DSE 2011 – PQ Media says DOOH to grow by 16.9 in 2011
February 22, 2011 by Dave Haynes
Patrick Quinn’s forecast, released at DSE today, suggest 2011 growth will be another 16.7 per cent.
Separating out US numbers, Quinn’s number-massage team says American growth last year was 15.1 per cent, hitting $2.07 billion. Growth this year is expected to line up with the global forecast.
All the numbers roll in digital billboards and cinema, which account for BIG chunks of that money. This does not pure-play digital place-based networks in public spaces and retail are all shooting the lights out in terms of sales. PQ Media estimates only one in 10 DOOH networks in the US are doing more than $10 million in annual ad sales revenue. That may sound like a big number, but for networks of any real scale $10 million is what’s needed to make a go of it.
Quinn says cinema and office-based networks are the ones doing best.
The numbers are what get the attention, but the interesting stuff is further down in the release …
Among the challenges agencies and brands surveyed by PQ Media expressed regarding global DOOH in general, but the U.S. DPN segment in particular, is the continued need for strong standard measurement, planning and buying systems, as well as better program content and advertising creative. In addition, the U.S. DPN landscape continues to be very fragmented, as PQ Media’s research identified 220 DPN operators running 468 networks in the U.S. at year-end 2010. The relatively few DPN operators offering national scale was also cited by agencies and brands as a challenge.
While there were dozens of mergers, acquisitions and bankruptcies from the start of 2008 through year-end 2010, PQ Media estimates that over 90% of U.S. DPN operators generate less than $10 million in annual revenue. But further consolidation is expected and necessary over the next couple years to defragment the DOOH network landscape, provide brands with more national scale and to incorporate mobile, social and interactive media enhancements, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
Most of the ad dollars spent on U.S. DOOH networks are derived from agency OOH budgets. But some leading DPN operators and trade associations in recent years began targeting agencies’ larger TV budgets, and one DOOH association executive stated publicly that there’s a growing belief among agencies and brands that TV is dying due to its declining effectiveness as an ad medium, creating a major growth opportunity for DPN operators. In fact, total U.S. TV viewership increased every year from 2001 through 2010 and TV ad spending increased in eight of those 10 years, except for two economic recession years. Most agency executives serving on PQ Media’s Global Opinion Leader Panel™ reported that a number of DPN operators were actively selling their networks against TV in 2010, despite that audiences, mindsets and behaviors of in-home TV viewers drastically differ from those of DOOH networks.
The vast majority of agencies and brands surveyed by PQ Media indicated they believe DPN’s roots are in OOH media, not broadcast or cable TV. And, in leading markets outside the U.S., traditional OOH and DOOH are most often considered together as one industry, usually with only one or two major trade associations that tend to speak with one voice to agencies and brands, albeit using different tonalities for the various industry segments. The preponderance of agency and brand opinion leaders indicated that for the U.S. OOH media industry, including traditional OOH and DOOH, to gain a greater share of total media spending it must come together, trust each other, collaborate and speak with one voice. Total OOH media’s share of overall U.S. advertising revenue ranks near the bottom of the 16 leading global markets, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
“The DOOH sector is viewed by most global agencies and brands, as well as DPN operators outside the U.S., as the evolution of OOH media – an improvement upon traditional billboards and signage,” Quinn said. “PQ Media’s research shows that DPN’s key advantage over traditional media, such as TV, is that with strong program content and ad creative it can engage target consumers in various captive and transient venues to seed their next buying decision.”
While DOOH networks are venue-based, all agency and brand opinion leaders, and some DPN operators, were adamant that networks should focus primarily on brands’ target audiences, their mindsets and behaviors in particular venues at critical times during their daily routines. Most agency executives on PQ Media’s panel agreed the best way for DOOH networks to gain more traction – until they have a national footprint like cinema – is to sell their networks as part of integrated media solutions, whether they’re budgeted and assimilated with OOH, TV, internet or alternative media. Agency opinion leaders, however, stressed that DPN operators need to focus more on what’s best for their brand clients’ growth objectives. U.S. cinema networks, the world’s largest and most consistently growing DOOH venue category, began its decade-long ascent by activating other media through integrated multimedia campaigns.