The Psychology Behind Successful DOOH Ads: Anchoring and Halo Effects

Global ad spending in the DOOH market is projected to reach $18.64 billion this year, with forecasts predicting growth to $24 billion within the next five years (Slayton, 2024). This surge in investment underscores how rapidly DOOH advertising is becoming a critical driver of business success. But to fully capitalize on this momentum, understanding the psychological factors that shape consumer behavior is key. By applying principles of psychology, we can gain deeper insights into how consumers make decisions and respond to advertising. So, how can psychology boost the impact of DOOH advertising? Today, we’ll explore two powerful cognitive biases—Anchoring and the Halo Effect—and examine how they influence not only how consumers perceive individual products, but also how they form lasting impressions of entire brands. We’ll also look at how these principles align with the unique strengths of DOOH as a dynamic advertising platform.

The Anchoring Effect is a cognitive bias in which people place a lot of importance on the first piece of information they encounter when they are making decisions (Tversky & Kahneman, 1974). In simpler terms, our first impressions tend to shape our perception and biases about a given topic. On the other hand, the Halo Effect is a bias where we extend our perception of one positive trait to unrelated aspects (Nisbett & Wilson, 1977). In advertising, if consumers associate positive feelings with one product from a brand based on an ad they’ve seen, they’re more likely to transfer those positive feelings to other products from the same brand. One example to understand both of these effects is the creation of the Apple iPhone in 2007 (Apple Press Release, 2007). The price of the base model was higher than that of other existing phone models at the time ($499). As future iPhones were created and set at lower prices, these prices looked like great deals as they were lower than the first price that had been initially anchored with the first model, which demonstrates the Anchoring Effect (Chen, 2007). In regards to the Halo Effect, the popularity of the iPhone led to  high sales of other Apple products such as MacBooks, iPads, and more. The positive perception of the iPhone led to positive perceptions of future Apple products. 

Maximizing the Anchoring and Halo Effects with DOOH Advertising:

How can both of these principles be applied to DOOH advertising? Traditional advertising is less interactive, more static, has less visibility, contains less personalization, and results in weaker emotional responses in comparison to DOOH advertising. Let’s explore five key factors where DOOH outshines traditional advertising: dynamic real-time content, increased reach and visibility, interactivity and engagement, targeting capabilities, and emotional and immersive experiences. 

• Dynamic and Real-Time Content: DOOH ads are highly flexible, allowing content to be updated in real-time and tailored to specific audiences. This creates an ideal environment to leverage the Anchoring Effect. For example, by displaying live updates or limited-time offers, DOOH can instill a sense of urgency, encouraging consumers to take immediate action. This type of timely content helps establish a strong anchor that makes a discounted price seem even more appealing. Traditional advertising on the other hand is less interactive and more static, which leads to a decreased potential for the Anchoring effect to take place. 
• Increased Reach and Visibility: DOOH ads are strategically placed in high-traffic areas, giving them a higher frequency of exposure (Nielsen, 2020). As consumers are repeatedly exposed to these ads, the Halo Effect kicks in—regular exposure to a brand or product reinforces positive attitudes and builds trust. In contrast, traditional ads often lack this consistent visibility, reducing their ability to create lasting impressions as they have more controlled and limited exposure times. 
• Interactivity and Engagement: DOOH is much more interactive than traditional media, incorporating features like QR codes, touchscreens, or even augmented reality. According to a Nielsen study, DOOH advertising can generate up to four times more engagement than static or traditional ads. This interactivity creates a more immersive experience, enhancing the Halo Effect. When consumers engage with an ad directly, they form stronger emotional connections, leading to a more positive perception of the brand.
• Targeting Capabilities: One of DOOH’s greatest strengths is its ability to target specific audiences based on location and time (Vericast, 2021). Ads can be tailored to the demographic traits of people passing through an area, which makes the Anchoring Effect more effective. When consumers encounter highly relevant ads, the initial anchor resonates more strongly, increasing the likelihood of action or purchase. Personalization of content in this way boosts both engagement and perception. On the other hand, personalization is less possible with traditional advertising as ads do not have the capability to produce real-time personalization and the ads tend to cater to a more general demographic. 
• Emotional and Immersive Experiences: DOOH ads can provide rich, immersive experiences through high-resolution displays and emotional storytelling (JCDecaux. 2022). These emotionally charged ads are more memorable than traditional ads, helping create a lasting positive impact. On the other hand, traditional ads tend to be more passive as well as not as visually engaging. This leads to weaker emotional responses, which result in weaker Halo Effects. By invoking the Halo Effect, even first-time encounters with a brand through a well-executed DOOH campaign can result in positive feelings that extend to the entire brand.

In summary, DOOH advertising provides a unique advantage in leveraging the Anchoring and Halo Effects. Its dynamic, interactive, and highly visible nature ensures that ads are not only seen but remembered and acted upon. By tapping into psychological principles, brands can maximize the effectiveness of their DOOH campaigns and create a lasting positive impression that boosts consumer engagement and brand loyalty. At Dolphin Digital, we specialize in programmatic DOOH advertising and are at the forefront of this innovative approach, helping businesses effectively harness the power of digital out-of-home media. For more insights and information, please visit our website.                       

References

Apple Press Release (2007). Apple reinvents the phone with iPhone. Apple Newsroom. https://www.apple.com/newsroom/2007/01/09Apple-Reinvents-the-Phone-with-iPhone/

Chen, B. X. (2007, September 5). Apple drops 8GB iPhone price to $399. Wired. https://www.wired.com/2007/09/apple-drops-8gb/

Clarkson, N. (2021, August 25). Beyond direct sales: The benefits of Programmatic DOOH for brands. advertisingweek.com. https://advertisingweek.com/beyond-direct-sales-the-benefits-of-programmatic-dooh-for-brands/

JCDecaux. (2022). Emotional storytelling through DOOH. JCDecaux. https://www.jcdecaux.com

Nisbett, R. E., & Wilson, T. D. (1977). The halo effect: Evidence for unconscious alteration of judgments. Journal of Personality and Social Psychology, 35(4), 250-256. https://doi.org/10.1037/0022-3514.35.4.250

Nielsen. (2020). DOOH’s impact on engagement and brand recall. Nielsen. https://www.nielsen.com

Slayton, C. (2024, May 10). The Power of DOOH and CTV, and How They Can Boost Your Brand’s Advertising Strategy. framen.com. https://www.framen.com/blog/the-power-of-dooh-and-ctv-and-how-they-can-boost-your-brands-advertising-strategy

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124-1131. https://doi.org/10.1126/science.185.4157.1124

Vericast. (2021). The rise of programmatic DOOH: Personalization and targeting capabilities. Vericast. https://www.vericast.com