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When Outdoor Ads become Affordable!

5867The concept of Retail versus Wholesale has been around for hundreds of years – completely unchanged!

Retail is all about buying smaller quantities at prices equal to, or just below, the Maximum Retail Price (MRP).

Wholesale is about buying larger quantities at prices well below the retail price.

Essentially, buying large quantities of product is encouraged by lowering the price per unit.

It works much the same way with services as well – you could look at a month’s subscription fee, bi-annual or annual subscription fee and your per-unit price will keep getting lower as you move up the ‘subscription duration’ ladder.

Let’s face it – we aren’t saying anything spectacular or new or something amazing – this is how it works everywhere… well, almost everywhere!

If you’ve ever tried running outdoor ad campaigns, you might find them quite expensive and the reason is quite simple – when you buy directly from a billboard or media owner, you are buying wholesale ad-spots.

So, you can only buy a large number of spots based on what the media owner will allow (minimums) and the cost per spot will be much lower than what a single ad-spot would cost.

That’s a bit like buying products directly from the manufacturer – at wholesale costs with specified (large) minimal order value.

Making DOOH Inexpensive

Faced with this basic transactional model, there were two ways of making Digital Out-of-Home (DOOH) advertising more affordable:

    1. Lower the Minimum Buying Quantity
    2. Lower the Price per Unit

The problem with both these approaches is the ‘price per unit’ itself – there are certain limits to those.

Keeping a profit margin in mind, there are certain costs associated with running an outdoor ad, including local government or municipality charges, electricity costs, land-rental costs, etc.

These are independent of the cost of printing and pasting creatives on static billboards or creating video/image creatives for digital screens.

Essentially, media owners may try and ensure that their profit margins are attained by maximizing the minimum buying quantity rather than by lowering the price per unit any further.

The more quantity they sell, the lower their price per unit can be, which is where the problem lies.

No, we aren’t talking about the price or quantity here – we’re talking about the variable that’s preventing outdoor ads from becoming affordable…

The Units are Wrong!

There’s no polite way of saying this – the units that media owners use to sell their ad-space is incorrect, ineffective and offers no real value for brands!

8399It’s like saying, buying a car will add value to your life – it won’t!

When the car takes you and your family somewhere, saves you time on your commutes or helps you carry stuff from A to B – that’s when it offers value to you.

The process of buying the car has no value in itself – using the car adds value to your life.

Which is basically another way of saying, focus on the value you derive from outdoor advertising, not the outdoor advertising space you are buying in itself.

To do that, you have to focus on the outcomes and that means, the ‘Unit’ in price per ‘Unit’ needs to change to something that provides value – Impressions.

Impressions make DOOH Affordable

Here’s the main advantage of changing the focus of ad-campaign buying from ‘Spots’ to ‘Impressions’.

Impressions are flexible while spots are rigid!

If you buy an outdoor ad for a very specific period of time, you are paying for that time no matter what you get out of it.

Instead, if you pay for a specific number of Impressions, your ad will only run for what you need.

Here’s the difference – if you want to reach 100,000 people and in the very first 30-minutes, your ad is seen by 10,000 people, then you can stop advertising because you’ve reached your goal – that’s impression-based advertising.

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If, however, you want to reach 100,000 people and buy ad space for 20-minutes, you might not reach your number at all.

Alternately, you might feel like you should go outside of your budget and spend more to buy 40 or 50-minutes of ad-space, just so that you might hit that 100,000 number.

Either way, you are not getting the outcome you wanted – 100,000 impressions at a specific price.

You are either overpaying for things you don’t want (can’t afford) or underachieving by staying in your budget.

The alternative – to pay for reach – is so much better that the fact that these arguments have to be made seems quite ridiculous.

However, fact remains, there is still a gap in the way brands view digital outdoor advertising and if there’s one thing that can change it – it’s a constant emphasis on education for brands that need to see the new wave in outdoor advertising!

Then, all that remains is reaching out to the right portal and buying affordable outdoor ads!

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