Understanding Digital Out-of-Home (DOOH) Ads and How They Work

Picture your typical day. You probably spend most of it at your desk, working away on your computer. Now and then, you might take a break and scroll through your phone. Once the day is done, you might kick back and relax with your favourite TV show.

Today’s digital advertising primarily focuses on connecting with consumers across all their devices. But not every part of your day is spent in front of a screen. Maybe you drive or take the subway to work. Sometimes, you might hit up a convenience store for a snack. After work, you may go to the gym, grab food at a grocery store or attend an event.

Digital out-of-home (DOOH) advertising aims to capture your attention during these offline moments, helping marketers reach the right audience at the right place and time, even when they’re away from their computers or personal devices.

What is DOOH Advertising?

DOOH advertising is a modern form of advertising that uses digital displays to deliver DOOH ads to audiences in high-traffic areas like shopping malls, bus stops, airports, elevators, and other public spaces. It provides marketers with the flexibility, efficiency, and precision of digital advertising with the viewability, scale, and reach of traditional out-of-home (OOH) advertising.

Digital Out-of-Home (DOOH) vs. Traditional Out-of-Home (OOH)

DOOH shares many similarities with traditional OOH advertising: both aim to reach large audiences in public spaces, capture attention with visually compelling messages and imagery, and enhance brand visibility and awareness.

However, unlike traditional outdoor advertising, DOOH is highly adaptable. It employs digital screens, such as LED displays, interactive kiosks, and digital billboards, to deliver ads that can be updated and adjusted in real time. The types of locations where ads are displayed—like gas stations, gyms, and public transit—are mostly the same, but how they’re delivered is entirely different.

DOOH advertising leverages geofencing, data analytics, and advanced targeting to reach the right consumers with relevant content based on the location, time of day, and local weather conditions. This makes it a powerful channel for marketers to engage with consumers during those transitional moments of the day when they’re on the go or away from internet-connected devices. 

Benefits of DOOH Advertising

DOOH advertising is experiencing record-breaking double-digit growth. EMARKETER forecasts that US ad spend on DOOH will increase by 11.2% to reach $3.20 billion USD and is expected to account for two-thirds (67%) of total OOH advertising spend in the UK in 2024.

Although traditional OOH advertising still accounts for the majority of ad spend, DOOH is increasingly used by marketers to connect consumers with brands due to its many benefits, like:

• Advanced targeting: DOOH provides precise and flexible targeting, allowing advertisers to cast a wide net or go super granular with their targeting and tailor messaging based on the location, time of day, and which demographics will likely see an ad.
• Flexibility: With DOOH, you don’t have to send someone to tear down a poster or install a new billboard when you want to make a change. Advertisers can use a programmatic advertising platform to swap out creatives and adjust campaigns in real time without stepping foot onsite.
• Dynamic capabilities: Unlike traditional OOH, which is static, DOOH can use videos, animations, and other interactive elements to engage consumers. A recent study found that over 1 in 5 DOOH ads on video-capable screens were video ads, many of which were repurposed from connected TV (CTV) ads, making it easy to repurpose creatives.
• Viewability: Because DOOH ads are often larger than display or CTV ads and shown in public spaces, they’re harder to ignore. Adblockers don’t work in the real world, and the only way to skip them is by looking away from them, making DOOH ads more likely to gain viewers’ attention.
• Favourability: According to a study by the Out of Home Advertising Association of America, 73% of US consumers view DOOH ads favourably—that’s higher than video (50%), social media (48%), online (37%), audio (32%), and print (31%) ads.

With 76% of consumers reportedly taking a specific action, such as going to a restaurant, visiting a store, or making a purchase after seeing a DOOH ad, DOOH is an ideal channel for boosting brand awareness and encouraging customers to convert.

DOOH Formats and Inventory

There are three main formats to consider when deciding which type of DOOH ad is best for your DOOH campaign.

Large Format

Due to their sheer size and scale, large format DOOH ads are known for building brand awareness by reaching as wide an audience as possible in high-traffic areas.

When you think about large format DOOH ads, the first thing that probably comes to mind is a gigantic billboard in Times Square, Picadilly Circus or Yonge-Dundas Square. 

But aside from downtown cores in cities, large format DOOH ads are also commonly found on:

• Billboards along the side of highways.
• Bus shelters and other transit waiting areas (for example, a subway or train platform).
• Walls on skyscrapers and other buildings.

Large format DOOH ads are effective for generating broad brand awareness, major product launches, or any campaign that requires a large canvas to convey its message and leave a lasting impression.

Place-Based

Much like real estate, place-based DOOH ads are all about location. They’re strategically placed in venues or environments that are contextually relevant to the target audience.

These include:

• Gyms
• Shopping malls
• Gas stations
• Office buildings
• Restaurants and bars
• Colleges and universities

The main goal of place-based DOOH ads is to increase purchase intent by tailoring and targeting ads that are relevant to each specific location, boosting brand awareness and the likelihood of a conversion.

For example, a DOOH ad at a gym would be a great location to market workout apparel and health and wellness products, such as a new running shoe or electrolyte mix. 

Meanwhile, a DOOH ad at an EV charging station would be the ideal place to promote scheduling a tuneup at a dealership or grabbing a bite to eat at a nearby restaurant. 

Because place-based ads appear in settings where consumers are often likely to spend a significant amount of time, they’re an effective tool for highly-targeted campaigns and brand storytelling.

Point-of-Purchase

These DOOH ads appear in real-world locations like grocery stores, convenience stores, pharmacies, gas stations, and big-box retailers. True to their name, these ads are generally placed near points of purchase, encouraging customers to pick up an item before heading to checkout. These include:

• Store entrances
• Checkout aisles
• End caps and shelving

Because point-of-purchase DOOH ads appear in-store, they’re generally most effective for consumer packaged goods (CPG) brands that want to sway customers towards impulse buys and last-minute purchases.

DOOH Targeting and Capabilities

Although DOOH advertising takes a one-to-many approach to reach a wider audience, it still provides targeting capabilities similar to other forms of digital advertising, ensuring marketers only serve ads where they’re contextually relevant.

Location-Based Targeting

Geotargeting, geofencing, and proximity-based targeting are all location-based advertising strategies that can be used for increasingly-granular targeting.

For example, retail marketers could use geotargeting to target ads highlighting regional sales to cities in particular states. Another example could be a B2B marketer using geofencing and proximity-based targeting to serve ads on billboards near or within a specific radius of an industry conference.

Weather-Based Targeting

This targeting strategy allows advertisers to adjust their ad content and placements based on the current or forecasted weather conditions in a particular location where an ad appears.

For example, a winter tire brand could target areas about to experience their first heavy snowfall of the year. On the other hand, an alcohol company could use triggers to show ads only when a location reaches a specific temperature that signals the start of summer.

Listen to this podcast to learn more about weather targeting.

Time-Based Targeting

Also known as dayparting, this targeting strategy involves segmenting the day into different parts (or “dayparts,” such as the morning, afternoon, evening, and night) and targeting specific ads to audiences that are most likely to be receptive to certain messages during those times.

For example, a DOOH ad promoting a nearby coffee chain would be more effective during the early morning commute than after dinner when most people are getting ready for bed. Similarly, a DOOH ad directing consumers to a nearby bar for a nightcap would do better in the evening than at the crack of dawn.

DOOH Measurement and Analytics

Historically, traditional OOH advertising relied on imprecise data to gauge the impact of campaigns. 

However, because DOOH advertising is connected to the internet, advertisers can measure the impact of DOOH campaigns with a higher level of accuracy. Many DOOH platforms use built-in sensors that track the number of unique devices passing by an ad to create accurate estimations on reach (how many people saw a DOOH ad) and impressions (how many times an ad was seen).

Another way to measure the impact of a DOOH campaign is through a brand lift study. In a brand lift study, both an exposed group (people who have seen an ad) and a control group (those who haven’t) are surveyed, and their responses are compared. The difference between the two groups is used to understand the “lift” generated by the DOOH campaign. 

Brand lift studies are particularly helpful for measuring ad recall, brand awareness, consideration, and purchase intent. For example, UK-based agency MOBSTA partnered with StackAdapt on a DOOH campaign for their client Michael Kors Jewelry, targeting shoppers in two of Germany’s biggest cities. The campaign generated over 14 million impressions and accurately measured an increase in brand awareness by 13% and 39%. Read the full story here.

Advertisers can also use footfall attribution, which tracks and analyzes foot traffic in real world locations like brick and mortar stores using device IDs and other data, to tie in-person visits back to specific DOOH campaigns and understand the impact of offline advertising.

An Example of DOOH Advertising in Action

Now that you understand how DOOH advertising works let’s consider a hypothetical scenario that ties together everything we’ve learned. 

For example, let’s say you’re a travel marketer promoting a ski resort.

First, you could choose an ad you’re using for your CTV marketing strategy and repurpose it for your DOOH travel campaign.

Next, you want to choose where and when the ads are displayed. 

Going to a ski resort can get pricey, so you want to target areas where you know people have a certain level of disposable income. You also want to target people most likely to resonate with an ad campaign promoting fun and relaxation in the great outdoors.

With that in mind, you could target office workers in downtown cores, displaying your DOOH ads in high-traffic areas like bus stops, subway stations, and airports. Your DOOH ads could also be timed to display during the evening commuter hours at the end of busy workdays when a trip to a ski resort would seem even more enticing.

Because travellers like to book their vacations three to six months in advance, and January and February are generally considered the best months to hit the slopes, you probably want your DOOH campaign to begin between July and December of the previous year.

Finally, you want to measure the results of your DOOH campaign. You could use a brand lift study through a demand-side platform (DSP) to measure its effectiveness at increasing brand awareness for your target audience and gauge the likelihood of them booking a stay.

That’s just one idea. Like everything in programmatic advertising, the options are seemingly endless.

What’s Next for DOOH Advertising

Along with its record-breaking growth, DOOH as a medium is also undergoing a major shift due to recent advancements in the industry. Based on some recent trends, here’s where we see DOOH heading in the future.

AI Improves Measurement

AI is impacting everything in marketing, from customer segmentation and personalization to building creatives. But one of its most promising uses is understanding and quantifying the audience in front of a DOOH ad.

Audience estimates often rely on mobile phone signals, GPS data, camera sensors, and other information to estimate the number of people around a DOOH ad and who saw it at any given time.

AI can significantly improve DOOH planning and forecasting by offering real-time, accurate audience size and behaviour updates, leading to more effective and efficient DOOH campaigns.

DOOH Increases Engagement and Attribution With Mobile

There are countless examples of innovative DOOH ads that think outside the box, from coughing billboards with built-in smoke detectors to mind-bending 3D experiences that cause you to do a double-take.

But, it doesn’t have to be that complex. 

Steve Nicklin, Senior Vice President of Marketing and Analytics at the OAAA, recently told EMARKETER that the humble QR code will play an increasing role in DOOH ads, providing consumers with information on products and services while giving advertisers data they can leverage for future campaigns and reporting.

“Out-of-home is big screens driving consumers to small screens,” he said. “What those devices also really open up and allow is measurement of audience movement and patterns.”

Programmatic DOOH Grows In Popularity

In the past, advertisers had to either deal directly with media owners using traditional insertion orders or use DOOH-specific DSPs to get their ads on digital billboards.

Now, platforms like StackAdapt simplify the process by bringing everything together under one roof, making it easier for advertisers to launch, adjust, and track the impact of DOOH ads and multi-channel campaigns.

With programmatic DOOH forecasted to account for 26.7% of total US DOOH ad spend in 2024, the future looks promising for advertisers and consumers alike.

Ready to experience the power of programmatic DOOH in StackAdapt? Request a demo today.

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