1. Looking
Forward/
2011 Out of Home Outlook for the Year Ahead/
2011 OUTLOOK
The Out of Home (OOH) industry redefined it core offerings amidst the recent recession and continued to invest in the industry.
The industry grew 7.3% in the third quarter of 2010 and the first nine months have shown a revenue increase of 3.3%. Local
and national ad placement has shown signs of steady improvement into 2011.
Despite the economic downturn, over the past decade (2001-2010), OOH revenue grew by nearly 20% and is expected to
continue to perform well - better than the overall ad industry and other local media in 2011 (according to Magna, Veronis
Suhler Stevenson, and ZenithOptimedia). While the total ad industry is expected to increase 1.9% and the local ad business is
expected to increase 1.1%, the OOH ad industry is anticipated to grow 5.1% in 2011.
SEASONALITY
Seasonal variances are expected to remain consistent with historical OOH patterns. Seasonal trends are common within
Outdoor, a segment of OOH, with the strongest occupancy rates during the spring and summer months and conversely the
softest occupancy rates during the winter months. This is expected to continue, though increasingly the industry has seen
different categories take advantage of opportunities during the “soft” periods of the early first quarter period. It is important to
discern OOH formats between “Outdoor” and OOH, a segment that increasingly includes an array of formats that are out of the
home. For OOH formats including cinema, place-based, airports, malls and sports venues, seasonal variances are less defined.
OPPORTUNITIES FOR GROWTH
OOH ad spend is on the rise, but increasingly the industry needs to demonstrate its versatility among the “scope” of OOH
platforms and its ability to deliver cost effective ways to reach both mass and targeted audiences. The continued converging
world of communications is precisely why OOH remains strategically important - it can reach both audiences effectively and be
used as a means of both brand awareness and direct response. As other media continue to fragment and become more niche
oriented, OOH can still reach a mass audience, is unavoidable, and it reaches people near the point of sale—in fact, it can
literally serve as the point of sale with new interactive and mobile technologies in place. As more people are out and about, the
OOH audience is growing, with a broadening array of communications formats that collectively intercept more consumers more
often in their daily routines.
TOP CATEGORIES IN 2011
The top OOH ad spend categories have remained constant over the past two years with local services & amusements ranking
highest since many local businesses fall into this category. In 2010, restaurants, entertainment, and communications (especially
wireless companies) have been strong OOH users and are expected to continue. Steady spending among automotive and
distilled spirits advertisers, perennially strong categories in OOH, is also expected to continue. The Financial and insurance
categories are likely to continue to grow their OOH spend significantly. In 2010, the government and politics category was
particularly strong.
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2. continued
Looking
Forward/
2011 Out of Home Outlook for the Year Ahead/
ISSUES
The OOH industry’s investment in the EYES ON measurement system is giving Outdoor (billboards and street furniture) new
credibility in the media consideration process. The launch of EYES ON was a watershed moment for the OOH advertising
industry and the industry is benefiting from the gradual integration of TAB’s EYES ON ratings into common business systems
used to make sophisticated decisions about OOH inventory and competitive operators. Slowly OOH planning is being weaved
into the OOH process. This integration ensures the core numbers applied by the OOH advertising industry are consistent across
the buying and selling processes of planning, buying, execution, and post-campaign analysis.
IMS and Telmar are about to release new OOH components within their media planning software systems which will be a great
advancement towards planning Outdoor in terms of credible audience delivery. Continued education to the ad community
about EYES ON and its value is a core focus of the OOH industry next year. One challenge is that not all operators and formats
are contained within this measurement system. Other challenges include a gradual learning process - among various parties
– planners, the OOH industry and the ad industry at large, and systems integrations (largely between planning software and
proposal/charting inventory management systems).
Regulatory issues also will continue to be a challenge though issues involved in Digital billboards are likely to make huge strides
in 2011 as traffic studies seem to have effectively demonstrated their value and responsibility with respect to traffic safety. More
regulation and legislation and federal oversight - especially with respect to local excise taxes on advertising are likely to be
prevalent topics in 2011.
TECHNOLOGIES
Digital remains at the forefront of the OOH industry’s innovation curve and that will continue. OOH is fast becoming another
connected channel capable of delivering unique, high-fidelity digital experiences that are varied and measurable. Today, the
segment represents revenue roughly at $1 billion and includes digital billboards, digital place-based networks and cinema. There
are approximately 2,000 digital billboards across the nation, a small percentage among a field of 400,000 + traditional billboards
but increasingly popular nonetheless. Although digital billboards represent large capital expenditures, the deployment pattern for
new digital billboards has remained steady with several hundred more to be built in 2011 and even more beyond.
Digital “place-based” networks reach consumers at the point-of-sale and provide an effective way to reach targeted prospects
and keep brands top-of-mind. The continued expansion of place-based digital networks will continue into 2011 and beyond. The
consolidation and streamlining of this segment will continue more rapidly toward efficient aggregators and buying systems and
more importantly planning systems like PrismScreen. Greater acceptance of this form of advertising will grow as accountability
and measurement systems improve.
Interactive technologies are the main growth opportunity as “Digital” transforms to become a multi-field of communications
beyond one or two-way conversations. Mobile ads will start to contain more elements beyond basic images and text including
the ability to directly buy products from within brand ads. Scanning ads with cellphones to pull up more information from a
website, facial recognition technologies. More companies will continue to incorporate technology into their marketing to make
their messages and promotions stand out including such interactive elements as virtual product demos like test-drives of cars and
interactive storefronts that let consumers engage with the screen.
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