Fragmenting audiences and technological developments continue to draw advertisers to the out-of-home sector, with strong growth predicted over the next five years, according to PwC.
The PwC Entertainment & Media Outlook has forecast the Australian out-of-home advertising marketing to increase at an average compound annual growth rate (CAGR) of 3.8% to reach $654 million in 2017. The sector is projected to grow by 3.5% in 2013 to $562 million, and a futher 3.5% in 2014 to $582 million.
Recent years have seen a significant rise in the amount spent by advertisers on out-of-home. This has been partly generated by fragmenting audiences and technological developments such as near-field communication, QR codes and digital billboards. The latter is likely to be a major generator of future spending as consumers and brands become increasingly familiar with the technology.
Improvements in audience measurement with tools such as the Outdoor Media Association's Measurement of Outdoor Visibility and Exposure, and the ability to provide advertisers with deeper insight to campaign performance will also promote growth.
The local sector's increases reflect the strong global conditions of out-of-home, particularly in the Asia Pacific where out-of-home is projected to increase at 4.7% CAGR to $17.50 billion in 2017.
"Underpinning this growth story has been new digital technology which uses OOH infrastructure to better engage the potential consumer," the report said. "As digital technology continues to evolve, and as market research is more readily available to support advertising campaigns, the out-of-home sector and its players are being transformer. Once seller of blank canvas infrastructure in highly relevant locations, they are becoming companies able to offer insightful marketing opportunities."
JCDecaux Australia chief executive Steven O'Connor said in the report: "Overall, the out-of-home sector is in a good place because we are not suffering from any structural issues. We're not losing any audiences, we're gaining them, and that has to be a good thing in the current day of fragmentation."
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