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out-of-home: Digital Forecast: Digital ad spending will almost double Aug 14, 2009
The increase in digital billboards, video advertising networks (VANs) and alternative ambient advertising, which is included in digital estimates, has driven much of the growth of the OOH industry the past few years, and it will continue to do so at least through 2013. The media investment banking firm forecasts that out-of-home ad revenue will post a 4.9 percent compound annual growth rate from 2008 to 2013, compared to a 3.3 percent decline for traditional advertising. Spending in the category will peak at $10.28 billion in 2013, with traditional out-of-home accounting for 55.9 percent of all spending, compared to 69.9 percent last year. Digital OOH spending will increase at a faster pace, with compound annual growth of 13.2 percent from 2008 to 2013. Total digital OOH spending will hit $4.53 billion in 2013, up from $2.6 billion this year, and accounting for 44.1 percent of all OOH spending. Digital’s greatest strength during this downturn is its flexibility. Creative can be up in a flash and sent to thousands of locations with the push of a button. That saves huge amounts of lag time and makes the medium that much more attractive to advertisers with time-sensitive messages. It also makes it that much more competitive with other media. “Out of home has become such a flexible alternative, especially as the digital elements become more mainstream and/or available,” one buyer tells Media Life. “This flexibility allows the format to make sense for the quick turnaround necessary in these shorter planning periods.” Video ad networks, such as screens at gas stations, stadiums and health clubs, will be the largest digital OOH category this year with spending of $1.5 billion, up 5.8 percent from last year. That growth is slower than in past years, and Veronis attributes it in part to the closing of weaker operators and slower rollout of new screens by the established providers. By 2011, predicts Veronis, the network of providers will become more consolidated, making it that much easier for advertisers to make regional and national buys, and growth will rebound to double-digit percentages again. Among the growing technologies will be systems that send coupons to mobile phones and GPS-based tools to steer consumers to advertisers featured in VAN ads. Digital billboards will see the biggest overall growth in the digital OOH category, up 15.5 percent this year, to $551 million. Compound annual growth for the forecast period is 22.8 percent, despite continued opposition to the billboards in some cities such as Knoxville, Tenn., and Los Angeles, which have banned new boards. This growth will be fueled by the rollout of more boards and by new metrics, such as the Eyes On measurement program, that allow buyers to better target by daypart and geography and better reporting for who sees the ads. Alternative ambient advertising, which includes guerilla, street teams and other non-traditional outdoor approaches, will be the slowest-growing of the three digital categories, up 1.8 percent to $552 million this year. “While alternative ambient advertising will benefit from the shift in spending from traditional to alternative media, the category will not receive as much attention as its digital counterparts,” the report concludes. The Veronis forecast further confirms what media people and other forecasters have been saying for months, that out-of-home was holding up better and was headed for a quicker rebound than other media. Previously this summer, ZenithOptimedia, PriceWaterhouseCoopers and Magna predicted a faster recovery for outdoor than the media economy generally.
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