Outdoor media has returned in style, smashing forecasts as Australians rush outside with the end of pandemic restrictions, and media agencies scramble for summer campaign bookings.
Out-of-home is creating nose-bleed numbers. In July, Standard Media Index (SMI) numbers show outdoor 28% higher.
The August SMI, now with subscribers but not yet made public, shows a better than 28% jump, driven by billboards and retail.
The Outdoor Media Association puts net media revenue for the half year to June up 19.5% to $478.6 million. Digital OOH revenue accounts for 62.4%.
And market analysts so like the prospects of outdoor media, they are recommending ASX-listed oOh!media as an investment.
Macquarie Bank analysts say oOh! “remains our preferred traditional media exposure given audience patterns”.
Jefferies: “We view the out-of-home advertising industry in a positive light (long-term share gain from other advertising media) and we believe there has been solid improvement in industry structure in the past seven years with the top three players now controlling c90% of revenues.”
Financial services firm Canaccord Genuity: “OOH as a sector has made a strong recovery in CY22 to reach 95% of its pre-pandemic revenues, with upside to come from airports, railway stations and office buildings, in our view.
“Continued digitisation of the sector makes the format more attractive to advertisers and offers more flexibility to buyers of advertising.”
PwC’s latest media outlook says the outdoor industry is expected to grow 5.3% compound a year to 2026 based on a mid-point forecast. Digital OOH (DOOH) advertising revenue is expected to surge 10.3% a year.
Lorena Chiarella, Sydney trading director, UM, says the industry is anticipating a huge summer for OOH.
“Vendors have advised that inventory is already scarce in Q4 across some formats (namely street furniture and large format) and agencies are finding that lead time requirements are similar to that of Television (13+ weeks) to secure quality inventory,” she says.
“The fourth quarter of 2022 will no doubt be a big one for audiences being out and about as it will be the first uninterrupted summer in three years.”
Justin Ladmore, managing director, Media, Enigma: “After COVID, our clients had been itching to get their traditional broadcast channels back into the mix and we quickly saw the effect of adding traditional media back to the top awareness layer of our campaigns.
“Digital media did the heavy lifting to drive awareness over COVID and sometimes when a media plan has 100% digital media there is a sense of not being seen. We switched the traditional media back on and we appeared again.
“Outdoor spends have ramped up quickly. There is a real synergy on a media plan between outdoor at the top of the funnel and digital media towards the pointy end and because digital spend surged over COVID it makes sense that outdoor was the popular broadcast channel picked by media buyers to compliment it… and it continues to be that complimentary channel.”
Tim Murphy, chief sales officer, oOh!media, says the big volume networks such as billboards, both digital and classic, retail and street furniture are all back at 2019 revenue levels.
“This aligns to what we are seeing in regards to audiences,” he says. “Across our Retail and Roadside networks in week commencing September 12, audience levels were at 105% to the benchmark levels. That’s over 500 million contacts each week across the oOh! network.
“In every state people are back out and about even more than they were pre COVID.
“We are seeing big brands return to the Airport environment with some brilliant campaigns across lounges, terminals and inflight entertainment. Luxury brands are spending and professional services are also very active in this environment.
“As we all return to the office, we are seeing the audience reach at similar levels to pre covid, but frequency is down a little. The three days in office rhythm is real in pockets, but the high dwell environment and valuable professional audience is critical for many brands. By the year’s end revenues will be trending similarly to 2019 levels.
“Our forecast and forward bookings for Q4 are strong. It’s our open season, OOH’s peak time and briefing volumes are suggesting it will be a very healthy revenue period across our broadcast and impact networks.”
“Big brands are wanting big, iconic large formats to make a big impact. Advertisers are exploring and investing in 3D anamorphic and greater energy is being spent on the creative execution of OOH campaigns. Great special builds from brands like Amazon, Asahi, Kayo and Uber are making their campaigns more unmissable than ever.
“Our programmatic offering is continuing to evolve and through H1 2022, 40% of those spending were new advertisers.”
He says the buying market is short, with a higher percentage of revenue being written in the current month than before. The digitisation of networks and improving automation in the planning and buying process is allowing for this.
The increased flexibility being offered by all OOH providers is also supporting advertisers through indifferent supply channels and resourcing challenges.
“There are a number of categories that are returning strongly,” says Murphy. “Some of the major auto manufacturers have big product releases penned for Q4 and early 2023.The big banks are very active and as we approach summer, alcohol (and ‘zero alcohol’ alternatives) are going to be very active.
“Travel and tourism and restaurants are using OOH to inspire Australians to get out and about and the highly competitive media and entertainment sector are fighting for our attention with so many content releases and streaming options available.”
QMS, which last month announced the opening of campaign-based selling for its new City of Sydney street furniture network, says revenue has returned to 2019 levels and in the case of large format billboards, it has surged ahead.
Mark Fairhurst, chief customer officer, QMS: “Our Q-Data is telling us that audiences are back at 2019 reach levels across the portfolio. We are seeing audiences across our digital large format network at 101% of numbers pre-2019.
“As we launch our brand-new City of Sydney digital street furniture network, it’s been great to see a real buzz around a return to the Sydney CBD with our data showing audience reach back at 90%+ of 2019 levels for the last few months.
“The market always follows the audience and that is certainly playing out this year in terms of format selection.
“With the City of Sydney digital street furniture network launch, there is a buzz about street furniture once again and we are seeing this with strong demand in forward bookings through into 2023
“The market had been waiting for our re-launch of Australian OOH’s jewel in the crown. This is a world-class network that sets a new benchmark in street furniture, replacing street furniture that was built more than 20 years ago, before the Sydney Olympics in 2000!
“This marks the first time the advertising market has been able to buy this 26km2 geography as a stand-alone buy, giving advertisers the ability to reach big audiences in Sydney - 2.6 million people a week – two thirds of whom live outside the central and inner east suburbs.
“With the City of Sydney network launch, we are seeing the demand is super strong for the premium product we have created. Clients are booking well into 2023 and we have also signed long -term partners.
“With 90% of our assets currently digital, combined with ongoing investment into sophisticated and relevant data, research and technology capabilities, we are a digital by design OOH media business which allows us to be flexible. As a result, we can help clients like never before communicate to HUGE audiences at incredible speed.
“In terms of outlook, the fundamental drivers of digital OOH remain strong. Flexibility, agility and data utilisation have allowed OOH, particularly DOOH, to play an expanded role in marketing and communication plans.
“At QMS we are seeing a strong level of interest and briefing activity across Q4 and into 2023. With City of Sydney now sitting in an expanded QMS portfolio, we are well positioned to play a greater role in our customers’ campaign success now, in 2023 and in the years to come.”
Max Eburne, chief commercial officer, JCDecaux: “We’re seeing positive growth in both long-term and short-term investments. The increasingly digital nature of the out-of-home industry (62% digital revenues: OMA) enables brands to activate on shorter lead times than ever, with Programmatic the ultimate real-time out-of-home solution.
“Adoption of Programmatic Digital Out-of-home continues to accelerate. JCDecaux had seen 220+ advertisers across 72 different agencies execute programmatic campaigns with us since January 2021.
“This indicates that widespread education and adoption is materialising as it has done in other major markets such as the US where programmatic trading is forecast to be around 20% in 2023, and Germany where trading is between 20-40%.
“Programmatic Digital out-of-home enables greater sophistication than ever with advertisers able to build bespoke audience segments through first party and third party data with JCDecaux. These segments are then shared through Adobe Audience Manager with omnichannel DSP’s such as Yahoo and The Trade Desk then buy against the same audience segments in other digital channels.
“Long-term investment is also coming back and there is perhaps no greater illustration of this than in the Airport sector. SMI indicates that investment is up +145% YoY and no surprise with Domestic audience consistently now at c.90% of pre-COVID and international now close to 60%.
“Future-facing brands such as Optus have moved fast to secure long-term sponsorship opportunities such as their three-year sponsorship of Aerobridges at Sydney Airport. It’s also great to see international investment returning from overseas with blue-chip brands such as the Financial Times and Pernod Ricard now reinvesting into the Australian marketplace.
“We're also starting to see some new trends, such as increasingly conscious decision making from media agencies and advertisers around partnerships with like-minded environmentally-aware organisations. There are currently multiple surveys in market from the media holding groups looking to understand the ESG & DE&I credentials of major media owners.”
Mo Moubayed, Veridooh cofounder: “We’re seeing brands across all categories really embrace OOH and this is being driven by a number of factors.
“First, after COVID, rain, and floods, people appreciate being outdoors much more which means a bigger and more switched on audience. Second, the OOH industry has done a fantastic job at innovating over the past two years which has unlocked new levels of creativity, such as 3D campaigns and custom-built formats, which I think gives OOH its wow factor - you can’t do this stuff on a mobile, desktop or on TV. Then there is the increased appeal of OOH in a privacy-conscious era.
“OOH has the unique ability to enhance people’s environment without being intrusive and use data to make a campaign special to a community without being invasive. These factors are why we believe the future of OOH is environment, people, and data-centric.”
Josh Fitzgerald, Revolution360 national sales director: “Audiences are craving in-person experiences and the desire to be out of the house is bigger than ever.
“There is an increased appetite for investing in brand. The pendulum has swung too far in the direction of focusing on acquisition spending that the bottom of the funnel has now been exhausted. Brands are understanding the need to spend on increasing the scope at the top of the funnel for new customers.
“It’s still an incredibly short and unpredictable market but for the right idea, clients are open to having those longer term visions. Consistency in market is key and staying top of mind is critical – this is a difficult strategy to execute when trying to implement on a short term basis frequently.
“We keep a close eye on audience metrics via our 360Intelligence data platform, and we’ve seen a sharp increase in returning to normality across Tuesday to Thursday each week so there’s a real spike in sites reaching people on their work commute on those days. Monday and Friday seem to be the preferred WFH days and our sites that are in proximity to high street retail areas and that are residentially focused, see a higher frequency of people on those days. It’s been pleasing to see a large amount of people out and about on the weekends as well.”
Ashwin Govender, Half Dome Group business director: “We are seeing fantastic growth in OOH as people return to some semblance of normality in a post-COVID world.
“Across some of our key clients, confidence in OOH as a key brand-building channel is as strong as ever. For Maurice Blackburn’s recent brand launch, large format OOH played a key role in driving broad reach with serious impact. We were able to plan with confidence with a long lead time, resulting in a successful launch.
“Innovation in OOH is at an all-time high. We also activated a programmatic campaign for Maurice Blackburn across multiple formats with an audience-first approach.
“Some of our FMCG clients, such as Mayvers, have tapped into retail OOH with tremendous results, using the channel as a last-minute reminder before the point of purchase.”
Maurisa Mckillop, senior client director, Speed: “As expected, the bounce back for OOH once COVID restrictions eased has been swift and sizeable.
“I believe this downtime gave OOH publishers the opportunity to really sit back and think about their offering and an opportunity to revitalise the channel. The work across the board to digitise more and more screens as well as the introduction of 3D digital billboards and pDOOH has really brought new life to the industry. Because of this we are seeing clients express interest in OOH that would have not necessarily been there in the past.
“For our clients that use OOH regularly we are still seeing them commit to campaigns long term. They understand that the surge in popularity in the market has made it harder to book premium sites for longer periods.
“In my opinion, once more panels are converted to digital and the opportunity for a more dynamic trading model becomes available, short-term bookings will be the normality.”
The IMAA (Independent Media Agencies Australia) member Pulse Survey in June showed that agencies predicted that DOOH would grow by 25% or more in 2022.
Sam Buchanan, CEO, IMAA: “Yes, outdoor is definitely back. The number does not surprise me as people return to their normal lives following the pandemic and are out and about in CBD and community spaces more and more often. And the SMI data showed it with the biggest increase of any media at almost 29% With more digital screens on offer, and programmatic digital OOH growing, advertisers are able to really see the impact of their outdoor campaigns.”
Justin Singh, CEO, OIS, a third party OOH verification company: “Investment is most definitely back, with the number of brands investing in out of home media returning to pre-COVID times.
“As demand has returned, the short-term nature of the market has shifted back to a more long-term view to ensure quality inventory is received. During COVID, we’d often have a few days’ visibility before a campaign commenced, that would likely run for a month or so. We are now back to having much more visibility of upcoming activity that is running for six to 12 months, based on annual laydowns.”
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