All Eyes On Digital Out-Of-Home Media
PQ Media defines the global DOOH sector through two major platform segments, digital place-based networks (DPN) and digital billboards & signage (DBB), and six venue and location categories, including cinema, retail, office, entertainment, transit and roadside.
Worldwide DOOH revenues rose at a 13.5% compound annual growth rate (CAGR) from 2005 to 2010, propelled by the "gold rush" period earlier in the decade, in which operators rapidly introduced new DPNs and leading OOH companies replaced static billboards with digital versions.
Digital networks represented 78.2% of global DOOH revenues in 2010, declining by more than 10% since 2005 because of faster DBB growth, though revenues still grew to $5.06 billion in 2010, driven by a rebound in the global cinema category as well as comebacks in other venues including office, entertainment, retail and transit:
- Global DPN revenue, the larger of the two platforms, grew 14.5% to $5.06 billion in 2010, driven by strong double-digit rebounds from the 2009 malaise in key leading markets in all four major regions - the Americas, Europe, Asia/Pacific, and Middle East & Africa, according to PQ Media. The U.S., the world's largest overall DOOH and DPN market, as well as Brazil, the U.K., Russia, China and India each expanded at double-digit rates in 2010. These markets are expected to post similar growth again in 2011, when PQ Media projects global DPN revenue will increase 15.2%.
- U.S. DPN revenue bounced back from a slight decline in 2009 to post a 15% gain to $1.54 billion in 2010. U.S. growth is forecast to accelerate to 16% in 2011, driven by double-digit expansion in all five venue categories, including the largest, cinema, and the fastest-growing, office, says the forecast.
- The economic and advertising rebound in the U.S. 2010 spurred a 15.1% gain in U.S. DOOH revenues to $2.07 billion. DPNs accounted for 74.3% share of total U.S. DOOH revenue in 2010. Following a decline in 2009, DPN revenue rebounded in 2010, generating 15.0% growth to $1.54 billion. Growth was driven by expansion in all five major venue categories - cinema, retail, office, entertainment and transit. Cinema is the largest DPN venue, commanding 44%, or $684 million, of the total in 2010, PQ Media estimates.
- DBB revenues increased 15.4% in the U.S. to $532 million in 2010, driven primarily by strong growth in roadside of $328 million, attributed to the ongoing conversion of static boards to digital signage, which command higher ad rates and occupancy.
Among the challenges respondents expressed in the U.S. DPN segment, 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, with 220 DPN operators running 468 networks in the U.S. at year-end 2010. The relatively few DPN operators offering national scale is also a challenge.
Most of the ad dollars spent on U.S. DOOH networks, says the report, are derived from agency OOH budgets, but some leading DPN operators and trade associations in recent years began targeting agencies' larger TV budgets, creating a major growth opportunity for DPN operators. Total OOH media's share of overall U.S. advertising revenue ranks near the bottom of the 16 leading global markets, according to the Study.
Quinn concludes that "The DOOH sector is viewed by most global agencies, brands... (and) DPN operators outside the U.S., as the evolution of OOH media... DPN's key advantage over traditional media... is that with strong program content and ad creative it can engage target consumers... to seed their next buying decision."
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