How Artificial Intelligence Can Transform the Digital Out-of-Home Marketplace

While artificial intelligence (AI) is changing many facets of digital marketing, few marketers have considered incorporating that technology into the offline world. But that could change in 2018 as marketers learn how to incorporate AI, along with the hoard of data they have about their customers, into physical touchpoints. eMarketer’s Tricia Carr spoke with Omer Golan, founder and CEO of Outernets-a technology company that works with retail brands like McDonald’s and Dylan’s Candy Bar to create personalized window displays-about how AI is improving the digital out-of-home industry.

Omer Golan, Founder and CEO Outernets

eMarketer: Why should marketers explore different uses for AI this year-even if what they’re currently doing is working for them?

Omer Golan: The typical audience today is more sophisticated and they demand more mindfulness from advertisers. They want ads to be more conversive than they are with a big data approach. AI technology can solve these pain points by helping marketers personalize content and make it interactive. Their products become a part of a conversation, and consumers can relate more to what they see if it’s something that matches their interests.

eMarketer: Outernets plays in the out-of-home space. Is there consumer demand for a higher level of personalization in the offline world? Or are marketers providing personalization offline just to get ahead of the curve?

Golan: I wouldn’t say there’s a demand-there’s an expectation. Audiences today are expecting everything to be smarter, better, faster, digital and interesting. Everything has to be an experience. If there weren’t experiences outside or at the store, we would all just shop online.

For example, many retailers today are missing a way to offer compelling experiences that differentiate them from ecommerce. Remember that a small percentage of shopping happens online-everything else still happens offline. Even Amazon is going offline now. Brick-and-mortars shouldn’t be too alarmed, but they should try to figure out how to leverage technology to make the offline experience better.

eMarketer: Your company works with marketers to create window displays that are powered by AI. How does the technology work?

Golan: We think of the storefront as similar to the homepage online. You’re trying to understand where people come from, what they’re looking for, how to retain them, how to pique their interest, how to increase their basket size and how to make them come back. The way to do that is to offer experiences that consumers remember and make them want to come back-in addition to convenience and relevance.

We create video displays in storefronts that give consumers interactive experiences, and we use machine learning and computer vision to understand everything we can about what happens in front of the displays-who is there, what they’re looking for, how they behave, how they respond and how they engage with the content. We leverage many different types of data to do this. And we do this in real time so retailers are able to personalize the content. Consumers can also buy the product they see, so as a result, a window advertisement becomes another ecommerce platform.

eMarketer: Even with digital out-of-home advertising, it’s often impossible for marketers to measure ROI return on investment. Will AI help change that?

Golan: Out-of-home used to be the last medium on every media planner’s list because they had no idea if it worked or if people saw it. The entire strategy was around brand awareness. With AI, their goal is changing. Marketers will start to shift from brand awareness to actually seeing sales from their ads. Digital out-of-home advertising and AI should generate real revenue for advertisers this year.

eMarketer: How will AI change the creative process for digital out-of-home?

Golan: When we started in out-of-home advertising, we realized there was no science behind it. Retailers had no data-driven processes for designing their storefront. They didn’t take into account who was passing by and looking in.

For example, when I pass a department store, I see dresses and other women’s items that don’t interest me. But I’m a frequent customer of that store-why don’t they show something that interests me as well? Once you digitize displays and feed in data, you’re not stuck with one item. When I go to the store, I’ll see a guy with my body type wearing a suit that fits and is in stock.

Or when you display a video without AI behind it, that’s it. Even if you get feedback, you can’t do anything about it because it could take a retailer six months to produce a good video-all you can do is take it off. But AI helps everything work faster and more efficiently and give better ROI. You can personalize the content in real time.

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