Kinetic’s Future of OOH Report: How much will digital posters be worth?
The large number of variables influencing the potential growth of Digital OOH in the UK makes predicting future revenue growth for this emerging sector a complex challenge.
Analysis in 2010 by Kinetic and the Outdoor Media Centre estimated Digital OOH revenues would reach around £160 million by 2016, or 15% of total Out of Home media spend. A steady and consistent growth, but nothing that has promised to radically restructure the medium.
It is worth considering the recent past and the performance of Out of Home through the recession and gradual recovery. Percentage year-on-year growth figures from GroupM show that while revenues during 2008 and 2009 dropped they did not fall as far as many other media and bounced back strongly in 2010.
In fact only TV and interactive media (including display and search) saw a stronger return to growth. Industry consultation reveals a wide spectrum of views on what proportion of total Out of Home revenues Digital OOH will account for within a five year time frame.
Earlier this year, JCDecaux published estimates suggesting digital poster revenues could reach the £200 million mark as early as 2012, whilst Clear Channel has suggested that digital revenues in major markets and formats could reach 90% of OOH by 2020.
Beyond the medium term, revenue predictions and market share estimates for Out of Home media become less certain. Kinetic’s projections take into account these views and our own intimate knowledge of developments, consumer and advertiser demand. Importantly, they consider the whole industry.
Based on a set of criteria including the rate of Digital OOH roll-out, the likely impact of future tenders on investment, overall economic conditions, client and agency application and consumer demand, Kinetic now publishes its Digital OOH revenue estimates to 2020.
Kinetic’s analysis suggests it is very likely that Digital OOH revenues alone will pass Cinema within two years and Radio within five.
Kinetic predicts continuous growth in digital revenues through the short to medium term and an acceleration in revenues towards the end of the decade with DOOH becoming a £200m medium around 2018.
They also forecast that total Out of Home media spend will break the one billion pound mark before 2014, with digital posters’ share of income rising rapidly in the latter half of the decade to reach 25% in 2020.
This particularly reflects a likely proliferation of digital roadside 6 sheets and bus shelter sites.
Their analysis also reflects the inevitable time-lag between planning, actual deployment of technology and the growth of complementary technologies that could enhance revenue generation.
For the full report, click here.