Out of Home - Occupancy Matters

Mar 8, 2023 12:00:00 PM / by Chris Koller

Chris Blog 3-7-23


Gaining media spend share through effective inventory management.


OOH operators can increase their share of the overall ad spend by focusing on the internal optimization of their assets through effective inventory management. As an industry, if we keep accepting single-digit growth while 30+% of the inventory goes unused we will as an industry be handcuffed to single-digit growth. A data-driven inventory management plan is one step in the solution to the OOH industry finally recognizing its fair share of the media spend pie.

By maximizing utilization, and improving their asset management processes, OOH operators can increase efficiency, reduce costs, and offer a more attractive value proposition to advertisers. By regularly monitoring and updating their inventory, OOH operators can ensure that their advertising assets are being used to their fullest potential, providing maximum exposure for advertisers and increasing revenue for the operator. By focusing on internal optimization, OOH operators can position themselves as industry leaders, offering a top-quality and cost-effective solution for advertisers seeking to reach audiences through out-of-home advertising.



Let your advertisers be emotional, but don’t you fall in love with specific pieces of inventory.


When I was managing an OOH plant some years ago, I had a bulletin permed at twice the value of the next bulletin in the market. It had the highest CPM in the market and the same advertiser had permed it for years. When that bulletin came up there was an expectation from corporate that we would be able to get a similar rate for the same asset moving forward. Their logic seemed sound to them; it has been permed for years at this crazy rate and it was clearly the most optimal asset in the market.

While the logic that it was a premium asset was correct, the reality is that asset was only that valuable to the single advertiser who had permed it for years. There was a mandate that came down that we take no less than $xxxx for this bulletin and so it sat empty for a year before I convinced them to emotionally disconnect from the asset, at which time we permed it again for 135% of the market CPM. My point in telling you this is that we walked away from nearly $100,000 in one year because as a company we were too emotionally connected to this asset.


Let’s talk about pricing sensitivity… Different rates for different advertisers.

Furthermore, OOH operators should also consider individual client pricing sensitivity when setting rates for their assets. Different advertisers have different budgets, goals, and desired outcomes, and it's important for OOH operators to take these factors into account when determining pricing.

By understanding the unique needs of each advertiser, OOH operators can create tailored packages that offer the right combination of exposure, impact, and value. In the example above, the advertiser was willing to pay for the specific location. The counter approach would be to find an advertiser that is willing to buy double the size of a poster showing or digital campaign if the rate/CPM was lowered by 25% if the inventory is indeed available.

This approach not only helps to attract and retain clients but also encourages advertisers to increase their spend, as they see the tangible results of their investment. By recognizing and addressing individual client pricing sensitivity, OOH operators can grow their business by providing a more personalized and valuable service to advertisers.

In addition to maximizing utilization and improving asset management, OOH operators can also grow both revenue and share by not emotionally connecting to the rates of specific assets or groups of assets. By strategically lowering rates in some areas while driving higher rates in others, OOH operators can create an environment where advertisers are more likely to invest in their offerings.

Lowering rates on less popular assets can help to drive demand while increasing rates in higher performing or more desirable assets can help to generate additional revenue. By taking a data-driven and targeted approach to rate optimization, OOH operators can create a win-win scenario, where advertisers are able to reach their desired audiences at a competitive price point, and OOH operators are able to grow both revenue and share.

Tags: ShareBuilders, Industry News

Chris Koller

Written by Chris Koller

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