In the ever-evolving landscape of Digital Out of Home (DOOH) advertising, the importance of maintaining control over infrastructure cannot be overstated—especially for publicly owned companies. While outsourcing to third-party vendors might seem convenient, retaining ownership and operational flexibility over hardware, software, and ad management systems is a strategic advantage that pays dividends in both the short and long term.
Publicly owned companies often play a vital role in the lives of citizens, from providing essential services to managing critical infrastructure. In the context of DOOH advertising, this means they have a unique responsibility not only to their shareholders but also to the public at large. By owning their own DOOH hardware and software, these companies can ensure that their operations remain aligned with public interest, free from external pressures or limitations imposed by private vendors.
When a company owns its infrastructure, it gains a level of flexibility that is simply unattainable when relying on third-party providers. This independence is crucial for several reasons:
Tailored Solutions: Companies can develop and implement customized solutions that meet their specific needs, rather than being forced to conform to a one-size-fits-all system provided by a vendor.
Rapid Adaptation: Market conditions and technology trends change rapidly. By maintaining control over their own systems, companies can quickly adapt and implement new features or changes without waiting for a vendor's update cycle.
Content and Innovation: Having control over both the hardware and software allows for more creative and innovative uses of DOOH spaces. Companies can experiment with different content strategies, integrate advanced technologies like sensors, and adjust to the specific preferences of their audiences.
One of the most significant risks of outsourcing DOOH infrastructure is becoming captive to a vendor's "walled garden." These closed ecosystems are designed to lock clients into using a vendor's proprietary hardware, content management systems (CMS), and sales services, often leading to a dependency that stifles innovation and flexibility.
Limited Vendor Options: When tied to a specific vendor's system, switching to another provider can become prohibitively expensive or technically challenging. This reduces a company’s bargaining power and forces them to accept terms that may not be in their best interest.
Market Constraints: With only a few vendors dominating the market, companies may find themselves with fewer options and less competitive pricing, leading to higher costs and lower margins.
Operational Risks: Relying on a single vendor can introduce a significant operational risk. If the vendor faces financial difficulties, undergoes a merger, or decides to change their business model, it can directly impact the company’s operations.
By developing and maintaining their own ad management system, publicly owned companies can unlock even greater potential in their DOOH operations. This approach allows them to:
Maximize Revenue: Instead of sharing a substantial portion of advertising revenue with vendors, companies can retain a larger share of profits. They can also explore more diverse revenue streams by offering different levels of access and services to advertisers.
Enhance Transparency: An in-house system provides greater visibility into the performance of ad campaigns, enabling more accurate reporting and better decision-making.
Support Market Diversity: Owning the ad management system allows companies to offer fair and open access to a wider range of advertising vendors, including smaller, regional players. This not only fosters competition but also supports a more diverse and representative advertising market.
For publicly owned companies, maintaining control over their DOOH infrastructure and ad management systems is not just a matter of operational efficiency—it’s a strategic necessity. By retaining ownership of these critical assets, companies can ensure their operations remain flexible, responsive, and aligned with both their business goals and public responsibilities. Moreover, avoiding the pitfalls of vendor lock-in preserves the freedom to innovate and adapt in a rapidly changing digital landscape.
In a world where technology and market conditions are constantly evolving, the ability to chart your own course is invaluable. Publicly owned companies that seize this opportunity will not only enhance their operational capabilities but also position themselves as leaders in the digital advertising space.