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Out of Home Advertising Outlook 2011 Posterscope USA
LookingForward/2011 Out of Home Outlook for the Year Ahead/2011 OUTLOOKThe Out of Home (OOH) industry redefined it core offerings amidst the recent recession and continued to invest in the industry.The industry grew 7.3% in the third quarter of 2010 and the first nine months have shown a revenue increase of 3.3%. Localand national ad placement has shown signs of steady improvement into 2011. (source: OAAA 2011)Despite the economic downturn, over the past decade (2001-2010), OOH revenue grew by nearly 20% and is expected tocontinue to perform well—better than the overall ad industry and other local media in 2011 (according to Magna, VeronisSuhler Stevenson, and ZenithOptimedia). While the total ad industry is expected to increase 1.9% and the local ad business isexpected to increase 1.1%, the OOH ad industry is anticipated to grow 5.1% in 2011.SEASONALITYSeasonal variances are expected to remain consistent with historical OOH patterns. Seasonal trends are common withinOutdoor, a segment of OOH, with the strongest occupancy rates during the spring and summer months and conversely thesoftest occupancy rates during the winter months. This is expected to continue, though increasingly the industry has seendifferent categories take advantage of opportunities during the “soft” periods of the early first quarter period. It is important todiscern OOH formats between “Outdoor” and OOH, a segment that increasingly includes an array of formats that are out of thehome. For OOH formats including cinema, place-based, airports, malls and sports venues, seasonal variances are less defined.OPPORTUNITIES FOR GROWTHOOH ad spend is on the rise, but increasingly the industry needs to demonstrate its versatility among the “scope” of OOHplatforms and its ability to deliver cost effective ways to reach both mass and targeted audiences. The continued convergingworld of communications is precisely why OOH remains strategically important—it can reach both audiences effectively and beused as a means of both brand awareness and direct response. As other media continue to fragment and become more nicheoriented, OOH can still reach a mass audience, is unavoidable, and it reaches people near the point of sale—in fact, it canliterally serve as the point of sale with new interactive and mobile technologies in place. As more people are out and about, theOOH audience is growing, with a broadening array of communications formats that collectively intercept more consumers moreoften in their daily routines.TOP CATEGORIES IN 2011The top OOH ad spend categories have remained constant over the past two years with local services & amusements rankinghighest since many local businesses fall into this category. In 2010, restaurants, entertainment, and communications (especiallywireless companies) have been strong OOH users and are expected to continue. Steady spending among automotive anddistilled spirits advertisers, perennially strong categories in OOH, is also expected to continue. The financial and insurancecategories are likely to continue to grow their OOH spend significantly. In 2010, the government and politics category wasparticularly strong. View Our Whitepaper Series on Slideshare: www.posterscope.com / Also visit us on Seven Ways to Integrate Social Media & OOH Understanding the EYES ON Revolution
continuedLookingForward/2011 Out of Home Outlook for the Year Ahead/ISSUES The OOH industry’s investment in the EYES ON measurement system is giving Outdoor (billboards and street furniture) new credibility in the media consideration process. The launch of EYES ON was a watershed moment for the OOH advertising industry and the industry is benefiting from the gradual integration of TAB’s EYES ON ratings into common business systems used to make sophisticated decisions about OOH inventory and competitive operators. Slowly OOH planning is being weaved into the OOH process. This integration ensures the core numbers applied by the OOH advertising industry are consistent across the buying and selling processes of planning, buying, execution, and post-campaign analysis. IMS and Telmar are about to release new OOH components within their media planning software systems which will be a great advancement towards planning Outdoor in terms of credible audience delivery. Continued education to the ad community about EYES ON and its value is a core focus of the OOH industry next year. One challenge is that not all operators and formats are contained within this measurement system. Other challenges include a gradual learning process—among various parties —planners, the OOH industry and the ad industry at large, and systems integrations (largely between planning software and proposal/charting inventory management systems). Regulatory issues also will continue to be a challenge though issues involved in Digital billboards are likely to make huge strides in 2011 as traffic studies seem to have effectively demonstrated their value and responsibility with respect to traffic safety. More regulation and legislation and federal oversight—especially with respect to local excise taxes on advertising are likely to be prevalent topics in 2011.TECHNOLOGIES Digital remains at the forefront of the OOH industry’s innovation curve and that will continue. OOH is fast becoming another connected channel capable of delivering unique, high-fidelity digital experiences that are varied and measurable. Today, the segment represents revenue roughly at $1 billion and includes digital billboards, digital place-based networks and cinema. There are approximately 2,000 digital billboards across the nation, a small percentage among a field of 400,000 + traditional billboards but increasingly popular nonetheless. Although digital billboards represent large capital expenditures, the deployment pattern for new digital billboards has remained steady with several hundred more to be built in 2011 and even more beyond. Digital “place-based” networks reach consumers at the point-of-sale and provide an effective way to reach targeted prospects and keep brands top-of-mind. The continued expansion of place-based digital networks will continue into 2011 and beyond. The consolidation and streamlining of this segment will continue more rapidly toward efficient aggregators and buying systems and more importantly planning systems like PrismScreen. Greater acceptance of this form of advertising will grow as accountability and measurement systems improve. Interactive technologies are the main growth opportunity as “Digital” transforms to become a multi-field of communications beyond one or two-way conversations. Mobile ads will start to contain more elements beyond basic images and text including the ability to directly buy products from within brand ads. Scanning ads with cellphones to pull up more information from a website, facial recognition technologies. More companies will continue to incorporate technology into their marketing to make their messages and promotions stand out including such interactive elements as virtual product demos like test-drives of cars and interactive storefronts that let consumers engage with the screen. View Our Whitepaper Series on Slideshare: www.posterscope.com / Also visit us on Seven Ways to Integrate Social Media & OOH Understanding the EYES ON Revolution