A new report finds that OOH is the only traditional media
segment to see consistent ad revenue growth, writes Rapport’s Paul Sambrook.
This piece takes us through some of the study’s insights.
Popularised by the 1976 film about the Watergate scandal,
All the President’s Men, Robert Redford’s character Bob Woodward was given what
turned out to be a rather useful piece of investigative advice: “Just follow
It appears as though the world’s leading CMOs have heeded
similar advice in the world of out-of-home (OOH) advertising.
Rapport recently partnered with fellow IPG Mediabrands
agency, MAGNA Intelligence, to conduct a global survey on OOH markets and
industry trends, providing revenue estimates in 70 countries, with a further
deep-dive into the top 20 markets, including the US, UK, China and India.
The resulting report highlights that OOH is the only
traditional media segment to experience consistent advertising revenue growth.
Global OOH advertising revenues grew in each of the last nine years
(2010-2018), with an average growth of +4.1% per year over the period, to reach
$31bn in 2018. Meanwhile, traditional non-digital media as a whole (television,
print, radio) experienced stagnating advertising revenue (+0.4% over the
period, and -1.5% in the last four years).
As a result, the share of OOH in terms of traditional media
sales grew, from 7% in 2010 to 10% in 2018. Considering all media sales
(traditional and digital), the share of OOH has remained stable, while the
share of TV decreased eight percentage points over the period and the share of
print collapsed by 18 percentage points.
We know that online growth has been fuelled by a combination
of marketing short-termism and the ability to attract small budgets from a
seemingly infinite number of small and medium-sized enterprises – but OOH
appears to have trodden a slightly different path.
So why has a channel that is generally thought of as a
brand-building medium, consistently out-performed the rest of its display
channel peers when it comes to winning marketer’s ever-more precious
“I believe there are two main factors at play.”
Firstly, OOH’s audience continues to hold. Consumers are
increasingly mobile and OOH does not suffer from the erosion of reach and
audience that affects editorial media, or the brand safety issues that affect
digital media. This broadcast scale and its ability to generate brand fame
shouldn’t be underestimated – as Rapport’s research with Peter Field
highlighted last year.
Secondly, OOH is a media channel where technology is a true
friend. Digital innovation drives OOH performance and attractiveness in many
ways, from the ability to use data to fuel cross-media integration, through to
better audience measurement.
While retail remains the largest contributor to OOH
advertising revenues in most markets (with entertainment, quick-service
restaurants, travel and beverages being other large and over-indexing client
verticals), interestingly we’ve seen a significant rise in OOH spend from the internet
and technology giants.
In the last two years, many of these global tech brands have
significantly increased their advertising budgets in traditional branding
media. This has propelled the likes of Google, Amazon, Facebook, Apple and
Netflix, along with other local ecommerce or social media giants, into the top
ten OOH spenders in many markets. The growing use of OOH campaigns by digital
media giants is both a testimony to the efficiency of OOH and a factor of
future growth, as marketing spend in the sector is likely to grow further.
But it’s not just the world’s leading advertisers that are
looking to invest their money in OOH; it appears there are other interested
parties that are also following the money.
In what is perhaps a sign of the times for the OOH industry
today, one of the speakers at last year’s FEPE global OOH congress was from PJ
Solomon, a company which advises on mergers and acquisitions. With other
traditional media struggling globally, they noted that outsiders were having to
look elsewhere for growth – stating that “other media companies were taking
notice of the power and presence of OOH”.
Within months, Global Radio had acquired three OOH
businesses in the UK for a combined cost that is estimated to be over £800m,
and two major OOH acquisitions were concluded in Australia at a combined value
of over $1.5bn (JCDecaux SA and oOh!media buying APN Outdoor Group and Adshel
There’s no doubt about what has driven this sudden interest
in OOH from investors: the advent of digital. I don’t believe it’s a coincidence
that the consolidation we’re witnessing in the OOH industry has occurred in the
two biggest DOOH markets, with both the UK and Australia being the first
markets to generate 50% of total OOH revenue from digital.
MAGNA estimates that the number of digital OOH (DOOH)
screens has almost doubled globally during the last four years; and they
predict that DOOH global revenue will grow at an average rate of +12% annually
between 2019 and 2023.
The truly exciting thing about such a positive outlook is
that advertisers are yet to fully utilize the potential of DOOH. In other
words, the best is very much still to come.
Technology certainly paves the way for more agile
communications in DOOH, but I firmly believe that advertisers could reap the
benefit of more integrated video channel planning. There’s a huge opportunity
around the integration of full-motion digital OOH screens with online video and
The IAB reports that vertical video (or D6s in OOH land!) is
growing, driven in particular by the popularity of apps such as Facebook,
Instagram and Snapchat – yet there’s few brands tapping into OOH’s power to
amplify. Rapport’s ‘Standing on the Shoulders of Giants’ research, in
partnership with the IPA and Peter Field, highlighted that adding OOH to Social
boosts a number of brand metrics, including awareness, fame, esteem and trust.
So when you’re planning your next media
campaign, perhaps consider following the money? With brands and investors alike