The Australian out-of-home industry’s (OOH) revenue forecasts are up again. That’s great. But sift through the positive figures and continuing technological evolution and the real story is that outdoor advertising has to become smarter, a lot smarter. Not in the way it is being traded — that evolution is already happening — but the way it is being executed.
PwC recently released the latest forecast for the Australian advertising industry covering 2015-19. As usual, the report highlighted not only numerical data of importance but more general takes on the future of the industry in this country. Total revenue is on the up, forecast to move from $710 million in 2014 to $856 million by 2019. And digital panels will continue to take a greater and greater slice of that revenue — from 14% in 2014 to 35 per cent in 2019.
All those figures are more or less where they should be. While digital panels are certainly the future of the OOH industry, as well as the trading benefits (such as programmatic RTB) that are a byproduct of the shift, there is still a place for static billboards, as witnessed by their slow drop in share. Arguably, PwC’s findings suggest this shift from static to digital is at a slower rate than most thought for a sector of the industry that generally embraces change. That’s largely because there is still high demand for the traditional billboard.
While that will still allow for programmatic trading to envelop the OOH industry at the same pace it has been (this in a way strengthens the path for programmatic direct), it means that with more money being pumped into the sector, those digital panels available will be heavily fought over.
Great for the OOH industry, great for advertising in general, great for adtech. But the challenge then falls on to the creative agency and/or brand to make the most of that digital panel. It would be a shame, to say the least, to go to all the effort to secure premium digital OOH and not get the most out of it.
Sadly though, it seems as though there is a disconnect here. In the recent figures released by Cannes Lions, OOH suffered a small drop in entrants this year. It is still, by some margin, the biggest category in terms of entrants, but the numbers fell from 5,660 last year to 5,037 this year. That’s a drop of more than 10% when arguably, thanks to an increase in digital panels (albeit slower than we perhaps thought), there should have been an increase in entries with the types of creative that digital allows agencies and brands to deploy.
In recent times we have seen some amazing creative work in outdoor — think Ogilvy’s BA Magic of Flying Campaign, or Whybin\TBWA’s ANZ GAYTM, which took out the Outdoor Grand Prix Award at Cannes last year. It becomes even more important when you consider the attention that outdoor gets. Those opportunities are only increaseing with digital executions.
Consumers pay close attention to OOH campaigns. According to a study commissioned by Clear Channel Outdoor in the UK, 82% of people believe that outdoor advertising revives a city. That’s a fantastic positive for the medium, but it also means that the panel with your creative on it will be scrutinised more than most advertising. Get it right and people will remember your brand for a long time to come, but get it wrong and the consumer, if they don’t ignore it, could potentially take it as a blight on the space around them as well. It’s a literal turf war.
Digital panel saturation won’t be an issue for many years to come. Ideally it simply will never be an issue at all. The last thing you want is a market with too many panels and a race to the bottom to desperately sell inventory. Although the trading of outdoor will, and is, becoming quicker and more efficient, on the flipside, the creative needs to be thought through even more to get the best results from the panels available, remembering that another benefit of the digital shift is ROI.