Are You Missing Out on OOH Revenue?
Do you serve the out-of-home (OOH) advertising market with wide-format and digital signage? If you’re not, you could be missing out on a significant source of revenue.
According to a new report by MAGNA Intelligence and Rapport, OOH advertising is a US$29 billion market, responsible for approximately 6% of the $500 billion global advertising spend. And if that’s not enough, according to that MAGNA study, OOH’s revenue is expected to grow by 3% to 4% per year in the next five years to reach US$33 billion by 2021.
For this study in particular, MAGNA conducted surveys in 22 key markets including China, Argentina, Australia, Belgium, Canada, Denmark, France, Germany, India, Italy, Japan, Malaysia, Mexico, Netherlands, Norway, Philippines, Russia, Singapore, Spain, Thailand, United Kingdom and the United States.
The study revealed that OOH’s market share will increase to 10% to 12% in some countries (including France and Russia), compared with other media categories including Internet, TV, print and radio. OOH market share has remained stable in the last five years, hovering around 6%.
OOH is the only traditional medium that has been growing ad sales consistently over the last 10 years—and this growth is predicted to continue. OOH market share has increased from 8% to 10% of traditional media advertising spend, which includes TV, print, radio and out-of-home, among other categories.
Why is it growing? Simply, it’s hard to avoid. Media consumers—and generation X and Y especially—have become experts at avoiding advertising by choosing ad-free, paid-for media or blocking ad insertions on free websites. OOH is largely immune from that threat.
But remember, when it comes to OOH it’s not just about print. Mastering the omni-channel is the key to success in this market—especially as OOH audience measurement continues to improve (i.e. eye-tracking software).
Furthermore, digital OOH is boosting advertising revenues by creating more opportunities for marketers in premium locations like airports or malls, thus increasing the revenue per panel multiple times. Although digital units account for only 5% of the global OOH inventory, they already generate 14% of total advertising revenues. In fact, DOOH now accounts for 30% of revenues in some markets like the UK and Australia, and the global share is predicted to grow to 24% globally by 2021.
Digital screens have allowed OOH advertising vendors to penetrate niche environments, allowing them to reach the young urban population that is otherwise hard to reach by traditional media: offices, elevators, taxi, gyms, bars, retail, etc. The “Digital Place-Based” segment offers targeting capabilities and programmatic opportunities, which leads the study to the assumption that OOH advertising spend will continue to rise.
“With the explosive growth of digital-out-of-home (DOOH), the diversified lifestyle touch points it reaches, and the veritable mountain of mobile driven audience data, we are best positioned to accurately, and in real-time, track audiences and deliver contextually relevant messages through out-of-home media. OOH’s sustained growth on a global scale will further enable us to create engaging consumer experiences,” said Mike Cooper, global CEO of Rapport.
What do consumers want? Based on the views of more than 60,000 consumers from nine countries (the UK, France, Germany, Italy, Spain, Japan, Australia, the U.S. and Singapore), Posterscope’s OCS study revealed location was the top engagement factor when it came to dynamic content. On average 60 to 70% of global consumers engage with contextual DOOH messages relating to the weather, time of day, day of week, seasonal events and live sports updates, but location is the dynamic content type most favored. Almost eight in 10 global consumers state that they are interested in location-based messages on DOOH.
And integrating mobile is key to success. Leveraging smartphones (data, activity tracking and interactivity) specifically to maximize the efficacy of a DOOH campaign is not just recommended, but crucial for value maximization.
Denise Gustavson is the Editorial Director and Special Projects Editor for the Printing & Packaging Group, which includes Printing Impressions, packagePRINTING, In-plant Graphics and Wide-Format Impressions magazines, among other brands. She is also the Editor-in-Chief of Wide-Format Impressions.