Magna Intelligence and Rapport have released their latest report on global out of home media. The report reveals the state and trends of OOH in 70 countries, including total OOH spend, by segment, and digital vs static. This has been complemented by in-depth analyses and insights for the top 20 markets.
The report finds that OOH outperforms other traditional media formats and is the only segment that has experienced consistent growth in global advertising sales over the last ten years, thanks to digital innovation. APAC is the largest OOH region with almost USD$13 billion in sales in 2018, ahead of EMEA and North America. APAC is also the region with the highest OOH share (7.8% on average vs 5.6% globally).
According to the report, Global OOH advertising revenues grew annually over the last nine years (2010-2018), with an average growth of +4.1% per year over the period, to reach $31 billion in 2018. Retail is the largest contributor to OOH advertising revenues in most markets.
The US is the largest OOH market, which was worth approximately USD$7.4 billion in 2018, almost a quarter of global OOH ad revenues. The second largest market is Japan (USD$4.6 billion, 15%) followed by China (USD$4.0 billion, 13%).
The report points out that while other traditional media sectors are struggling to reach consumers in the digital age, OOH advertising is leveraging technology to remain relevant and attract new advertisers. For instance, high-yield digital billboards colonizing classic sites and new urban niches, to better audience measurement and the use of data to optimize cross-media campaigns in real time.
In addition, consumers are increasingly mobile and OOH does not suffer from the erosion of reach and audience that affects editorial media, or the brand safety issues that affect digital media. As a result, OOH is the only traditional media segment that has experienced consistent growth in global advertising sales over the last ten years.
“There has never been a more exciting time in the OOH (out-of-home) industry. The industry has exploited all the benefits of evolving digital technologies, but retain a unique geographical footprint in a way that no other medium can,” Michael Cooper, global CEO at Rapport, said,
The growing utilisation of OOH campaigns by digital media giants is both a testimony to the efficiency of OOH and a factor of future growth, as marketing spend in the sector is bound to grow further. Tech companies, such as Spotify, Amazon, Apple, Netflix, Hulu, have dramatically increased their spending in OOH advertising, across almost every world market in 2018.
Vincent Letang, EVP, global market intelligence at MAGNA, said, “OOH is the last advertising format that consumers can’t skip or block, and still reaching the young urban active. Combined with huge progress in campaign management, audience measurement and attribution, this explains why OOH advertising has grown steadily in the last ten years and will continue to grow, by 3% per year globally, in the next five years.”
In the report, global OOH ad sales are forecast to grow by 2.8% in the next five years (2019-2023) to reach USD$38 billion by 2023, while traditional media ad sales will be flat overall over the period. Magna also predicts the share of DOOH to grow to 28% globally by 2023 following an average growth rate of +12% of advertising sales between 2019 and 2023.
Gurpreet Singh, managing director at MAGNA APAC, said, “Growth in OOH spends is being largely driven by growth in digital OOH in most markets, and this will continue to be the big growth driver in coming years. As data and technology play an increasing role in OOH media, trading will move from buying ‘space & time’ to ‘impressions’ and ultimately we can expect it to move from buying ‘opportunity to see’ to ‘actual views and engagements’, bringing more accountability to this media. Interesting times ahead for OOH.”
Key Market Takeaways
• The Chinese OOH market is the third largest in the world, with USD$4billion in ad sales in 2018.
• Much of the Chinese population has urbanized, increasing the value of OOH advertising; 59% of the population lives in urban areas, more than double what it was 30 years ago.
• OOH growth will remain robust in 2019 (+9%), spurred on by strong digital OOH increases.
• The OOH market share (13%) is twice the global average of 6%. Because Singapore is a City State with a very high GDP per capita, OOH is attractive and competitive.
• OOH ad spend per capita is thus the second highest globally (USD$35).
• OOH spending will increase by 4% in 2019, a modest increasing following several years of weakness related to economic and trade related instability.
• The Malaysian OOH market is worth USD$130 million.
• This represents a high market share (15%) due to heavy road traffic and OOH expansion to new sites.
• OOH revenues grew by +10% in 2018, thanks to economic growth and the general elections.
• The Japan OOH market is the second largest in the world, with 521 billion yen (approx. USD$4.6billion) in 2018.
• The market share of OOH in Japan is double the world average (12% vs 6%) due to high population density and the relatively high costs of OOH media.
• The share of DOOH is below average (11% vs 18%) because of fragmentation (top 3 vendors control only 20%).
• OOH ad sales will be flat in 2019, and will grow by 3% in 2020 thanks to the Tokyo Olympics.
• OOH controls one of the highest market share in the world: 15%.
• Place-Based is the number one segment.
• The industry is loosely regulated and highly fragmented with leading vendor United Neon controlling no more than 20%.
• MAGNA predicts double-digit growth for OOH NAR in the next five years (22% for DOOH).
• The Australian OOH market is one of the most developed, with USD$28 of OOH ad spend per year per capita - the third highest ratio globally - in 2018.
• DOOH sales account for half of total OOH sales. Only two markets – Australia and the UK – have reached that milestone.
• The OOH landscape is very concentrated following the consolidation of 2018, with the top three media owners now controlling 80% of total OOH sales.
• Revenue growth will remain robust in 2019 (+10%), spurred on by strong digital OOH growth.
• The Indian OOH market is extremely fragmented and that is one cause of low DOOH penetration.
• Roadside billboard are the number on segment but transit and street furniture are developing faster.
• OOH NAR will grow by +12% in 2019 thanks to strong economic growth, general elections, and the cricket world cup.
• OOH NAR is forecast to grow by +7.5% per year in the next four years (2020-2023) driven by the opening of many new metro lines in major cities, starting in 2019.
• Media owners’ net advertising sales (NAR) will reach THB 15.1 billion in 2019, excluding cinema. This represents a market share approaching 20%, significantly ahead of the global average of 6%.
• OOH is driven by high urbanization and traffic in Bangkok, where OOH is frequently a complement to TV for driving brand recall and brand affinity.
• OOH ad sales will increase by +7% in 2019, following an even-higher growth in 2017 - +8%).