacturing facilities,
and distribution hubs. Corporate ad networks now reach
on-the-go professionals at office building lobbies and
elevators. Hospitality providers such as hotels, fast-casual
restaurants, and entertainment and sports venue operators
have adopted the technology at movie theaters, stadiums,
and arenas.

A visual ticker-tape registered the total number of

people viewing the screen. As more people took notice
of the image, the womens bruises slowly healed,
demonstrating to passers-by that by actually taking
notice, they can help confront the signs of domestic
violence by not turning a blind eye. This award-winning
campaign was the first digital out-of-home ad to use
the attention of people looking at the digital screen to
trigger an immediate change in the creative.

Retailers, which include in-store networks and shopping

centers, are influencing purchasing decisions by placing
digital screens in aisles and checkouts. And specialized
networks are now in doctor and dentists offices, hospital
waiting areas, gas stations, beauty salons, and college
campuses.

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Digital out-of-home is also playing a larger part in the

Internet of Things (IoT) ecosystem. Active consumers
are interacting with Internet-connected DOOH screens
to access and download online information to their
mobile devices.

Digital out-of-home is part of the larger multiscreen

ecosystem that can effectively amplify a brands message,
creating a deeper level of engagement with on-the-go
consumers. Until recently, most media buys have been
negotiated; however, media today is increasingly being
driven by data and analytics. Programmatic buying is
helping agencies and brands buy media more efficiently
using algorithms to analyze and automate the delivery
of data. Buying digital out-of-home media and locationbased mobile channels together is becoming easier. Several
companies are developing programmatic platforms that
integrate DOOH media with mobile and online, which will
ultimately help media buyers to purchase DOOH media
as part of a multiscreen campaigns with greater ease.

The Takeaway: Marketing ROI

Its estimated that the average person is exposed to
more than 64 hours of promotional messages outside
of their home each year, and digital out-of-home
media is a large part of that exposure. DOOH is now
the second fastest-growing ad medium worldwide,
after mobile, based on average weekly consumer
exposure, according to PQ Media. PQ Medias DOOH
Exposure Index found the average global consumer
was exposed to various forms of digital out-of-home
media for 14 minutes per week in 2013, a 75% increase
from only 8 minutes in 2007. PQ Medias forecast
calls for DOOH exposure to increase to 56 minutes
per week by 2017.16

Digital out-of-home medias improving fundamentals

embrace better measurement standards, innovative ad
serving technologies that include dynamic content driven
by real-time data, and recognition by advertisers of location
as a factor in marketing campaigns. The medium has the
reach and scale that brands are looking for, with a high
volume of audience traffic across a wide range of locations.
And unlike television, it cant be switched off or Tivoed.

Digital out-of-home media is unique because it

intercepts active consumers with relevant, highly
targeted messages as they move throughout their day.
Similarly, location-based mobile delivers relevant,
highly targeted information within a geo-fenced area.
For marketers looking to raise awareness and
generate incremental reach, place-based digital
out-of-home and location-based mobile offer a
brand-safe environment free of the risks of online.
Barriers that have created friction to DOOH medias
adoption are falling away. Initiatives currently
underway by the Outdoor Advertising Association
of America (OAAA), Geopath, Nielsen, and the Media
Rating Council (MRC) are standardizing and aligning
DOOH with television, online, and mobile.

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REFERENCES

1. McKinsey Global Institute, Urban America: US cities in the global economy

http://www.mckinsey.com/insights/urbanization/us_cities_in_the_global_economy
2. Outdoor Advertising Association of America
https://www.oaaa.org/OutofHomeAdvertising/OutofHomeAdvertising.aspx
3. More Than a Quarter of U.S. Internet Users Will Block Ads this Year
http://www.wsj.com/articles/more-than-a-quarter-of-u-s-internet-users-will-block-ads-this-year-new-forecast-shows-1466523758
4. Pagefairs 2016 Moble Adblocking Report
https://pagefair.com/blog/2016/mobile-adblocking-report
5. TV Viewership Sees Double-Digit Decline, According to Accenture
http://screenmediadaily.com/tv-viewership-sees-double-digit-decline-according-to-accenture
6. AdAge Study:Young Consumers Switch Media 27 Times An Hour
http://adage.com/article/news/study-young-consumers-switch-media-27-times-hour/234008
7. YouTube, More than 400 hours of video are uploaded every minute
https://www.youtube.com/yt/press/statistics.html
8. Are Peak Advertising Predictions Now Coming True?
http://screenmediadaily.com/are-peak-advertising-predictions-now-coming-true
9. Andrew Chen, The Law of Shitty Clickthroughs
http://andrewchen.co/2012/04/05/the-law-of-shitty-clickthroughs
10. ANA/White Ops Study Reveals Bot Fraud Will Cost Marketers More than $7 Billion in 2016 Without Increased Focus
https://www.ana.net/content/show/id/38432
11. Kraft Says It Rejects 75% to 85% of Digital Ad Impressions Due to Quality Concerns
http://adage.com/article/datadriven-marketing/kraft-rejects-75-85-impressions-due-quality-issues/295635
12. Google: Understanding Consumers Local Search Behavior
https://think.storage.googleapis.com/docs/how-advertisers-can-extend-their-relevance-with-search_research-studies.pdf
13. Out-of-Home Media Connects with Consumers Near Point of Purchase
http://screenmediadaily.com/out-of-home-media-connects-with-consumers-near-point-of-purchase/
14. Digital to Account for 40% of Out-of-Home Ad Spending in 2015
http://www.emarketer.com/Article/Digital-Account-40-of-Out-of-Home-Ad-Spending-2015/1013107#sthash.S02kgC4k.dpuf
15. Outdoor Advertising Association of America Facts and Figures
https://www.oaaa.org/ResourceCenter/MarketingSales/Factsamp;Figures.aspx
16. Exposure To Place-based Digital Out-of-Home Advertising Surges Worldwide
http://screenmediadaily.com/exposure-to-place-based-digital-out-of-home-advertising-surges-worldwide

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Identify DOOH Ad Networks by Location,
Venue Type, Demographics and Reach

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