DOOH to grow 20% this year

The digital OOH sector currently accounts for nearly 10% of the total outdoor advertising market and its continued growth will help the market recover this year, the research firm said.

Prior to the downturn the leading players had invested heavily in digital displays, particularly CBS Outdoor on London’s Underground network and the Westfield Shopping Centre and JCDecaux at Heathrow Terminal 5. However, when spending cuts took effect across all forms of advertising, demand dropped dramatically.

Vincent Létang, Screen Digest’s head of advertising, said: “Despite being fashionable, digital display was a new and unproven format. In challenging times when media buyers must deliver ROI they reverted to tried and tested traditional media and DOOH was sidelined. At the same time many of the smaller, independent players went out of business.”

Things changed in Q4 last year when DOOH sales increased 30%. The first half of 2010 is set to experienced double digit growth and Screen Digest forecasts overall out of home sales will see high single digit growth in 2010.

However, the picture for digital out of home is not entirely rosy, said Létang. “For the second half of 2010, Screen Digest expects out-of-home advertising growth to slow under economic uncertainty but the digital element should continue to outperform the sector, as it is driven by growing volumes and premium prices.

“For the full year 2010, Screen Digest expects digital out of home to grow by 20%. Looking further ahead, the London Olympics in 2012 should herald a surge in demand and we expect to see further investment in digital displays by the major players to capitalise on being the host city.”

The results of a US study published towards the end of last year by Adcentricity found that 42% of US agency and brand marketers planned to increase their digital out of home advertising spending through 2009 and the first half of 2010.