Digital OOH spend set to reach $14.6 bn in 2018: WARC

Spend on digital out of home advertising (DOOH) – that is, video content and/or digital signs located in high traffic public locations such as high streets, airports, bus shelters, subways and malls – is expected to grow 10.1 per cent each year between 2018 and 2021, accounting for the entirety of growth in the out of home (OOH) market as spend on traditional sites begins to decline from next year.

Digital’s share of total global OOH ad spend is expected to rise to 37.3 per cent – or $14.6 billion – this year, up from 34.8 per cent in 2017, 32.4 per cent in 2016 and 22.7 per cent in 2012. The rapid growth of DOOH is driven in part by the higher cost-per-thousand (CPM) the format commands, but also the rising penetration of digital panels andthe opportunity to combine data-driven targeting with powerful, dynamic creative.

DOOH’s share is rising at a time when providers are accelerating site investment

Major providers are accelerating investment in digital sites, and this will further fuel growth over the coming years. JCDecaux is building on its existing base of 59,744 digital screens worldwide with the ongoing digitalisation of street furniture in New York, Chicago and London. Clear Channel added 450 new digital screens last year, taking its global total to 14,510, while Lamar intends to add 300 screensin 2019, adding to its existing base of 2,800.

In terms of markets, ad spend figures from the latest AA/WARC Expenditure Report show half of UK’s OOH ad investment is expected to be spent on digital sites this year, equating to £593 million ($770 million). MAGNA forecast spend in the US to reach $1.2 billion, up from $582 million in 2012. The Direct Place-based Advertising Association (DPAA) believes $100 million of this will be traded programmatically, up from $65 million in 2017.

In Germany,where Google is exploring DOOH opportunities, spend is expected to reach $285 million – 18 per cent of the OOH market and more than double the amount invested two years ago; and in France, the share is forecast to be 11.9 per cent ($183 million) this year.

DOOH can deliver powerful creative in high-traffic locations

Data from the Outdoor Advertising Association of America (OAAA) show that digital billboards now account for 21 per cent of all billboards in the country, and research by Nielsen show that approximately 60 per cent of US consumers see a digital billboard each month and 37 per cent see one each week.

In the UK, DOOH plays a core role in the daily commute, generating £152 million in ad spend for Transport for London. The power of the medium is such that Global, UK’s largest commercial radio group, recently moved into the DOOH sector by acquiring Exterion, Primesight and Outdoor Plus, gaining 30 per cent in market share.

A strength of DOOH is the delivery of dynamic creative, using real-time and predictive triggers to ensure the most relevant ad is surfaced to the right people, in the right place, at the right time. The rise of digital screens, particularly on the high street, gives advertisers more choice in where and when their ad is placed, while the creative itself – especially if video – can be powerful.

OOH drives online activation, demonstrating a synergy with consumers’ mobile habits

Search is a key benefactor when included in the mix with OOH – mobile click through rates (CTRs) increase by up to 15 per cent when supported by OOH. Data show 46 per cent of US consumers used a search engine as a result of seeing an OOH ad, while 38 per cent went on to use Facebook.

The outdoor ad revolution is not, however, problem-free. The collection of mobile phone data, for both targeting and measurement, raises privacy concerns. This is cited as a particular issue by almost one in three mobile marketers. And criticisms of the online-ad business for being opaque, and occasionally fraudulent, may also be directed at the OOH business as it becomes bigger and more complex.

While DOOH provides the opportunity of improved targeting through facial recognition, consumers are yet to be sold on the idea. A full 65.2 per cent of those surveyed by WARC and Toluna were not happy for facial recognition to be used for personalised marketing messages.

James McDonald, Data Editor, WARC, concludes, “The combined power of digital out of home and mobile location data can be used to add greater targeting capabilities to a broadcast medium, serving programmatically-traded creative by the hour to the right people, in the right place, at the right time. This is an enticing prospect for advertisers looking to leverage digital’s strengths without the risks of ad blocking, fraud, and risk to brand safety.”

Global media analysis: A round-up of DOOH

  • 1% compound annual growth rate for DOOH to 2021
  • 15% increase in mobile click through rates when used with OOH
  • 21% billboards in America which are now digital
  • 37% Americans who see a digital billboard at least once a week
  • 1% DOOH’s share of UK OOH ad spend this year
  • 9% consumers who are unaware that facial recognition technology can be used to measure mood

Aimed at media and brand owners, market analysts, media, advertising and research agencies as well as academics, WARC Data provides current advertising and media information, hard facts and figures – essential market intelligence for ad industry related business, strategy and planning required in any decision making process.


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