Think OOH Blog


Posted by admin on Mar 7, 2012 2:21:06 AM

Scenario: A network operator approaches a digital out-of-home/digital place-based (DOOH/DPB) media buyer and says, “I have a wonderful new network in Football Paraphernalia Stores all across the country. We charge a $30 CPM.” The media buyer scratches his head and tries to determine why the operator has just quoted him this price.

Evaluating DOOH/DPB network prices can be a challenging enterprise for media buyers. The landscape is confusing and fragmented, and it is hard to determine what a fair price is for a media asset. As such, there is a powerful need for a structured and consistent method to evaluate the cost of DOOH/DPB media properties from the buying end.

Network pricing should be considered according to its message-conveying ability. In the simplest terms, the better the medium can convey a brand’s message, the higher its price should be.

But how can media buyers, agencies and brands quantify networks’ message-conveying ability so that they can evaluate price? Referring to the above example, how can media buyers determine how well this new Football DOOH/DPB network will convey brand messages to its audience?

The answer: Create and use an index. This index will take the guesswork out of examining DOOH/DPB costs, and lead directly to consistency in pricing structures across the medium.

The following are the steps in creating and implementing the index.

Determine a standard by which to assess networks. In this case, the baseline should be Cinema, as it has repeatedly proven its effectiveness and success in conveying messaging.
Identify the factors that make Cinema effective — and would therefore make other networks effective.

Create an index by assigning numeric values to each of the factors you’ve identified. The sum of these numeric values will add up to a particular network’s index number. Apply the factors to other networks — in this case, the Football DOOH/DPB network.

Correlate the results with actual costs — the network’s index number ties directly to a CPM it should cost to an advertising buyer. So, if the Football DOOH/DPB network received a 61 out of a possible 100, while Cinema received 94 out of 100, the CPMs assigned to Cinema would be higher than given to the Football network.

By developing a system to evaluate media in the DOOH/DPB space according to its fundamental purpose — message-conveying ability — the buying community has a rare opportunity to influence the market for years to come. Buyers and brands can evaluate every existing and new network according to standardized criteria and look at historical and current pricing structures to determine their fair value. As with the above example in the fictional Football DOOH/DPB network, the index would change the DOOH/DPB marketplace from being a haphazard bazaar into an organized, fair marketplace.

Lucas Peltonen is the digital out-of-home director of OOH PITCH, Inc., where he spearheads DOOH programs for all of the agency’s clients. OOH Pitch, Inc. is a privately-owned boutique media agency that is designed to provide advertising clients with a uniquely well-rounded perspective of out-of-home advertising opportunities.

Join Lucas at Digital Signage Expo 2012 as he presents in an educational session that will further explore this article’s topic. The session, titled “Agency Perspective: How We Value Digital Place-Based Networks,” will take place on March 7, 2012, from 9:00 – 10:00 a.m.

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