Advertising and media businesses operate in a fast-evolving market and those who do not change to meet the new challenges get left behind fast. So why is it that in an industry constantly pushing the boundaries of technology, their business-critical management systems have failed to keep pace?
Most common is a mishmash of management solutions including combinations of PeopleSoft, SAP, JD Edwards, Microsoft Excel, Mediaocean and sticky notes. Far from delivering a streamlined business workflow, these discordant systems create bottlenecks and inefficiencies.
Many company executives are aware of the limitations of their current business management platforms, yet they are reluctant to consider a replacement for their outdated, inefficient software. And for good reason. System changes can be extremely costly and carry a high risk in terms of operational disruption.
Right now, there are global advertising groups desperately throwing millions at failing software projects.
But an organisation that persists with inflexible and inefficient software systems, puts not only their own business, but also their clients, at a competitive disadvantage.
Out-of-home’s unique challenges
According to Carat’s Ad Spend report, in 2016 out-of-home (OOH) will be the second fastest growing advertising sector behind digital. Despite the positive outlook, OOH faces its own unique challenges.
Even today, such a hugely complex task as managing millions of diverse OOH media units is accomplished by spreadsheet, sticky note and whiteboard. In this scenario, where panels are aggregated into ‘packs’, the margin and expected revenue from individual assets can only be guessed.
With better inventory management capabilities – complete control and real-time visibility – it is possible to forecast the precise revenue for an individual panel, and so maximise the margin on each.
Another persistent problem for OOH owners is the inability to monetise unsold inventory. Digital publishers have solved the problem of selling ‘remnant’ inventory by matching efficient supply side platforms (SSP) with ad exchanges and demand side platforms (DSP). Recent months have seen the introduction of fledgling DSPs for the OOH market, but these are useless without an effective inventory system to manage the supply side. But a digital impression is rather easier to deal with than an OOH unit which could be a digital escalator panel, a Routemaster bus wrap or a building-size canvas.
With an advanced inventory management system, availability can be seen in real-time, campaigns can be built based on sophisticated attributes and audience metrics, and sales orders can be optioned and approved automatically. With a comprehensive SSP, programmatic selling is not only possible for remnant inventory, but also for premium guaranteed.
The main driver of OOH growth over the next five years, according to PwC’s Outlook, will be investment in infrastructure. The balance will naturally shift towards digital inventory. With today’s management systems, the more panels you have, the more people you need to manage them. The leading OOH operators currently have hundreds, even thousands, of salespeople struggling to maintain some semblance of control over millions of widely dispersed media units.
The future will see this same complex operation managed by just a handful of people. With the right equipment, the war can be waged with a small team of elite Special Forces rather than a large army of capable, but under-utilised foot soldiers.
New creative opportunities
In the wider advertising industry, by freeing employees from low ROI processes, they can focus more on strategy and creative thinking - the kind of thinking advertising agencies excel at.
by ANEGIS Consulting