Digital Out-Of-Home Continues On Double Digit Growth Track

RESEARCH BRIEF

FROM THE CENTER FOR MEDIA RESEARCH

Wednesday, November 5, 2008

Digital Out-Of-Home Continues On Double Digit Growth Track

The new PQ Media study: Digital Out-of-Home Media Forecast, 2008-2012, reports that the U.S. is the leading player in the DOOH industry, with 40 percent of the global spend. But the industry is growing fast overseas, driven by more liberal regulation of new technologies and pushed by the Olympic marketing in China this summer. Global DOOH spending will reach $6.1 billion in 2008 from $5.4 billion in 2007, with a CAGR of 14 percent from 2007-2012.

The most active DOOH advertisers in 2007 were CPG and electronic, followed by media and entertainment, food & drink, and retail. 66 percent of overall DOOH advertising spending comes from national brands, such as Pepsi, BMW, McDonalds and numerous other Fortune 500 companies.

Domestic spending in the category, which includes digital billboards and video advertising networks in transit, retail, offices, and movie theaters, reached $2.18 billion in 2007 and is expected to hit $2.4 billion in 2008. Digital billboards are the fastest-growing subsegment of the DOOH category, surging 44% in 2007 to $369 million, and expected to grow another 28% in 2008 to $473 million.

All three segments of the DOOH media market, VANs, digital billboards, and ambient advertising (placed-based media), contributed to overall market growth (through 2007). Due to the shift in advertising budgets, DOOH media surpassed growth in other OOH media, such as static billboards, street furniture and transit, and in traditional media, such as television, newspapers and radio.

Digital billboards, including at-road, at-retail, at-transit and at-entertainment, is the fastest growing DOOH sub-segment, surging 44.6% in 2007 to $369 million. Growth was fueled by the rapid deployment of at-road signs in most DMAs, and increased interest in smaller digital signs in malls and concerts, and on moving vehicles.

The DOOH media industry is expected to grow 11.2% to $2.43 billion in 2008, decelerating from steady growth of more than 20% annually from 2002 through 2007. The market will experience a CAGR of 12.9% from 2007 to 2012, with overall spending reaching $4.01 billion in 2012. 

• VANs, narrowcast entertainment, information and advertising content to target audiences in various out-of-home venues such as in-theater, in-office/entertainment, in-retail and in-transit  will remain the largest segment, reaching $1.40 billion in 2008, but it will exhibit the most dramatic deceleration of the three segments, growing 8.1% after a 25.3% gain in 2007.
• Digital billboards, driven by longer commutes, increased mass transit use, and new technology that integrated LCD and LED signs with broadband to manage message delivery, change copy, and provide clients with impression data, will remain the fastest-growing DOOH segment, with spending climbing 28.2% in 2008, driven by the increased rollout of signs in all venues.
• Ambient advertising, reaching consumers through methods that are relatively non-intrusive and often unexpected like signage targeting active consumers at sporting facilities, messages on consumer products aimed at the youth market, and scents emitted at retail outlets targeting female shoppers, will remain the slowest-growing DOOH segment in 2008, with gains slowing to 6.9% after five years in the double digits. Spending will reach $561 million in 2008.

According to PQ Media president and CEO Patrick Quinn, "DOOH has the power to engage consumers during captive moments for extended periods of time. Over time... it will become a key component of the media mix and take a huge bite out of traditional ad dollars in a post recession period."

Please find more about the forecasts and access to the Global Digital Out-of-Home Media Forecast here.

For more information visit www.mediapost.com