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Google may be about to pair all that data it has on users’ web browsing with the ads displayed on public billboards. Creepy? Maybe. Inevitable? Almost certainly. The Alphabet Inc unit is in talks in Germany about pushing into out-of-home advertising – billboards in stations, shopping centers and shop windows – according to Wirtschafts Woche. The move would be a precursor to similar expansion in the US and the UK, the magazine said.
That’s unlikely to mean that a Google search for underwear as a gift for your partner will pop Calvin Klein ads on the digital billboard when you sit down at a bus stop. You can leave your copy of 1984 on the bookshelf for now. But it could mean that, when a train full of Borussia Dortmund fans arrives at Munich’s main station ahead of the Bayern Munich fixture, the advertising hoarding changes to show soccer cleats or beer, while on a morning at rush hour it displays BMW ads for well-to-do commuters.
Google has been testing programmatic ad technology (in which trading algorithms bid against each other to secure digital space based on the target audience) for billboards since at least 2015. The technology is currently restricted mainly to web ads: Because Google, Facebook Inc. and others are able to track users’ browsing behaviour, they are better able to target publicity at them.
Because of Google’s dominant position in mobile operating systems – Android runs on three-quarters of all the phones in Europe – it is also able to track users’ locations. Privacy concerns mean it’s unlikely to be able to target out-of-home ads at individuals, but it can pull demographic data on what kinds of people are in a given place at a given time.
Using cellular data for advertising hoardings isn’t new: Carriers such as BT Group Plc already sell data to advertisers. Liberum analysts Annick Maas and Ian Whittaker meanwhile estimate that automation of digital-billboard purchasing could boost earnings at JCDecaux SA and Stroeer SE by as much as 66 percent.
Digital outdoor ad spending is growing at 15 percent annually, and will overtake traditional outdoor outlays by 2020, according to PwC. But Google is the 800-pound gorilla that’s not yet in the room. It would give the company another major edge over Facebook, which doesn’t have the same access to location-based mobile data. Mass-market consumer brands often still consider billboard ads a cost-effective option, because they can reach large numbers of people quickly.This is far from a done deal. The ad industry is aware of the threat posed by Google, and the most lucrative billboard locations —train stations and arterial roads — are leased on decades-long contracts.
Ad firms might be wary of teaming up.
— Bloomberg
Alex Webb is a Bloomberg Opinion columnist covering Europe’s technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in
San Francisco