According to MAGNA’s latest report, OOH advertising is now a $29 billion market, responsible for approximately six per cent of the $500 billion global advertising spending. However, OOH market share increases to 10 per cent to 12 per cent 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 six per cent. However, as part of its increasing importance in the media mix, OOH market share has increased from eight per cent to 10 per cent of traditional media advertising spend, which includes TV, print, radio and out-of-home, among other categories.
MAGNA Intelligence, in partnership with Rapport, conducted an in-depth survey in 22 key markets including Argentina, Australia, Belgium, Canada, China, Denmark, France, Germany, India, Italy, Japan, Malaysia, Mexico, Netherlands, Norway, Philippines, Russia, Singapore, Spain, Thailand, United Kingdom and the United States. The objective of the survey was to assess OOH advertising’s sustained growth and impact during a period where offline marketing budgets are stagnating and other media categories are struggling.
The report suggests that OOH remains a mass reach medium, reaching at least half of consumers in most markets and as much as 90 per cent in some. Out-of-home stands alongside TV and radio as a way to communicate at scale. In the majority of markets assessed, OOH reach and audience are mostly immune from the erosion and fragmentation experienced by television or print.
OOH audience measurement continues to improve with technological advancements in areas such as electronic location data and eye-tracking, and markets including the US, UK, and Germany are leading the charge on more sophisticated out-of-home measurement.
Digital OOH (DOOH) 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, the report found. Although digital units account for only five per cent of the global OOH inventory, they already generate 14 per cent of total advertising revenues. DOOH already accounts for 30 per cent of revenues in some markets like the UK and Australia, and the global share is predicted to grow to 24 per cent globally by 2021.
OOH inventory has become more impactful and valuable as according to the study, the total volume of OOH advertising units is not expanding globally. In many markets, it is actually shrinking, as large-format static billboards are being gradually dismantled or replaced by fewer, more high-quality back-lit rolling panels or digital panels. The OOH industry is engaged in a process that feels necessary but complicated for other media categories (TV, radio, print): cutting clutter to increase the impact value of inventory.
Another trend highlighted by the report suggests that transit and street furniture are still developing. In many markets, regulation and public governance have reached a point where transportation authorities and municipalities are ready to partner with OOH vendors to generate advertising revenues. These OOH segments are typically based on long-term contracts (10 to 15 years) and the renewal/RFPs being negotiated now are often the first to come up in the context of affordable digital screens, connectivity and programmatic opportunities which has led to the digital inventory to increase by approximately 30 per cent over the last two years.
The report found that the digital screens have allowed OOH advertising vendors to penetration niche environment allowing to reach 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.
OOH has now also become addressable and is experimenting with programmatic, according to the report. Programmatic technologies initially developed to automate the trading of online display ads, are now being used in to buy and optimise ad campaigns on connected DOOH units. Programmatic techniques not only optimise the workflow of media-buying but help brands deliver the right ad in the right place and at the right time, using consumer data and mobile location data. Giving advertisers the ability to plan, buy, optimize and measure the effectiveness of their outdoor campaigns through an online platform represents the natural evolution of OOH’s technology-driven transformation with many vendors developing Private Marketplaces (PMP).
Mike Cooper, Global CEO of Rapport said, “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.”
Vincent Létang, EVP, Global Market Intelligence at MAGNA said, “Thanks to favorable lifestyle evolutions, innovation and investment from media owners and public authorities, OOH has been the only ‘traditional’ media category to show consistent growth in the last ten years, while TV and radio have stagnated and print sales have declined. MAGNA predicts this will continue: OOH advertising revenue will grow by 3 per cent to 4 per cent per year in the next five years to reach $33 billion by 2021.