Key Growth Drivers for Digital Out-of-Home Advertising Include Record Political Ad Spend and Major Brands Seeking Alternative Channels
STAMFORD, CT — Global digital out-of-home media (DOOH) revenues generated by digital place-based networks, billboards and signage operators, grew 15.3% to $6.97 billion in 2011 and are projected to expand 19.2% in 2012, according to new data released by PQ Media, a leading provider of econometric research and consulting to the media, entertainment and communications industries.
US Digital Out-of-Home 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 digital out-of-home industry expanded at a compound annual growth rate (CAGR) of 13.7% in the 2006-11 period, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16.
Today’s release of the 5th edition in PQ Media’s Global Digital Out-of-Home Media Forecast series – the industry’s worldwide benchmark for revenue, growth, trends, analysis and insights – provides the most in-depth data, perspective and forecasts covering all four major global regions and 28 leading markets for the 2006-16 period.
PQ Media defines the global DOOH industry by two major platforms – digital place-based networks (DPNs) and digital billboards & signage (DBBs) – and six venue and location categories, including cinema, retail, office, entertainment, transit and roadside. PQ Media’s Forecast 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.
As part of its research methodology, PQ Media in 2012 forged a number of relationships with key industry stakeholders globally to share data in order to ensure the most credible digital out-of-home information available.
Global DPN revenues grew 11.8% to $5.09 billion in 2011, driven by 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, PQ Media estimates. 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 Digital Out-of-Home revenues surged 39.2% in 2011 to $1.44 billion.
US Remains Largest Digital Out-of-Home Advertising Market
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 Digital Out-of-Home 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 digital out-of-home 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 digital out-of-home 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.
The DOOH Ad Network Locator is a free online resource designed to help media buyers, planner and brand strategists identify place-based digital out-of-home advertising networks by location, venue type, demographics and reach. There are more than 160 advertising-based networks organized by country that include Australia, Canada, United States and the UK. The United States is organized by venue type as it has the broadest range of venue categories, with the greatest number of ad-based networks operating within each category.
Digital Out-of-Home (DOOH) advertising, also known as Digital Place Based (DPB) media, utilizes strategically placed, networked digital signage displays to reach on-the-go consumers while they are outside of their home with highly targeted messages. Digital place-based screens can be found in locations that include transportation hubs such as airports, railway and bus terminals; executive networks in office-building lobbies and elevators. Other venues include shopping malls, gas stations, fast-casual restaurants, fitness centers, hotels and more.