Cathy O’Connor, CEO of oOh!media (pictured), has hailed the firm as a “rational” player within the market and issued a very positive assessment of the firm’s financial future — though at the expense of other media channels.
“We’re doing very well against other media and, as the largest player, we stand to benefit from that,” she told B&T.
“There are a lot of reasons why OOH is starting to rise in prominence in the media mix. Obviously, it’s got much lower CPMs and the more declines we see in other forms of main media in their audience numbers, the more compelling OOH looks because it doesn’t have the fragmentation risks of other forms of broadcast, which are about streaming platforms, largely.”
In its full calendar year results for 2023, oOh!media saw its profits jump 10 per cent to $34.6 million with revenue up seven per cent to a cool $633.9 million.
While many in the media and advertising landscapes tremble at the thought of declining media budgets — see dentsu, News Corp — O’Connor believes that OOH, and oOh!, in particular, is set for a very big 12 months.
“Our growth is about population growth and urbanisation and the relative cost of OOH makes it a very effective media channel,” she said.
O’Connor equally believed that, despite assertions that the cost of living crisis would keep consumers at home rather than going out for dinner and drinks, Aussies’ outdoorsy lifestyles would more than atone for any reduction in discretionary spending.
“Australians are, by nature, outdoor people. We can see the massive rise in travel that’s taking place internationally and domestically and we are very much living in the public spaces. It’s part of the lifestyle of Australians and New Zealanders… The pro of OOH is that it is free to move about public environments, people go to parks, people exercise and it’s very easy to enjoy your cities without having to put your hand in your pocket,” she said.
Of course, oOh! isn’t simply hoping on trips to the park and joggers to keep the wolves from the door. Instead, it has invested, and placed much stock in its new reooh retail media division which secured two long term contracts with two customers and a pilot program with an Australasian retailer last year. Separate reporting on reooh’s financial performance is expected to start in 2025, said O’Connor.
She also said that the firm’s “disciplined” approach to contract renewals, which saw it not renew a quarter of its large contracts in a renewed focus on the bottom line, will see it in good stead for the coming year. oOh! expects that its new contracts will deliver $30 million in annualised revenue upside from the middle of this year.
“We’re always balancing the cost of a renewal or a new tender agains the revenue you can achieve… When we say ‘Disciplined’ we’ve always got our eye on the profitable share that we can derive for a contract,” she said.
Pointing to its contract renewals with Woolhara Council and Sydney’s Metro trains, O’Connor said that they represented “great opportunities” for new revenue.
“I’d also make the point that no one contract is worth more than six per cent of our 2023 revenue. So whether we renew or don’t renew, we still have this scale,” she added.
“The question often being asked is whether the OOH players are being rational about what they’re paying for assets. The reality is that we’re a rational operator and we have won several big contracts this year.”
