DOOH Trends: What does 2023 have in store?

Published: November 30, 2022

Despite recession fears and Magna reducing next year's advertising spending forecast, digital out-of-home (DOOH) is still on course to become one of the fastest-growing channels in 2023. Brought on by the decline of COVID-19, revenge traveling, and digital fatigue, consumers are fleeing for the outdoors like never before, and nearly 50% are noticing out-of-home (OOH) ads more than they did last year. In Q1 2022, spending dramatically rose to 40.5 percent, the most significant quarterly increase in the medium's history thanks to digital. Industry research confirms that the DOOH market will increase over 2022's projected horizon.

But what does next year look like? Globally, 76% of marketers plan to increase DOOH advertising budgets in 2023. This stat doesn't come as a surprise, as the agile, high-precision targeting channel is more appealing than one-to-one communication via online media. Not to mention DOOH stands invulnerable against the demise of third-party cookies, as well as increased skepticism regarding the efficacy of digital ads. With DOOH advertising soaring, we have listed four trends advertisers should be mindful of in 2023.

The Rise of Contextual Targeting

The digital ad ecosystem leader, Google, is following Apple’s route to end third-party cookies. Advertisers will no longer be able to utilize cross-tracking to target individuals but instead, use the targeting and measurement capabilities being created through its Privacy Sandbox initiative. 71% of agency and brand executives are worried about the decline of cookies and are scrambling to find an alternative solution. Behavioral targeting capabilities will soon vanish, making first-party data and user intelligence the reigning champs of marketing in 2023.

Marketers aren't waiting around for the post-cookie era. In fact, they are swapping out behavioral targeting for the age-old strategy of contextual targeting. According to Insider Intelligence, nearly half of marketers in the US and one-third in the UK described it as their favorite targeting format.

Luckily, programmatic DOOH technology has superpowered personalization using contextual targeting. Through privacy-compliant mobile location data, marketers have a deeper understanding of shoppers' habits while tracking campaign progress. If a campaign isn't delivering, marketers can start, stop, or pause a DOOH campaign, change ad creative, or adjust a campaign strategy in minutes. DSPs that have capabilities to aid in leveraging first-party data - will likely be the unsung heroes, allowing advertisers to stroll with ease through the cookieless future.

Big Tech Giants Enter the DOOH Space

In late August 2022, Google announced it was making digital out-of-home ads accessible to all its Display & Video 360 users. The shift to OOH comes as no surprise to advertisers and publishers. Director of Operations of Exchange Wire, Lindsay Rowntree, wrote, “with the digital market long plagued by concerns around brand safety and transparency, pivoting towards traditional media, such as radio, TV and OOH, is an astute business move.” And with the big tech giant entering this advertising format, more investment in DOOH can be expected. Prepare for “LEDs, screens technology, data to boost programmatic capabilities—which will ultimately unleash the potential of DOOH,” noted Matthew Keegan.

And it's not long until other tech giants follow. Alibaba has joined the OOH market, acquiring more than 6% stake in China's largest out-of-home (OOH) ad network, Focus Media. The DOOH industry will surely see colossal growth with solid interest from powerful technology companies.

Creators run the world

Today, there’s a desire to make marketing more human again, which is why creator advertising is so successful. Consumers are more enthralled with what influencers say, do, and wear than brands and even A-listers. The creator economy is reestablishing how brands promote their products and services. The industry is only going up, estimated to be worth more than $100 billion, with more than 50 million worldwide labeling themselves creators.

Digital out-of-home platforms like Shoutable.me are bringing the creator economy to the physical world and allowing brands to promote their products with user-generated content. Creators can seamlessly place their custom content on larger-than-life screens, such as digital billboards, and share real-world photos and videos on their social media platforms. The result is higher social media engagement - likes, shares, and comments! Approaching the creator economy in the real world is a visionary concept we will surely see a boom in 2023.

The Broader Economic Outlook

These DOOH trends do not happen in a vacuum. They stand in and are influenced by a broader marketing, social and economic context. In the last few years, firms have been making higher-than-average increases in marketing spending. Marketers reported 10.4% growth in 2022, but this will start trending towards pre-Covid levels of around 5.8% in the year ahead. One of the driving factors of this decline in growth is that customers prioritize product quality, and firms respond to this by increasing R&D budgets. As inflation tightens profit margins, firms are under more pressure to do more with less across all departments. Firms are becoming more interested in measuring how well their marketing campaigns fair, and this is seen in increased spending on marketing analytics and its increased influence on marketing strategy. Spending on analytics hit an all-time high in 2022, with 8% of the marketing budget going to analytics among surveyed firms.

Taking another step back and looking at the wider economic and consumer outlook, the picture becomes a little muddier. Economists and central bankers dislike inflation, but consumers loathe it. In OECD countries, a club of predominantly rich countries, consumers are more pessimistic about the economy than during the height of the financial crisis in 2008 and the pandemic. However, Goldman Sachs’ chief U.S. economist David Mericle reports consumers are doing relatively fine despite inflationary pressures and are seeing a year-over-year 1% increase in consumer spending. Mericle forecasts that the combination of falling wealth and increasing incomes will lead to a similar growth in consumer spending for next year.

The future looks bright for programmatic digital out-of-home advertising. Most of programmatic’s potential remains untapped, but with the elimination of third-party cookies and big tech headed to DOOH, it will certainly invite new capabilities and excitement to the space. So, what are you waiting for? If you're ready to launch your DOOH campaign, our team of experts is prepared to help at no charge to you! Contact us at concierge@adomni.com.

Written By: Julia Cramer

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