oOh!media has reported a seven per cent bump in its revenues for the first half of this year compared to 2022.
With revenue now standing at $296.6 million and new contracts representing $30 million in annualised revenue from mid-2024, the company’s CEO Cathy O’Connor told B&T that its move towards digital signage and boost in roadside billboards were crucial to its continued recovery from COVID.
“Digital is driving growth more generally across the sector and we’re no exception to that, it has moved up to 68 per cent of out-of-home revenue,” she said.
“There’s incredible demand in particular for roadside billboards that are digital and that are high impact.”
Since the release of the results, oOh!’s share price has jumped by more than 6 per cent. However, it is still down by some 15 per cent compared to its year-to-date high in April, following a dour trading update for the first quarter of the year.
O’Connor would not be drawn on how much of oOh!’s revenue was driven by an increase in digital, only saying that the high-impact nature of the medium and the tactical and contextual benefits available to advertisers were why it “attracts premium rates.”
She did say that there were a “range of reasons” for the increased interest from agencies in digital OOH signage and that it was not simply because oOh! is converting more of its billboards to digital.
As a result, the company’s Road format saw revenue climb 12 per cent year-on-year and up by one-third compared to the first half of 2019 to $103.4 million.
Its Fly category, which is available at airports, unsurprisingly saw a 73 per cent jump in revenue to $21 million considering the airline industry is still recovering from COVID — though it still has not fully recovered to pre-COVID levels. Similarly, Retail saw a three per cent jump in revenue year-on-year to $65 million.
However, Street Furniture and Rail revenue declined by three per cent to $93.5 million. oOh! put this decrease down to the introduction of QMS’ expanded City of Sydney offering in September 2022.
Locate revenues, declined by 7 per cent to $8.3 million as a result of the sale of the Café and Venue assets in January 2023. However, the firm said that revenue is highly variable.
The decline in government category spend had “certainly” affected oOh!’s revenue, according to O’Connor but it was “more than offset by the recovery in other categories.”
Travel, banking and automotive — all traditionally big-spending OOH categories — provided the extra ad dollars to counteract the reduction in government spend. O’Connor also said that Retail was up 50 per cent in the first half of this year and expects this momentum to continue into Q3.
“These are very strong category performances for OOH that are more than offsetting what’s happening with government spend,” she added.
The Women’s World Cup, on the other hand, had little impact beyond spend, despite providing additional eyeballs.
“It made people be out and about in cities, so we think all the advertisers can count on our panels across eight different formats benefitting from increased eyeballs.
While the growth that oOh! reported for this half of the year was impressive, repeating that growth in the coming years as the world returns to normal post-COVID will be challenging. O’Connor explained that regional OOH will be a major growth pillar for the firm moving forward.
“We think that regional OOH is an opportunity for oOh!media. We have the largest regional OOH footprint and, in 2024, we will see measurement against regional OOH for the first time,” she said.
“That will help us advocate for the scale of OOH in regional markets against TV and radio.”