Commentary

Global Digital Out-of-Home Revenues Will Double by 2016

Digital out-of-home will be one of the fastest-growing media around the world over the next five years, according to Magna Global's latest ad forecast, with a compounded annual growth rate of 15.2% from 2011-2016. That puts it behind just two other media -- the super-hot categories of online video, poised to grow at an average rate of 19.6% per year over the same period, and mobile, which will grow at an average rate of 19.4% per year.

Thus DO is expected to grow at a rate roughly three times the rate for the media business overall, which Magna sees growing at between 5%-5.5% from 2011-2016. DO will help drive the strong growth rate for the broader out-of-home advertising category in general, which Magna expects to grow 7.9% in 2011. From 2011-2016, total DO advertising revenues will double from $2.6 billion to $5.2 billion, while total out-of-home advertising revenues will increase 46.8% from $26.3 billion in 2011 to $38.6 billion

Focusing on specific regions, Magna sees out-of-home revenues growing fastest in Asian countries including South Korea, India, China, and the Philippines -- but DO is just part of this upsurge. The same forecast expects conventional, static billboard, transit, and other kinds of traditional out-of-home to grow at an annual rate of 6.8% during this period. The increase in conventional billboard revenues is attributed to the proliferation of new advertising surfaces on the sides of buildings, as well as more sophisticated management of ad inventory on public transit systems.

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Cinema advertising will be another strong growth area over the next couple years, according to Magna, which forecasts an 8.8% growth rate in 2011 followed by annual growth rates ranging from 8%-10% through 2016. In dollar terms, that means total (global) cinema ad revenues will grow from $2.6 billion in 2010 to $4.4 billion in 2016.

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