oOh!media Limited has seen its profits grow by 343 per cent to $56.2 million after the out-of-home (OOH) advertising sector was decimated by the COVID pandemic (lead image: oOh! CEO Cathy O’Connor).
The oOh! network saw its Road and Retail formats grow above pre-pandemic levels. Meanwhile, oOh!’s Fly format grew by 78 per cent in the second half of 2022 compared to the first six months.
oOh!’s Street Furniture and Rail formats grew by just 8 per cent to $196.5 million. The company’s contract with Sydney Trains expired in 2021, leading to a drop of $9 million in revenue. On a like-for-like basis, the company said its Tail revenue increased by 14 per cent.
Retail format revenue increased by 14 per cent to $142.9 million. The category itself grew in size, as well with the retail/lifestyle format in the Outdoor Media Association growing by 3 per cent compared to 2019.
The Locate format grew by 47 per cent to $17.4 million. The company said that while audiences have been slow to return to CBD offices, Locate’s variable rent profile ensured its profitability.
The company’s overall revenue grew by 18 per cent to $592.6 million.
Of course, with a potential recession on the cards, oOh!’s CEO O’Connor told B&T that the company was well-positioned to continue its post-pandemic growth.
“Our Q1 pacing for ’23 is up 8 per cent on the prior year and that certainly looks like a more optimistic Q1 results than we’re hearing from other listed media companies that have already reported. I think that’s because the structural growth of OOH is definitely playing out in the data.
“If you look at the 2022 year, we grew our share of the total media landscape in SMI by 1.9 percentage points to 12.4 per cent. In Q4, that was about 13.7 per cent. Notwithstanding how clients are thinking about this year, OOH is benefitting from a shift of ad dollars away from other media.”
O’Connor also explained that the development of its programmatic OOH format will continue to boost its profit margin.
“It’s still only a small percentage of how OOH is bought. But I do expect it will grow the further out we move as both agency buy-side systems and OOH operator systems catch up to the trend. At the moment, programmatic OOH is about 3 per cent of total digital revenue in 2022 and we think that’s likely to be about 5 per cent in 2023.
“The way in which the sector is thinking about programmatic is that it certainly provides and ease of trade but not necessarily a different price point to the way you might currently buy it in a more manual way. In many cases, the yields in programmatic are higher than some of the yields that have been achieved through a more face-to-face transaction. I’m not seeing it as a value killer, I’m actually seeing it as a new way to an addressable digital market.”
