PQ Media predicts digital out-of-home growth will fuel the industry’s recovery after its worst drop ever
The out-of-home (OOH) media segment suffered its worst-ever drop in revenue in 2020, plunging 13.3 percent to $51.6 billion from 2019 — yet another victim of the global COVID-19 pandemic. But according to one media analyst’s predictions, the industry is poised to bounce back quickly and effectively between 2021 and 2025, thanks to an explosion of digital technology and advances in programmatic offerings.
PQ Media, an independent media analyst firm founded by CEO Patrick Quinn, is forecasting that global OOH ad revenue will grow 6.6 percent in 2021 to reach just over $55 billion, which still falls short of 2019’s total of just under $60 billion. However, PQ also predicts OOH will experience a compound annual growth rate (CAGR) of 7.3 percent between 2021 and 2025, fueled mostly by digital growth from a number of categories. PQ predicts global DOOH media revenue will rise at a 12.2 percent CAGR to eventually reach $25.0 billion in 2025, which will account for 34.2% of all OOH ad spend.
“While the economic damage wrought by the pandemic squelched a decade-long expansion that was building further momentum going into 2020, our research indicates that OOH media, and particularly DOOH media, is poised for strong growth in the second half of 2021, as the healthcare, transit, and corporate/education venue categories are expected to surge ahead with accelerating double-digit growth in 2022,” said Quinn in the report.
JCDecaux, Clear Channel Outdoor, Focus Media, Stroer, Lamar and Outfront Media — representing the six largest global OOH media companies — all exceeded $1 billion in revenue in 2020, according to PQ’s report. This year, the report also notes, China will surpass the U.S. as the country with the largest OOH revenue generation, $10.84 billion in 2021 to the U.S.’ $9.37 billion.
Within the U.S. market alone, the story has essentially mimicked the global trends. Gordon Borrell, CEO of media analysts Borrell Associates, said that until 2020, OOH in the U.S. was the only traditional medium that had never seen total revenue decrease from year to year. “That was mainly because the industry had more signage to sell, especially when converting static signs to digital,” said Borrell, noting that digital signs can carry up to 10 ads, where a static sign only runs one.
According to the PQ report, digital OOH ad revenue in the U.S. fell a slightly-less-precipitous 23 percent in 2020 over 2019, but like the global numbers, is projected to rebound in 2021, accelerate sharply in 2022 and rise at an 8.9 percent CAGR to $4.43 billion in 2025 for a 37.1% share of total U.S. OOH ad revenue. Categories noted for their growth include corporate and education digital place-based networks, expected to rise 19.4 in 2021, followed by healthcare (up 14.1 percent) and transit (up 13.7 percent).
The rebound of out of home advertising has been fueled by moves toward digitization, said Barry Frey, president and CEO of the Digital Place-Based Ad Association (DPAA), which represents most digital OOH firms. “Specifically, digital platforms, data, targeting initiatives, video screens, digital systems and processes have enabled us to come strongly out of this pandemic situation,” Frey said, who added that programmatic selling of DOOH inventory has also driven up revenue.
“Programmatic has demonstrated the flexible and agile nature of [OOH media] to pause and push schedules, [and] move campaigns to where the intended audiences exist,” he said. “Additionally, the deprecation of the cookie and IDFA issues is starting to move ad monies to the reliable value of advertising in real world context.”
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