DOOH bucks ad trend to post healthy revenues

Digital out-of-home advertising will buck the trend of falling ad revenues to become one of the fastest growing media forms in 2010. The claim comes from PQ Media, a provider of media econometrics, which also reported that the 2009 global spend on DOOH will reach $6.69 billion (€4.59 billion).

Despite a sharp downturn in global advertising spending and a decline in traditional out-of-home advertising in 2009, PQ Media says digital out-of-home media is among the fastest growing media in the world. Furthermore, it will continue on an upward track in 2010.

Worldwide expenditure on digital out-of-home (DOOH) is expected to grow 4.7 per cent to $6.69 billion, according to the third annual PQ Media Global Digital Out-of-Home Media Forecast 2009-2014. Although the rate of growth decelerated for the second consecutive year, PQ Media forecasts that DOOH will grow at a compound annual rate of 10.1 per cent worldwide over the next five years.

DOOH media, which includes video advertising networks (VANs), digital billboards and alternative ambient ads, is adopted by brand marketers in a bid to engage target consumers in captive locations for extended periods of time. According to PQ Media, spending in each of these media platforms increased in 2009, while spending in all but one venue category grew as well. Strong secular trends impacting the broader media economy have had a positive impact on the DOOH industry; consumers spend more time outside their homes, commute longer to work, use ad-skipping technology and multitask with various media on the go throughout the day.

As the industry continues to emerge and become a larger part of advertising budgets it will struggle with a number of other trends that operators wrestled with throughout 2009. Among these are the lack of scale many operators are able to provide brands, increased competition from other new media; development of engaging, relevant content; measurement and a common currency. These challenges have led to a consolidation or “shakeout” phase, which the industry – particularly VANs – is going through in 2009 and will continue to endure in 2010, according to PQ Media.

“Our research indicates three distinct phases in the emergence of successful new media – gold rush, shakeout and breakout – and the digital out-of-home business, especially video networks, are in the second phase and will likely be well into 2010,” said Patrick Quinn, president & CEO of PQ Media. “This is actually a good thing as it will defragment the industry and create a landscape of strong operators offering better scale, more relevant content and cohesive metrics. This is, of course, if the industry can weather strong economic headwinds, technological shifts and changing consumer behaviours. But our research suggests that brands and investors see digital out-of-home as the next frontier in media, similar to the early days of radio, cable and the internet.”

PQ Media concluded with news that India, China, Brazil and Canada lead the international growth markets. Eastern European and Middle Eastern countries were hurt by the credit crunch and falling oil prices and this will continue to affect them into 2009. Asia/Pacific will be the fastest growing region of global digital OOH, rising 10.7 per cent in 2009 to $2.18 billion, an acceleration of the 8.8 per cent gain in 2008, when that region already was stuck in a recession before most of the rest of the world.