Long Read - Outdoor media resumes its climb

Chris Pash
By Chris Pash | 1 June 2022
World Square, VMO.

This is an extended version of an article which first appeared in the May/June edition of AdNews. Subscribe here to make sure you get your copy.

Outdoor media has resumed its place as a growth media, as Australians taste freedom from pandemic restrictions.

Industry players are forecasting a return to pre pandemic levels this year. Investment bank Jefferis: “Our analysis suggests outdoor ad revenues have commenced a strong recovery phase.”

The bank’s analysts see earnings for ASX-listed oOh!Media to fully normalise by the 2023 financial year to above pre-COVID:

“Thereafter, the outdoor industry should continue its pre-COVID market share gains that were evident for ten years up to 2019.”

Ad spend, as measured by media agency bookings, showed January just 2.6% behind pre-COVID 2019, according to SMI (Standard Media Index). The Outdoor Media Association (OMA) reported a 25.5% increase to $228.1 million in net media revenue for the March quarter this year, up from $181.7 million for the same three months in 2021.

Charmaine Moldrich, chief executive, OMA: “While our signs are big, and our reach is just as great as TV and online, we attract only 7% of media share overall. In dollar terms that represents $1 billion of net media revenue annually. The evolving media landscape over the last decade has seen us graduate from sixth to third most bought media channel in agency land.”

In 2014, a little over 17% of OOH revenue was attributed to digital signs. Eight years on it’s 60% of revenue from DOOH.

Moldrich: “Add to this, that you can now measure digital signs alongside classic in MOVE 1.5 and produce an impact factor for every campaign, means that buyers and planners have more information than they have ever had before.

“Our focus now as an industry is to educate agencies and advertisers about these new metrics and show how OOH can be used alongside online (and mobile) and TV for both brand building/awareness as well as more targeted sales activations, for effective campaigns.”

Tim Murphy, chief sales officer, oOh!media: “What is exciting and should be encouraged is that the other media are very interested in OOH due to the power of the medium and how it can be so collaborative as part of a wider audience solution.

“Whether it be the big TV, digital or tech networks, there is an appreciation for what OOH brings to the table. We were the ugly duckling of the media until quite recently.

“I think we get a good share of voice, we get a seat at the table. From oOh’s perspective we are a major partner for the big five agency groups, so we get a seat at the table.

“Our share of voice is good because OOH is full of amazing people. If you look at media, OOH always leads the way in regards to perceived innovation, use of data insights, customer service, proactivity and relationships metrics.”

Will the sector continue its pre-COVID market share gains?

Paul Wilkinson, head of commercial, Half Dome: “If we were talking about revenue I would say absolutely – but given we are talking about share of spend, this is a different question and to be honest, harder to answer as it will depend on a number of factors – eg, performance of TV, continued investment into digital, overall market spend, etc.

“One thing on OOH’s side is that during the pandemic, the market as a whole made significant improvements to capability in terms of data and targeting which I believe has been received very positively throughout the industry – so this will no doubt help – but will it achieve higher share of spend than pre-pandemic? Time will tell.”

Pia Coyle, managing partner, Avenue C: “As a lover of and believer in outdoor media, it’s heartening to see the bounce-back in people out and about, and the related revenue growth.

“And it’s not only the fact that consumers are returning to their pre-COVID habits, that is driving outdoor’s sector growth.”

Coyle is also chair of the OFC (Outdoor Futures Council), a group of agency investment experts.

“We have forged a close working relationship with the outdoor media owners, through the OMA (Outdoor Media Association), which has driven significant change in this channel.

“Things that are taken for granted in some other channels, like standardisation of vernacular, verification and accessible audience data have become the cost of entry for the outdoor world too, which has dissolved a lot of perceived barriers around the channel. So, there is no doubt this momentum will propel share gains.

“Understanding the role of each channel in the mix is one of the most important things an agency does, and when there is uncertainty, fragmentation, ad-free challengers in other sectors, outdoor does provide the ability to reach huge audiences, and drive impact and frequency at the same time.

“There is a healthy tension between agency experts and sellers, as we grapple to understand exactly how a changing landscape affects how we reach and influence audiences. And we needed better data to do this.

“Queue the much awaited (and much needed) re-launch of Move 1.5 as an interim measure to help the industry understand the value of digital outdoor, in relation to the static formats we have been measuring for a decade. Move 1.5 is being interrogated by agencies on behalf of clients so we can better understand the right mix of formats, weighting of digital to static and how much share of time (SOT) we need to ensure our client’s ads are being seen.

“At Avenue C, we believe higher SOT on digital panels is more impactful and drives better results for brands. We believe that the extra SOT negotiated (more than the standard 10%) plus the impact that we know digital signs have (due to the new metric, the Neuro Impact Factor) is a killer combo to drive a business result, and Move 2.0 in 2023 will even further hone our ability to understand the most effective ways to use the channel.

“The buzz around programmatic outdoor continues into 2022, with many hoping that this is it’s year. My view on this is mixed. While I am excited for the prospect of what this means theoretically for the industry and our clients, I believe the offering at this point is under-cooked, and in a lot of cases is not representative of a true programmatic marketplace.

“Sellers are still controlling the inventory and setting the price. Data capability is improving, but not quite there yet. In my mind, this is a wait and see. There are some no-brainer use cases, don’t get me wrong… but it’s not a silver bullet.”

Luke Sullivan, CEO Sandbox Media: “Outdoor will continue to grow share. You can see many of the outdoor suppliers have been smart in COVID periods by investing in their inventory. It’s not just with the refinement and improvement of the screens and panels, but also with technology and capabilities, research, accountability and service levels. There is no doubt the majority of clients like the medium and understand what it can provide to a campaign.

“Ultimately, it’s about buying where the audiences are and as people are steadily enticed back into workplaces and get back to travel, the outdoor sector is in a good place to capitalise.”

Steve Fagan, director, Media Republic: “The positive signs are that most sectors in out-of-home are back to pre-COVID levels, unsurprisingly office tower media continues to struggle until there are greater numbers of workers returning to the CBD and surrounding office spaces.

“Weekly data shows the population is back out and about 96% of the 2019 average and 103% of the ‘new normal’ as of the end of March. With this confidence I would suspect that buyers and clients will reallocate budgets back to out-of-home media and that market share gain will grow in proportion.”

Media industry analyst Steve Allen, director of strategy and research at independent media agency Pearman, says the recovery of outdoor is a slightly vexed subject. Some components in the OOH mix are dragging their heels, including street (retail), sports stadiums, location networks, those which rely on foot traffic/attendance.

Initially, numbers are being fueled by pent up demand released with the lifting of restrictions.

“Working from home, now and in the longer term, is certain to significantly affect consumer movement, by a large margin, and thus the currency which supports the pricing of street furniture.”

Michael Mellington, head of media partnerships Melbourne, UM: “Audiences are bouncing back and revenue isn’t far behind.

“COVID, however, didn’t stop the industry making some major movements with key contracts like Sydney Trains and City of Sydney changing hands and most recently Alliance coming to market. So while revenue and audience growth will surely continue, it's anyone’s guess who is going to come out on top.

“Digitisation of outdoor assets has been one of the biggest growth factors for the channel and with that came an investment in data, research, architecturally designed sites and long-awaited improvements to MOVE measurement. The need for data has accelerated the conversation on targeting and addressable deployment.

“Addressable data-lead deployment opens the opportunity to move away from proxy-based inference planning to persistent people-based precision at scale. This enables advertisers to apply first and third party data to what has been historically positioned as a rigid channel to buy. With approximately 80% of Australians 18+ being in the addressable market now, it would be remiss of the outdoor industry not to put their mark on this space.

“While this presents an exciting opportunity for clients who have rich data segmentation, dynamic creative ambitions or flexibility requirements, comprehensive evaluation is still required based on objective: There is no one-size-fits all solution to OOH trading. While AOOH does present a new frontier, an evolving trading standardisation and quality scrutiny presents a number of practical watch outs.

“If exploring ADOOH, agencies need to change the conversation with clients, moving away from reach-based planning into effectiveness of outcomes-based planning. Although navigating outcomes-based planning can be even more complex, clients need to be clear and single minded on their measure of successes and OOH needs to be clear on what can and can’t be measured.”

Melissa Hey, chief investment officer, OMD Australia: “We predict that outdoor media will completely recover in 2022 and by the end of this year would have increased revenue market share above pre-pandemic levels.

“With increased mobility and travel, all outdoor formats, importantly now including airports, are front and centre with consumers.

“We predict the future will be programmatic digital outdoor and it will grow at pace once these measures are in place. This solution enables advertisers to get closer to customers, using more data points to reach them at key times and places, with the right message.”

Nick Thomas, National Head of Investment, MediaCom: “OOH is already back with a vengeance. You only need to look to your own consumer habits to know that friends, colleagues, families are back out. Yes, our work week looks different and yes we just seem to be going from one disaster to the next. But OOH is still being consumed actively by all consumers.

“I have seen so many examples of great new work. Clients running 3D ads, clients showcasing Omni channel campaigns using Programmatic OOH in the mix, new creative executions.”

Simon Reid, national head of Partnerships, Initiative: “The outlook is looking extremely positive with all OOH formats seeing growth YOY. Yes, there is of course still plenty of ground to make up to get back to pre-COVID levels, however, with the all states opening with domestic travel, CBD workers back in droves, sporting crowds back in their favourite seats and gyms operating at capacity, we are finally seeing all OOH formats get some much-needed returns.

“Overlay this with the exponential growth and appetite for programmatic OOH, I can only see growth continuing across the year. Programmatic OOH really is the new frontier as vendors, clients and agencies alike test and learn new data and tech. It really is exciting to see the evolution of the world’s oldest form of advertising continue to evolve and break new ground.”

Lucie Jansen, head of investment, Spark Foundry Australia: “The OOH market is well into its journey to recovery. I would expect to see spend close to 2019 levels by the end of this year. This sector was certainly one of the hardest hit by the pandemic in 2020, along with cinema. All major OOH vendors saw double-digit growth last year but results are more mixed when comparing results to pre-pandemic levels.

“The total OOH sector has a number of things working in its favour when it comes to recovery and growth in 2022 and beyond. As the major players continue to convert their suite of assets to digital, more advertisers will embrace the technology and this will be a strong revenue driver for the OOH industry.

“The progressive leaders of OOH vendors, together with the OMA, are doing a fantastic job of bringing together players across the sector to form a collective industry voice – thereby encouraging a wider and stronger promotion of the media, and driving innovation and consistency of buying and measurement.”

Joanna Barnes, PHD Australia’s National Head of Investment: “The OOH sector was heavily impacted during the pandemic and has been in strong recovery mode since November 2021 when ad spend jumped by 47% vs the month prior. Currently we’re pacing at 87% of 2019 spend levels. The recovery has a lot to do with increased mobility, sectors returning such as travel and most recently increased consumer confidence.

“We’ll continue to see year-on-year growth but automotive and banking/finance do contribute significantly to overall industry ad spend. Ongoing supply chain issues and other external factors have impacted spend across all channels not just OOH. There is an absolute desire to utilise OOH as part of a channel mix due to its increased targeting capabilities and large scale impact as well as alternate buying methods in fixed and dynamic inventory .”

Tim Murphy at oOh!media: “We’ve seen a strong surge in demand going back to mid-October.
“The major advertising spending categories are back. The automotive sector has returned and is briefing after dropping off significantly, with manufacturing and supply chain issues over the last couple of years. A lot of the major manufacturers are out of stock and people are waiting for new cars but we are also seeing more messaging around electric cars and sustainability coming to the fore.

“We are also seeing big brands back with big brand messaging which is probably why we're seeing large format billboard demand at such healthy levels. We’re seeing some good use of, and great innovative thinking around OOH creativity, such as the recent 3D anamorphic creative execution by CGU on oOh!’s Bourke St Mall site.

“In addition, we always benefit off the back of strong advertising demand with the television networks, so we are getting some flow through on that front as well in the second quarter.

“We can see that airports and office towers are picking up and from our audience data they are returning to healthy volume levels. Briefing volumes have also increased.

“We have recently renewed and expanded our 20 year partnership with Qantas and I predict that we’ll see some further innovation across these environments throughout the year, giving advertisers unprecedented and unrivalled access to these premium audiences across the country.

“As people return back to offices and get more into a rhythm of new ways of working, those key influences at an advertiser and agency level will again start to appreciate how powerful these environments are.

“From a street furniture perspective we are at record revenue levels for our classic billboard street furniture.

“As the largest OOH media company we reach more audiences every day than any other media provider and with Better Ways to Buy we have over 500 audience buyergraphic segments mapped to every one of our 35,000 locations that deliver audiences at scale efficiently and effectively. We know through the outcomes achieved and ROI studies that a blend of digital and classic is best. A lot of advertisers are not seeing the effectiveness of having a very diluted share of time from an OOH perspective. So they are appreciating a stronger share of time which the classic format offers.

“We have also seen a return from big brands running big brand campaigns across formats. If you look at the likes of Apple, some of the major autos, the banks and tech businesses, they are all spending pretty heavily at the moment in OOH and they appreciate the classic canvas, no doubt about it. Classic from a large format perspective is absolutely holding its own.

“OOH is clawing back our share of the media pie quickly and our audiences continue to grow. Our latest audience data has seen a rise in Road audience numbers across the summer period and into Q1 with weekly audience volumes averaging 101% vs the rolling 52 weeks, from week ending November 8 to the week ending March 7.

“The easing of restrictions across the states has seen a strong return to the office. For example, in the week ending the 6th December, audiences across the office environment peaked at 118% vs the rolling 52 weeks average and the latest figures are showing weekly contacts upwards of 26 million for March.

“So audiences have stabilised and are now returning to growth versus other media. When you talk to a growing audience, and you talk about better networks due to digitization and then you talk to the work that's been done at a sector level too, uncomplicating some of the planning and buying and some of the delivery elements of OOH, that’s going to help as well.

“We are now in a position where the sector has come together better than ever. That’s going to play a role in making OOH a more efficient and effective solution for clients. All the main players have continued to evolve their networks over the past few years despite revenues bottoming out, work has still been done to enhance networks, so I daresay we will go back to the same rate of growth quite comfortably.”

oOh! Plans to continue investing and growing its network and asset base to reach more Australians, faster than anyone else.
“We are back at pre-covid capital investment levels,” says Murphy. “In terms of commercial partners and location opportunities, they are back to pre-covid levels. We will not sit back and be comfortable with our portfolio, we will continue to develop it and will be aggressive about that.”

John O’Neill, chief executive officer of QMS: “Out-of-home has well and truly come out the other side of the pandemic. We are seeing Australian’s return to life outdoors, with our roads and streets once again bustling with traffic as the country moves beyond lockdowns and restrictions.

“Through our Q-Data audience insights and measurement platform, our national audience is sitting at 105% of 2021 non-lockdown audiences. If we look at pre COVID lockdown numbers, national audience reach is at 97% of the 2019 average. Extremely encouraging signs of a strong recovery for the sector.”

“It’s fair to say the industry as a group is also stronger than ever. We have a number of new members within the OMA which makes the recent launch of MOVE 1.5 and increased standardisation around share of time and verification that much more effective.
“These initiatives help make planning, buying and reporting on OOH easier for agencies and clients, whilst ensuring there is increased trust and transparency and a greater peace of mind when including OOH on any schedule.”

“At QMS, we have always placed a huge focus on innovation for client success. With a vision to be digital led and backed by sophisticated data, we are seeing advertisers return in line with audiences and new ones emerge, as they invest in DOOH as an integral component of their communication strategy and ultimately take advantage of the medium’s continued ability to deliver big reach quickly.

“What makes us different is our continued development in data, technology and creative solutions, which we believe are leading the industry to a more digital future whilst ensuring brands are at the forefront of this change and able to take full advantage of the benefits.

“Digital has unleashed the true power of OOH which now sees us collaborating with more clients and their agencies than ever before to find better ways to connect throughout all stages of their marketing purchase funnel.”

Paul Butler, managing director VMO (Val Morgan Outdoor): “Audience levels are back at pre-pandemic levels across VMO environments in all of our retail, petro & convenience, and health club locations and our revenue is trending in exactly the same direction.

“Although out-of-home audiences over the last years have been disrupted, the compelling advertising advantages of out-of-home stand strong.

“As the last traditional mass reaching channel, out-of-home is now more important than ever for brands. With the continued evolution in screen technology (5G) and automated campaign deployment accelerating the speed to market with more dynamic creative and campaign flexibility, we have every reason to expect this trend to continue.

“New measurement is imperative to the outdoor industry. MOVE 1.5 provides a much-needed quality measure of digital out-of-home screens and critically, it finally provides retail out-of-home buyers the ability to evaluate campaigns using a common audience currency.

“With more dynamic creative opportunities on the horizon, and with header bidding going into beta testing this year, we expect programmatic will continue to accelerate as more brands enter the space and understand the benefits of a programmatic buying approach as part of their overall out-of-home campaign. We’ve seen month of month growth across our programmatic campaigns, and we’re seeing more and more omnichannel campaigns with complementary audience targeting between out-of-home and online audience segment.”

Max Eburne, chief commercial officer, JCDecaux: “Out-of-home is undoubtedly in recovery phase as Australia re-opens for business including domestic and international travel resuming. This is being driven by two key factors.

“Firstly, and perhaps obviously, out-of-home is getting its eyeballs back. Advertising always follows the audience and we’re seeing out-of-home demand rebound strongly as commuters return to road, rail, retail and travel. Secondly, out-of-home itself has evolved over the past two years of COVID disruption and comes back to the advertising table with heightened capabilities. Since 2020 JCDecaux has accelerated its digital growth and we now have 1450 digital assets across Australia.

“We also now have programmatic trading enabled across all four of our key asset categories: Airport, Railway, Street Furniture and Large Format, as well as forming partnerships with Adobe and Experian to drive audience and data capabilities.

“Many of JCDecaux’s clients have re-entered the market with a hybrid approach to out-of-home, using traditional real estate like buses for long-term branding messaging whilst leveraging the power of programmatic via digital assets to overlay more sophisticated audience segmentation and targeted messages in real-time.

“Beyond 2022 I truly believe that we’ll enter a boom period driven by the new opportunities that digitisation and the continuous sophistication of out-of-home capabilities are bringing . JCDecaux has been able to use the last two years to re-examine and refine a raft of our capabilities and are now even more agile and customer experience focused.”

Veridooh cofounder Mo Moubayed says the company, which partners with Omnicom Media Group, GroupM, and IPG Mediabrands to verify their DOOH campaigns, is seeing the recovery in full-swing.

“After two years of people being stuck indoors, advertisers are realising that an OOH impression is more impactful than other channels and are increasing their investment to reflect this,” Moubayed says.

“All formats are back with impact across all states. We’re also seeing that categories such as automotive, luxury, and tourism have returned with strength.

“Importantly, as Veridooh expands into new markets, the immediate demand we’re seeing from advertisers, agencies, and media owners in our product overseas is a real testament to OOH’s universal strength.”

Josh Fitzgerald, Head of National Sales, Revolution360: “After two years of being stuck inside, everyone has embraced getting out and about and there’s real positivity associated with experiencing things in person again.

“We’re seeing brands wanting to attach themselves to those positive environments by being active in out-of-home space.

“Apart from the obvious increase in audiences we can all notice ourselves, it’s being reflected through our 360Intelligence platform which uses audience mobile data to determine site reach and frequency. We’ve seen a 31.62% increase in weekly reach across our network for the back half of 2021 across Sydney and Melbourne, which brings us almost back pre-COVID audience figures.

Harry McGoldrick, Yakkazoo Head of Media: “Whilst the last few years for the sector have been unfortunate, out-of-home will continue to be the platform that defies modern media challenges.

“Fragmentation of eyeballs and user consumption are two of the biggest issues facing media, but out-of-home is the one channel where this is not the case and in theory it is a channel that has unlimited potential growth. Attention, viewability, and ad fraud continue to plague digital and video channels but again out-of-home is in a strong place to be unaffected.

“Technology will be key to the channel’s growth, both in innovation and creativity but also measurement. The recent Nike 3D billboard in Shinjuku created headlines around the world and no other platform has the same potential for brands to execute innovative ideas and engaging activations.

Amy Dascanio, General Manager, Enigma Media: “Outdoor companies have used the last two years to realign their product offering and invest heavily in the digitalisation of their inventory.

“With nearly 60% of OOH revenue coming from digital inventory, it provides them a strong position to recover in 2022.

“To secure additional market gains, investment into digitising regional markets will be key for the outdoor companies. Regional media has experienced early growth in 2022 with key traditional channels, TV, radio, and newspapers. However, there is a lack of high-quality, large format inventory, both static and digital, within key regional markets. This is a big opportunity for outdoor companies!

“In coming years, there is the potential for outdoor to grow its overall market share. This won’t happen until agencies and clients feel more comfortable with the measurement, and digital OOH campaigns become less test and learn and have a proven ROI.”

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