Digital Drives Out of Home Renaissance

In the first of two exclusives analysing the latest adspend figures, Warc’s James McDonald examines a thriving out of home sector.
UK advertising expenditure for the out of home (OOH) sector rose 5.1% year-on-year to £271m in the third quarter of 2015, with full-year adspend estimated to have reached a new high of £1,054m, according to the latest results from the AA/Warc UK Expenditure Report, released this week.
Adspend of £271m was a new third quarter record for the OOH sector, surpassing the peak set in 2012 during the London Olympics for the first time.
Further, our preliminary estimate of £1,054m for 2015 marks 3.4% growth from 2014 and the highest annual total recorded during 34 years of monitoring. Ad expenditure for the sector is expected to rise still further this year, at the faster rate of 4.9%.
The out of home data within the Expenditure Report are provided by Outsmart, the industry body, which surveys its members for detailed ad revenues each quarter. The Outsmart data show that roadside ads accounted for approximately 50.9% of spend in Q3 2015, up 2.3pp from a year earlier on a like-for-like basis.
Transport also increased its share from the previous year, by 1.9pp to a total of 40.2%. Advertising in point of sale (PoS), retail and leisure environments made up the annual shortfall, with a share of 8.9% in 2015 demonstrating a 4.3pp dip.


The out of home sector has been experiencing somewhat of a renaissance in recent quarters, with digital technology galvanising trade. The amount spent on advertising via digital panels comprised 30.6% of the OOH total in Q3 2015. This is the highest share recorded for digital versus its traditional counterpart, and marked a 2.3pp increase from the previous year.

Furthermore, the latest Expenditure Report data show that over two-thirds of the new ad money in the OOH sector between July and September 2015 was specifically for digital panels.
We expect this trend to hasten with the launch of new programmatic trading networks in the UK. Google is currently trailing its DoubleClick platform in outdoor environments, while Kinetic has signalled its intent to launch a programmatic offering in Q1 2016.
The world’s first programmatic advertising network for the outdoor industry was launched in Australia during May of last year and adoption has been swift; Warc’s international data show double-digit growth in Australian OOH adspend last year.


This evolution within the out of home industry comes at a time when the UK display market is becoming increasingly competitive. All media bar desktop and mobile internet are forecast to have lost share of UK display adspend between 2012 and the end of this year.
“There are very strong signs that the OOH medium is in great shape, and getting better. All spend and growth trends are looking very positive,” said Alan Brydon, CEO of Outsmart.
“Whilst technology is driving consumer behaviour in ways that are bringing challenges to all other media (fast forwarding, ad blocking, audience decline, etc), it is only driving opportunities in OOH.
“And there are very clear signs that the use of the medium isn’t only growing, but it’s getting better as well. Clients and agencies (creative and media) are applying creativity, relevance, automation, data and technology in all sorts of ways to make their use of the medium more efficient and more effective.”
Via: Mediatel 

UK Adspend Expected to Grow a Healthy 7.5% this Year

Carat has today published its updated forecasts for worldwide advertising expenditure in 2014 and 2015, with market optimism demonstrated through strong global growth and regional forecasts.
Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest forecast shows overall global advertising revenues accelerating by 5% in 2014, an increase on the 4.8% predicted in March 2014, while year on year growth for 2015 is predicted at 5%.
From a regional perspective, Carat predicts further positive momentum in 2014 for North America and Western Europe, with levels of adspend in North America expected to exceed the pre-recession peak in 2007 for the first time by the end of 2014.
Western Europe is predicted to see a return to positive growth of 2.7% after two consecutive years of declining in adspend, driven by a strong UK advertising market forecast to grow by 7.5% this year.
While forecasts show a slight decline in growth when compared with predictions from March 2014, Asia Pacific and Latin America are still both forecast to outperform global predictions, with growth rates for 2014 of 5.4% and 12.1%, respectively – the only regions to see double digit growth in some markets.
By media, digital outperforms previous predictions for 2014 with year on year growth forecast at 16.1%. Digital is also expected to increase its total share of spend, reaching 20.5% in 2014 and 22.6% next year, when it will outpace the combined magazines and newspaper global share for the first time.
While a steady decline in print is expected to continue, all other mediums are predicted to achieve year on year growth of approximately 3-5% in 2014 and 2015.
“With the global recession further behind us and a healthy trend of 5% year-on-year global ad growth, there is positive momentum building across the industry,” said Jerry Buhlmann, CEO of Dentsu Aegis Network.
Via: Media Tel

The Media Landscape June 2014: Global Adspend Forecast

The mid-year adspend forecasts from ZenithOptimedia and GroupM indicate a positive outlook on the global advertising market from this year to 2016.
ZenithOptimedia predicts adspend in the next couple of years to grow in line with increasing GDP levels globally at around 5.7%. The company believes adspend growth could be higher were it not for the ongoing conflict in Ukraine and subsequent economic sanctions imposed on Russia.
GroupM’s forecast for global adspend is slightly lower in comparison, staying close to the 5% level for the next two years.
Key Points

  • Both forecasters expect Outdoor to grow in line with Global Media to 2015
  • Latin America enjoys highest adspend growth forecast due to 2014 World Cup & 2016 Olympics
  • North America predicted to lead ad expenditure growth among mature markets; Low but positive adspend increase in Northern & Central Europe
  • Top 3 advertising markets in 2016 forecast to be USA, China and Japan

For the full report please click here.
Via: JCDecaux One World

Digital OOH Adspend to Rise 11%

Global digital out-of-home (DOOH) advertising revenues are expected to increase to 11.3% in 2014, buoyed by an improved global economic outlook and increased adspend in certain categories, a new report has forecast.
According to research firm PQ Media, this will be an improvement on last year and it expects strong growth in the US this year on the back of increased adspend on healthcare and political campaigns.
Global DOOH ad revenues increased 9.3% to $8.9bn in 2013, the report found, with Asia-Pacific accounting for $3.83bn and the US, the world’s largest national market, for $2.37bn. China followed with revenues of $1.87bn.
US DOOH media revenues increased 8.7% in 2013 and were boosted by spending on healthcare, especially related to the Affordable Care Act.
Asia-Pacific performed well because of a strong rebound in Japan and “surging growth” of 23.6% in Australia, PQ Media said, which also noted that Brazil recorded the highest worldwide growth of 41.9% because of digital investment ahead of its hosting of the FIFA World Cup.
Although last year’s worldwide revenue growth of 9.3% was lower than in previous years, the report suggested that consumers are becoming more open to DOOH.
Consumer exposure to DOOH media grew 7.2% to an average of 14 minutes per week in 2013 and it is expected to grow by a further 9.5% in 2014.
PQ Media said consumer exposure will be driven by higher engagement with DOOH media deployed for the World Cup and the Winter Olympics in Sochi, Russia, but also by expansion of existing DOOH media on traffic-related sites in large cities.
“Global digital out-of-home media revenues are on pace for accelerated 11% growth in 2014 following three consecutive years of slowing expansion,” the report said.
“A dynamic combination of sporting mega-events, increased adspend on healthcare and transit video nets, and a streaking DOOH sector in Australia are expected to fuel the industry’s best performance since 2010.”
Via: Warc

IPA Bellwether

Marketing budgets have increased for the seventh consecutive quarter, according to the Q2 2014 IPA Bellwether Report.
A total 15.2 per cent of companies registered an increase in their marketing budgets during Q2, while the end-of-year financial results for 2013 to 2014 revealed that 20 per cent of companies had increased their budgets, resulting in the IPA deeming it “the longest period of continuous growth in the survey’s 14-year history”.
As the economy itself is set to expand, the Bellwether report predicts a real-term increase in ad spend of 6.1 per cent for the year as a whole.
Chris Williamson, chief economist at Markit and author of the Bellwether Report, said: “Marketing spend is surging higher as companies remain upbeat about the future. The extent to which business confidence has shown continual improvements over the past year is remarkable, generating a major inflow of investment in marketing.
“Companies reported that spending on marketing and advertising activities showed the strongest rise for a decade last year. This year’s budgeted spend, which was already set higher than last year, has been revised up again in the second quarter, setting the scene for a bumper year.
“The survey also adds to a growing body of data which points to the UK economy sustaining strong growth as we move into the second half of the year.”
Internet marketing saw big increases in investment, with budgets up 14.7 per cent, while search budgets also surged a further 12.9 per cent. However, market research budgets dropped 2.4 per cent.
Bellwether further predicts a slower increase in ad spend of 3.8 per cent in 2015.
Full IPA Bellwether report
Via: The Drum

Out of Home Adspend Forecast to Exceed £1bn in 2014

In the final part of MediaTel’s series looking in detail at the latest UK adspend forecasts, Suzy Young, data and journals director at Warc, exmaines how new digital technology is accelerating growth for the out of home sector.
In Q1 2014, out of home advertising expenditure dipped 2.2% compared with the same period a year ago, according to the latest data released in the Advertising Association/Warc Expenditure Report this week. But this is expected to be just a temporary blip, and Warc forecast consistent growth throughout the rest of the year and into 2015.
Warc predict annual growth in the out of home sector of 2.7% in 2014, reaching a total of £1,017m. This is the first time the sector will have surpassed the £1bn mark. The pace of annual growth is expected to accelerate to 5.9% in 2015, or £1,077m.
In recent years the out of home sector has performed consistently well, recording year-on-year growth in all but four of the last 31 years, with these dips occurring in line with the total ad market, following economic recessions and the dotcom crash in 2001.
Note: Outdoor Media Centre; AA/Warc. Source: AA/Warc Expenditure Report.
The London Olympics in 2012 provided a significant boost to out of home ads in particular, with spend rising 25.4% year-on-year in Q3 2012 and helping the annual total increase by a strong 9.5%.
According to YouGov research, 62% of visitors to the Games were aware of outdoor advertising related to the event. Consequently, the AA/Warc had initially forecast a drop in adspend for 2013 given the lack of a similar event, but out of home maintained its upward trajectory to register growth of 2.0%.
One of the key reasons for this success is the sector’s rapid adoption of new digital technology. As the chart shows, digital’s share of total out of home advertising expenditure has grown significantly over the last 11 years – when the traditional vs. digital formats were first tracked. Digital adspend has grown from a 1.4% share of adspend in 2003 to a 21.6% share in 2013.
Mike Baker, CEO at the Outdoor Media Centre, said: “In 2013, outdoor beat expectations, growing 2% over the spectacular Olympic year. What’s behind the continued growth? Digital is the main driver, with consistent investment by media owners into high profile sites such as Clear Channel’s Storm panels on Cromwell Road and Outdoor Plus’ Vauxhall Cross.
Note: Outdoor Media Centre; AA/Warc. Source: AA/Warc Expenditure Report.
“Importantly, the footprint of digital has expanded geographically, including JCDecaux’s Trinity Leeds, Mediaco’s Citylive sites in Manchester, as well as new sites in Newcastle (Ocean), Birmingham (Signature) and Glasgow (Forrest) and Cardiff (blowUP).
“Advertisers continue to find a place for outdoor on their schedules, and the number of million-pound clients now stands at 159. Route, our audience measurement system, now covers just about all the environments.”
According to the Route research carried out by the Outdoor Media Centre (and also published in topline form as part of the Expenditure Report), roadside panels accounted for 28.4% of all out of home panels monitored in March this year (372,818 panels). The next biggest formats were tube carriage interiors at 24.4% and bus panels at 18.1%, as detailed in the chart below.
Source: Route, Outdoor Media Centre; AA/Warc.
Via: MediaTel