Out-of-home (OOH) advertising is stronger than ever and is set to steal dollars from its dwindling TV counterpart, according to OC Fund Management’s head of investments, Robert Frost.
As Australia’s top advertisers increase their OOH expenditure, B&T spoke to Frost – one of the nation’s best-performing fund managers – to gauge his analysis and forecast for the industry.
The outlook for the overall Australian advertising market remains challenging, impeded by subdued growth rates in the current economic environment. OOH advertising’s continued success proves the medium to be an outlier to the declining structural trend.
According to the latest Outdoor Media Association figures, year-to-date outdoor media revenue sits at $625.1 million – a 16.3 per cent increase for the same time last year.
The same research revealed that digital OOH media revenue makes up 39.8 per cent of total media revenue, up from 25.6 per cent on the corresponding 2015 period.
Clearly, OOH advertising is increasing its share of the total ad spend pool. Moreover, the outlook for OOH remains robust with the ongoing conversion of static screens to digital displays, which typically drives a revenue uplift between 3.5 to 4.5 times for an OOH media firm.
Frost said advertisers are increasingly attracted to OOH which, unlike most forms of traditional advertising such as print and TV, has a growing audience driven by population growth and increasing population mobility.
“Outdoor is achieving materially stronger growth, with Australian out-of-home advertising revenue up for the first nine months of 2016,” he said.
“We expect this to continue over the next few years as more static screens are converted to digital. We expect a material amount of this growth to come from television advertising budgets.”
According to Frost, roadside continues to be the largest category in the OOH space, benefiting from the revenue uplift from ongoing static to digital conversion, and reflecting strong advertiser appetite for well-located digital signage.
Meanwhile, Frost said transit is the weakest segment, as the format typically does not lend itself well to digital screens.
As the OOH industry’s upward trajectory looks set to continue in 2017, with a healthy outlook based on strong fundamentals, B&T asked Frost for a run-down on three significant players in the OOH media industry – QMS, APN Outdoor and OOH Media.
He said QMS is a relatively new player in the Australian OOH space, and the firm has rapidly built a stable of digital screens in quality locations.
“Management has proven to be particularly adept at securing the requisite permits to convert static screens to digital, and digital revenue already makes up 62 per cent of QMS’ Australian revenue,” Frost said.
He noted that digital assets should place QMS in a relatively good position compared to competitors, with more static display exposure given the recent price deflation in static billboards.
According to Frost, APN Outdoor’s revenue declined after the company appeared to lose market share to QMS and Adshel in Australia and New Zealand earlier in the year, and changed its management team to address these issues across the Tasman.
He said APN Outdoor is the market leader in the roadside category, which he claims is the strongest growth category at present in the OOH space.
However, Frost said APN Outdoor also has a significant tail of static inventory which is suffering yield pressure as digital billboards cannibalise static revenues.
“APN’s static billboards were down about 6 per cent in the first half of 2016,” he said.
Finally, looking at oOh! Media, Frost said the firm is the market leader in the retail space – another high-growth category in the OOH industry.
“Again, digital conversion is the driver of growth in this category,” he said.
Foxtel Media has announced four new offerings to provide advertisers expertise in more targeted, dynamic media delivery as part of a realignment towards digital. The new offerings are Foxtel Xplore Audience targeting on Kayo, addressable audience targeting on Foxtel Go, the ability to target in-venue viewers on Fox Venues, and a new Dynamic Trading Platform. […]
On Thursday, Quantcast held their Virtual NOVA event, discussing the current state of the advertising industry, the end of third-party cookies, the open internet vs walled gardens, and data privacy and consent. The event coincided with the launch of their new Quantcast Platform. It is an intelligent audience platform powered by the company’s patented AI […]
Global marketing agency LEWIS today revealed findings from its new global research on gender inequality, conducted in support of the global HeForShe movement. You can read the report in full here. The report shows the impact and perceptions of gender inequities during the pandemic across 13 countries. The findings reveal an alarming trend: 98 per […]
Social relations agency, Haystac, part of the BWM Dentsu Group, has been appointed PR agency for Dairy Australia following a competitive pitch. As the national services body for the dairy industry, Dairy Australia supports the profitability and sustainability of dairy farming and its role in producing quality, nutritious food, while committing to the care of […]
While the Sydney Sixers won the BBL season ten trophy, Rexona Clinica won the summer sports marketing battle with a game-changing sponsorship idea. BBL 2020-21 series will go down as the ‘Year of the Pit’ after Rexona Clinical owned the summer after unveiling its new form of advertising sponsorship – ‘Pitvertising’. The concept, devised by […]