Looking into the evolving landscape of digital advertising, we see how retail media, DOOH, and CTV are innovatively harnessing location-based strategies to offer a unique approach to how brands connect with consumers.
Perion Marketing
10th Mar 2024
By Tal Jacobson, CEO, Perion
Retail media and DOOH will continue to grow in 2024, attracting advertisers with the promise of omni-channel technology.
This technology is designed to offer a seamless integration of online and offline experiences, effectively bridging the gap and creating more impactful consumer engagements.
At the same time, due to changes in consumer habits, CTV is also expected to grow due to growing consumer adoption of Free Ad-Supported TV (FAST), as well as the continuous shift from linear to digital streaming. As a result, streamers are broadening their ad-supported service tiers, and consumers are looking for ad-supported options to cut down on soaring subscription expenses.
Understanding how CTV and DOOH interact and converge with retail media is key for investors hoping to share in advertising’s growth.
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In 2024, as in-person spending completes its recovery from COVID and hits new heights, another dimension to the retail media phenomenon will take shape: in-store and near-store media activations. Retailers will pair digital media — such as a personalized CTV or desktop ads to drive store visits — with near-store and in-store mobile activations and digital screens (DOOH), completing the shoppers’ journey to purchase. What’s more, these in-store activations will form part of the closed-loop attribution that retailers are able to measure, given how close they are to the point of sale.
Still, this proliferation presents a challenge — and therefore an opportunity for innovation. Advertisers will need a data driven technology layer to streamline access on an omni-channel basis. Ultimately, advertisers want reach and incremental performance. They do not want relationships with 30 different vendors and channels. So, tech will bridge the divide, providing advertisers one place to reach their audiences on their consumer journey.
Due to this desire for consolidation, don’t be surprised if more retailers follow the lead of Kroger, which explicitly said it was seeking to buy Albertsons, partly to “reach an expanded national audience of approximately 85 million households nationwide.” Scale will decide the winners of retail media, so in this space, one large, combined audience is better than two smaller separate ones.
The full-fledged return to in-person shopping will also boost DOOH, which combines the high-visibility creative of OOH with the targeting, measurement and data driven dynamic creative of other digital channels.
Investors might assume that OOH is a channel of the past. Aren’t billboards as old-fashioned as advertising gets? But by leveraging anonymized audience location data to understand the audience of each OOH screen at a given time of day — advertisers can both customize DOOH ads based on local promotions and the local audience around the OOH ad, and measure the correlation between exposure and efficacy, based on sales uplift and campaign correlation.
DOOH will also naturally align with the growth of in-store retail media driven by the increase of in-person retail spending and the leveraging of consumer loyalty card data. Advertisers will increasingly be able to mobilize consumers from the comfort of their living rooms, nurture them on the literal path to purchase out in the real world and close the deal in stores. And the whole process will unfold digitally, allowing for a level of targeting, personalization and measurement that was previously reserved for social platforms and display.
CTV advertising is growing due to the dual forces of changing consumer habits and economics.
On the consumer habits front, consumers have been transitioning from traditional linear TV to streaming. In July of last year, traditional TV’s share of viewing time dipped below 50% for the first time. The change represents a boon for CTV, and advertisers have been increasingly capitalizing on the channel with rapid growth from free ad-supported television in particular.
Economically, 2023 saw the likes of Amazon, Netflix, and Disney announce ad-supported tiers as an environment with higher interest rates and recession fears incentivized streamers to seek new revenue sources. Similarly, on the consumer side, economic concerns encourage diversification. Some consumers will pay more to skip ads. Others would prefer ads in exchange for lower costs. The CTV ecosystem is heading in the direction of providing every consumer with that choice, boosting advertising supply.
For investors, CTV’s embrace of ads presents an opportunity. Streamers are adapting to fuel both growth and profits. That is good news for EBITDA-minded investors. On top of that, consolidation is likely in this sector, too, for similar reasons to the dynamics of retail media. Advertisers want one or two CTV buckets where they can reach their entire audience. The largest players will succeed in that environment, which is likely why Warner Bros., Discovery and Paramount are reportedly discussing a merger.
In short, investors evaluating opportunities in digital advertising should bear in mind three trends: the resurgence of near-store and in-store retail, the advantage scale affords publishers and retailers seeking to monetize attention, and the hunger on the part of both publishers and consumers for a variety of options, including ad-supported tiers for streaming TV. The companies that can capitalize on these trends, leveraging location, data, and personalized creative for smart advertising, are in a position to reap the benefits of a prosperous 2024. Retail media, DOOH, and CTV are the terrain where the greatest victories will be won.
This article was originally posted on NASDAQ, on Jan 22nd, 2024.
Perion’s leadership team is thrilled to be at Cannes Lions 2024, ready to connect with brands and industry leaders to discuss what the future holds for omnichannel advertising.
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