With its neon lights, gigantic displays and a citywide canvas like no other, Hong Kong‚Äôs reputation for fantastic outdoor advertising has been well-earned. But how is the industry for advertising‚Äôs original form faring in 2019 and can it stay relevant in the decade to come? Rick Boost speaks with some of the city‚Äôs biggest players to find out.
Out-of-home (OOH) is one of the ‚Äď if not the ‚Äď oldest marketing formats. And though it has always been known as a stalwart advertising medium, it has been equally hard to shake its status as supplementary to the mainstream duo of TV and newspapers.
Vincent Lam, chairman of outdoor solutions provider Asiaray, explains the stigma by saying: ‚ÄúIt‚Äôs because its viewing time is very short and nobody stands on the street to stare at the advertisement, except people like us. Most people would just have a glance of it.‚ÄĚ
However, as TV and print face a worldwide decline, OOH is the prodigal son returned and on the rise. An August 2017 MAGNA intelligence report pointed out global OOH as the only traditional media category to show consistent growth in the past 10 years, a trend that‚Äôs predicted to continue.
For Hong Kong, specifically, a 2017 admanGo study stated OOH took a sizeable 32% of all media expenditure.
Lawrence Chan, CEO of transport advertising specialists RoadShow, says: ‚ÄúIn 2018 Hong Kong, OOH and mobile ranked equally number four in media, representing 11% of the total market. TV and newspapers are facing very tough channels from digital and mobile media while OOH can still remain in a comparatively stable environment.‚ÄĚ
In Hong Kong, OOH has always been an essential tool for almost any major campaign because it‚Äôs tailored perfectly to the behaviours of Hongkongers.
‚ÄúHong Kong is a small place with dense population,‚ÄĚ explains Clare Ho, managing director of the ever-present outdoor operator POAD. ‚ÄúIt is effective to outreach consumers in high traffic locations. And, due to the living environment, HK households are relatively smaller in size versus other countries, thus a lot of people like to spend time away from home.‚ÄĚ
She cites a Media Economy Report figure that OOH reaches 90% of the Hong Kong population, and 70% of consumers‚Äô waking hours are spent away from home. And with those dense crowds, which provide a low CPM, it puts the audience in the firing line.
Chan says: ‚ÄúWhen you walk down the street you cannot lay your eyes on your handheld device. So, one way or the other, our messages will bombard you from different angles.‚ÄĚ
OOH to O2O to O&O
But far from being an enemy of OOH, experts across the industry are claiming that mobiles will be the key to a golden age of outdoor, and likewise, that outdoor will be an online-to-offline (O2O) saviour for digital.
‚ÄúThe shortcomings of online media are that it‚Äôs not impactful whereas out-of-home media‚Äôs main strength is that it is impactful. So, if the two work together it can bring the best of both worlds,‚ÄĚ Lam explains.
‚ÄúOne of the biggest advertisers in the out-of home industry is online products. Apps, games, anything that‚Äôs online. So, if online players regard out-of-home to be complementary or to do something they cannot do, well then, certainly they‚Äôre not going to revolutionise us. Quite the contrary, we will be helping them.‚ÄĚ
Also backing this up, Ho tells Marketing: ‚ÄúSome of the largest digital brands are fuelling outdoor ad spending growth. Facebook was the third largest advertiser by spend, Apple the fourth and Netflix the fifth.‚ÄĚ
That buck certainly has shown to get some bang, with OOH overperforming massively in relation to the comparatively smaller spend it is given compared to other formats.
The 2017 Nielsen OOH Online Activation Survey showed a 46% response rate of online activations as a reaction to outdoor advertisements. Nielsen‚Äôs stats also showed outdoor billboards leading to a 54% lift in search traffic, 38% in Facebook interactions and 25% in Instagram engagements.
With high quality content, OOH‚Äôs place in the relationship is able to go far beyond acting as mere physical signposts to digital domains. When outdoor work hooks audiences it can take on its own online life as photographs bounce around social media, drawing more attention to both the site and the brand. Not O20 as much as O&O (online and offline).
Lam says: ‚ÄúOOH will be great to become O&O. It will be the mainstream media, period.‚ÄĚ
For the newest generation of advertisers, with digital taking a massive focus, actually recognising what makes a great piece of OOH can be a daunting proposition.
‚ÄúWe have agencies where nobody knows how to do outdoor. Nobody trains them, they don‚Äôt learn it at school. Unlike TV and newspapers which you can learn somewhere. But not OOH because it involves so many things,‚ÄĚ Lam laments.
A growing focus on flashy tech advancements can hinder the most fundamental of those instincts.
As POAD founder and CEO Bruce Kong explains to Marketing: ‚ÄúSomething unchanged for no matter how many years is location. Selecting location is the most important determination factor for if it [an outdoor ad] is a success or not, and then one can move onto the technology.‚ÄĚ
He says clients might have ideas to turn a display into a digital marvel; something with 3D, projections or laser shows. And though providers may welcome those toys, that rush to wow can be self-defeating in a district that doesn‚Äôt suit it.
He says: ‚ÄúEven if your creativity is number one in the world, if you do it in the wrong place it‚Äôs wrong. So (use) the right location with the right technology.‚ÄĚ
All our subjects voiced the same opinion: to survive in this competitive sector, outdoor providers must be proactive and reach out to present clients with innovative concepts for unrealised sites.
Recognising a structure‚Äôs unique shape or placement is better than reaching for the same established high visibility sites and light boxes in the hope of an easy pay cheque.
Lam tells us: ‚ÄúIronically, traditionally the most left-behind sites turn out to be the best sites.‚ÄĚ For instance, a by-the-book operator may consider any quieter low traffic spot to be a bad site. Yet, a spot where pedestrians can stop is a place where a consumer can be further engaged by more than just a bright visual.
And though many sites are best suited to iconic LED displays, billboards or posters, in appropriate locations, the introduction of ambient sounds, touchable elements and even scents can produce a more intense and longer lasting impression.
OOH is the only media form able to take advantage of all five senses, but a thoughtful merger of technology with creative space management will heighten the benefits.
‚ÄúInteractivity is certainly important, but the most important thing is experiencing. OOH is the best medium to experience whatever the advertisers want them to experience,‚ÄĚ Lam says.
Roadblocks to the future
However, though there have been some amazing recent examples of this kind of fusion ‚Äď all the way to turning entire buildings into playable video game displays ‚Äď Hong Kong‚Äôs OOH pioneers appreciate there are inherent obstacles.
Chan tells Marketing about Roadshow’s own unrealised goal to revolutionise its product. A government consultation paper had called for smart city ideas, highlighting bus stops specifically¬†as part of the movement. RoadShow leapt to the challenge, offering up digital shelters that included interactive screens, audio capability and even liquid vapour sprayers. Unfortunately, in his own words, RoadShow was hampered by good old bureaucracy.
‚ÄúWe applied for 100 sites and one and a half years down the track, the TD (Transport Department) had only approved us for eight bus stops,‚ÄĚ Chan says.
‚ÄúThe panels work, but whenever we‚Äôre trying to fulfil the requirements of our advertiser, first we have to ask KMB (Kowloon Motor Bus) for permission and then TD for permission and it takes ages.‚ÄĚ
Similarly, applications to introduce features increasingly common to bus stops in Europe and Australia ‚Äď such as digital cameras and facial detection tools able to present user specific content ‚Äď have also been kept in limbo due to strict regulations. But a pilot scheme Chan intends to launch has an even bigger scope: better data.
‚ÄúIf you have facial detection software, you can read and have measurements. How many people when they walk past, how many of them are really looking at your panels,‚ÄĚ Chan says.
‚ÄúIn the old days you had to rely upon Nielsen to record statistics and then prove whether it was successful or not to broadcast your message through outdoor media. But if you can get the figures through your own devices you‚Äôre gonna burst the bubble. And some of the players are afraid of these kinds of truth.‚ÄĚ
Alternatively, Asiaray has its own digital project to bring to the table, but it‚Äôs moving slowly by choice. In an exclusive, Lam reveals to Marketing it is currently working on the potential of programmatic media.
‚ÄúThis is the future because if you imagine that operators have very little added value, do you expect them to survive the competition that is to come? Who is going to replace them? Programmatic could partly.‚ÄĚ
Partnering with a major digital company, Asiaray is developing its own content management system and demand-side platform for broadcasting and scheduling content. But his team is content to take its time to build a totally secure platform, and also temper its expectations with the wisdom of experience.
‚ÄúWhen people talk about technology, they expect you to pull something out of your magic box which might look like rocket science. What we do is something very plain, you don‚Äôt need technology, you need an idea,‚ÄĚ he adds.
The big picture
When Marketing asks what the years ahead hold for Hong Kong OOH, Chan drops a bombshell that could shatter the power balance between the city‚Äôs players, and combat high rents. Like outdoor advertisers in Australia and the US, the RoadShow chief sees a future in unionising.
‚ÄúIn Hong Kong we don‚Äôt have any union, in particular, a union for the outdoor media participants. I‚Äôm not saying we should form a cartel, but we have to form a union whereabouts we will be able to play against the landlords to increase our bargaining power. At the same time we won‚Äôt face any cut-throat price war with the biggest players.‚ÄĚ
Over at Asiaray, Lam‚Äôs concerns lie more with China‚Äôs rapid growth in OOH than any local competition, but it doesn‚Äôt bother him either. He lays out his thoughts on what the OOH industry should focus on doing: ‚ÄúAdvertisements are something that you want to use to impress your audience.
‚ÄúYou don‚Äôt want to say something and nobody cares. We should try and do something that will impress them and will be liked. They like to interact and like to experience, they feel very pleasant about it. They will like you and will like your service.
‚ÄúThis is what all advertising should be, rather than just tell them ‚Äėthis is what we do‚Äô here‚Äôs a sale‚Äô. Those were the old days, people want to get more. They don‚Äôt want to just see another advertisement. People don‚Äôt hate advertisements, but they hate bad advertisements, they love good advertisements.‚ÄĚ
This article was produced for the June issue of Marketing Magazine. For more features and other magazine-exclusive content from this and upcoming issues, you can subscribe to receive your free monthly print copy here or you can read our digital versions in their entirety¬†here.