Global Digital OOH Spend Growing at 19.2% Clip

April 23, 2012 by Dave Haynes

PQ Media, which watches the Digital OOH ad sector probably more than any other research and analysis company, says the global Digital OOH market is expected to grow by almost 20% in 2012.

The PQ Media Global Digital Out-of-Home Media Forecast 2012-16 suggests global Digital OOH media dollars generated by digital place-based networks, billboards and signage operators grew 15.3% to $6.97 billion in 2011 and is  projected to expand 19.2% in 2012.

US DOOH operator revenue increased 11.2% in 2011, driven primarily by double-digit growth among digital billboard operators, while digital place-based networks grew at a high single-digit rate for the year.

Overall, the global DOOH industry expanded at a compound annual growth rate (CAGR) of 13.7% in the 2006-11 period.

PQ says global DPN revenues grew 11.8% to $5.09 billion in 2011, based on double-digit growth in the Asia-Pacific region – the largest and fastest growing region – fueled by the Chinese market, which is the region’s biggest and strongest growing market. Global DBB revenues increased 26% to $1.88 billion, fueled by positive measurement, regulation and agency perception trends in most of the leading markets in the four major regions. China’s overall DOOH revenues surged 39.2% in 2011 to $1.44 billion.

The US is the largest overall DOOH market worldwide among the 28 leading countries tracked by PQ Media, generating $2.05 billion in 2011, followed by China and Japan. The UK DOOH market, the largest in Europe, generated $549 million in 2011, up 11.3% due to the activation of new ad locations and digitization of older sites in preparation for the London Summer Olympics. Brazil’s DOOH market grew 38% to $155 million in 2011, the fifth consecutive year of double-digit growth for this market, PQ Media estimates.

In the US, DPNs remained one of the fastest-growing ad-based media in 2011, although growth decelerated sharply from 2010 due to cyclical events that negatively impacted the media business in the second half. After a 15.3% expansion in 2010, revenue growth decelerated to 7.5% in 2011, due to a substantial slowdown in the cinema category. Total US DPN revenues increased at a CAGR of 10.7% from 2006 to 2011, reaching $1.41 billion, fueled by double-digit gains in the corporate & healthcare, entertainment & education, and transit venues, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16.

While 2011 began strong for DPNs in the US, a record broadcast and cable TV upfront and the sudden change in sentiment regarding an economic recovery triggered a decline in national scatter ad spend in the second half, as ad budgets tightened in the fourth quarter. Excluding cinema, however, the deceleration in overall DPN growth was much less severe in 2011, as combined operator revenue in the other four venue categories increased 13.2% to $736 million. US DBB revenues, meanwhile, increased 20.3% to $638 million in 2011 and posted a 24.1% CAGR in the 2006-11 period, fueled by accelerated rollouts of roadside DBBs which produce higher and higher-margin revenue than static billboards, according to PQ Media.

“While TV remains the 800-pound gorilla of ad-based media due to its reach, scarcity and measurement, DPNs offer brands opportunities to extend their reach by engaging target consumers with contextually relevant content in venues outside the home,” said Patrick Quinn, CEO of PQ Media. “Despite the growth deceleration in 2011, we believe 2012 has the potential to be a watershed year for DPNs, particularly in the second half, as there appears to be a good chance for network operators to differentiate from other emerging media and prove their value as part of integrated media solutions.”

Quinn added that economic and advertising indicators in the first quarter of 2012 are comparatively encouraging and that PQ Media is forecasting a relatively slow, but stable economic recovery becoming more noticeable in the second half. Concurrently, TV’s inventory scarcity will become more apparent, as a record increase in political and Olympics ad spend in the second half may squeeze some brands out of the medium, which could force them to consider investing in other high-quality video platforms, such as DPNs.

Global DOOH revenues are expected to increase 19.2% in 2012 to $8.3 billion, as operators expand into new venues and markets, install DBBs in more locations, and incorporate enhanced and interactive features. Global DOOH revenues will expand at a 21.3% CAGR in the 2011-16 period. US DOOH revenues are expected to grow 12.5% to $2.3 billion in 2012, and post a 12.5% CAGR in the forecast period, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16. US DPN revenues are projected to increase at an accelerated 10.5% in 2012 to $1.55 billion, driven by stronger audience metrics, more industry consolidation, greater network scale, and leading operators promoting the medium as a valuable component of multimedia ad solutions.

This is the 5th edition of the PQ report. The company breaks up the Digital OOH industry as digital place-based networks (DPNs) and digital billboards & signage (DBBs), which makes some sense but does little, I think, to remove te marketplace confusion about what to call itself.

The forecast, which costs $1,700, includes over 250 pages of data and analysis, as well as more than 100 charts and tables, which include input from several hundred members of the company’s exclusive Global Opinion Leader Panel™ of network operators, agencies, trade associations, advertisers and financiers. This year, PQ Media has data shared from the Digital Place-based Advertising Association (DPAA).



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