Outdoor’s Record Year Driven By TV Leakage, Expansion Of Digital – But Could Static Billboards Become Extinct?

It’s been a stellar year of growth for the Out of Home sector, according to the latest OMA annual revenue figures. B&T caught up with media buyers to find out what is driving investment in the sector at a time when other mass reach channels are struggling to grow.

Australia’s Out of Home sector has reported record annual revenues on the back of a rapid digital transformation, a growing uptake of programmatically-traded inventory and linear TV money pouring into the medium.

In 2023, ad spend in the sector grew by 12 per cent to $1.19 billion, eclipsing the previous benchmark of $1.06 billion in 2019. By category, roadside billboards revenue was up by 9 per cent to $507.8 million; roadside street furniture, bus/tram externals and small format revenue grew by 14 per cent to $271.3 million; transport (including airports) revenue increased by 40 per cent to $140.8 million; and retail grew by 6 per cent to $273.8 million.

Outdoor Media Association chief executive Elizabeth McIntyre told B&T media owners have invested heavily in digital screens and advertisers are now reaping the benefits, such as greater flexibility and ease in running mass reach campaigns.

“What we found coming out of the pandemic was that advertisers could see the reach and the impact that out of home could have and the flexibility with digital,” she said. 

“In terms of the overall category, we have a medium that is not fragmenting, it is a broadcast medium, as well as a creative medium. You can create stories and a presence without out of home that you just can’t do in other mediums. It’s giving advertisers mass reach, and our audiences are growing as cities continue to become more urbanised.”

McIntyre predicts another year of double-digit growth with the launch of digital audience measurement system MOVE 2.0 – scheduled to roll out in Q2 – enabling advertisers to measure audiences in regional Australia, and slice and dice audiences more granularly.

“We are moving into creatively amplifying what you can do with out of home that you just can’t do in other mediums,” she added. “What we’re seeing is that brands and agencies are looking for the impact, and we believe the medium delivers that impact in all different ways across a variety of formats.”

Media buyers put out of home’s growth down to several factors. The first trend is that out of home is benefitting from a decline in linear TV audiences and investment. Last year, the investment in linear TV was down 13.9 per cent, and one of the main beneficiaries has been out of home.

“Where advertisers are struggling to get those large audiences on TV, they are looking for other places where they can still get large audiences and out of home delivers that in a different way,” Omnicom Media Group’s head of OOH and audio partnerships John Lynch said.

Another driver is far more digital inventory. In 2023, digital OOH revenue accounted for 73.9 per cent of investment in the channel compared with 64.5 per cent the previous year.

“One of the big things that has been happening over the past few years is that advertisers are getting live on out of home far more quickly,” Lynch said.

“Back in the day, most of the stuff was printed and it would take a long lead time to get all your ducks in a row, your printer lined up and get material delivered to various different states to be posted. But the digital revolution – we now have more than 70 per cent digital signage – has driven the ability for clients to get up and running on campaigns very quickly. We can deliver material to an out of home company and they can get it live within the hour. 

“That flexibility and ability to do different things in digital space has definitely grown the pie.”

Are static billboard’s days numbered?

Avenue C founder and managing partner Daniel Cutrone said the rise of digital screens is attracting more advertisers to out of home.

“There is an opportunity for media vendors to generate more revenue from each panel with digital,” he said. “Since 2019, the investment in static billboards is down by around 40 per cent. We are probably going to get to a state where static billboards are no more and the network will become overwhelmingly digitised. This means that share-of-time on digital screens will become a big issue.”

Lynch believes that static billboards will continue to exist in some form for the foreseeable future, but will become limited to “really strong static sites”, such as the Glebe Island silos site in Sydney (pictured above).

Other developments driving growth in OOH include huge investments in new digital panel formats – such as 3D video screens; programmatic trading that opens the market up to advertisers with smaller budgets; and greater flexibility in cancellation terms as vendors are less rigid about the 90 day cancellation period that was the norm prior to Covid.

“We will continue to see a similar level of growth in out of home as the last 12 months, especially as linear TV audiences decline. It’s a mass reach channel you can trust to deliver audiences and consistent results,” Cutrone added.

Lynch also predicts another solid year for OOH, but warns that as more streamers – such as Amazon Prime and Disney+ – flood the market with advertising inventory, out of home advertising will need to work harder to attract similar levels of growth.