oOh!media reported a 10% increase in revenue in its half-year results, with both key performance metrics and statutory metrics all rising.
AdNews spoke to Cathy O’Connor, CEO and managing director of oOh!media, about the drivers behind the strong results, the role that digital plays in the success of the out of home sector and the future for the outdoor media specialist.
O’Connor said strong performances from road, retail, and street furniture, which are now ahead of pre-COVID numbers from 2019, were key drivers behind the results.
“We really saw a very strong end to 2021 and what's happened is that momentum in those broadcast formats has just continued through to the first half of the year. So that is, first and foremost, what's driving the results.
“The other key factor is the operating leverage in the business, and we've had very good results in terms of converting that revenue growth into profit growth.
“We reported underlying EBITDA growth of 62% year on year to $51.5 million and adjusted NPAT of 20.4 million, and that's actually an eight-fold increase on the prior year, so you really start to see the structure and the fixed cost base of the business start to do its job with the revenue growth."
O’Connor said oOh!media is part of a very buoyant sector that is increasingly engaging with customers, both in a traditional and digital sense.
“Out of home really has put a lot of innovation into its measurement. It's doing really good stuff to standardise formats, and it's increasingly available through programmatic, and we're just finding that that's converting into an increased share of total media against other media.
“For the first half of 2022, in SMI data, what we know is that out of home took 14% of the growth in total advertising, yet share is currently for the half 11.6% of the total pie. You can see, because we're taking a high percentage of the growth, that augurs very well for out of home to continue to increase its share of media against other media."
O’Connor said that the announcement of dividends, combined with a share buyback of up to 10% of issued capital, demonstrates how confident the board is that the sector and oOh!media’s place within it is well positioned for growth ahead.
O’Connor said that contrary to some of the narrative about the current macro-economic environment, oOh!media is finding a far more engaged, proactive and forward-planning customer base than reported.
“Certainly, in out of home’s case, the briefing activities are strong. For Q3, oOh!media in pacing at 37% up year on year, and that is obviously off of a Q3 that was somewhat impacted by lockdowns last year, but even so, the sector grew 19.8% to June.
“We won't know the extent of that until the end of the quarter when the RMA publishes the industry data but it certainly feels like the momentum has carried through the second half.”
O’Connor said that digital is key to success, with 62% of industry revenue coming from digital and oOh!media sitting close to that average in their own portfolio.
“MOVE 1.5 is really allowing us to give advertisers more to work with around the measurement and assessment of digital and how it works and where it's most effective.
“What we know from MOVE 1.5 is it's a combination of both classic and digital that provide the best ROI and superior reach and frequency. In oOh!media’s case, we will always advocate that it's the blend of both static and digital that gets great ROI.
“What we're also seeing from a category point of view is that most of our top 10 categories are up year on year, and several of them are back ahead of 2019 levels, so that just augurs well for the sector around continuing to go back to its higher mark."
O’Connor said that as the industry's largest player, there is a lot of growth for oOh!media in ensuring that they continue to advance the sector against other media.
“We've stated firmly that we are an out of home business first and foremost and I think the breadth of our assets and our mass reach proposition is quite unique in the sector, and we think will continue to deliver us growth into the future.
“We're doing a lot of interesting partnerships, particularly in the content space. We announced a big partnership with News Corp, which is effectively bringing a better standard of content to all of our various content environments, whether they’re offices, airports, or some parts of retail and suburban street furniture.
“Further digitisation of our assets is an obvious thing we'll continue to do and we continue to innovate around things like 3D anamorphic technology, which is getting a lot of interest from advertisers - just new breakthrough thinking in driving levels of creativity in the sector.
“We also launched our new creative services unit, POLY, and this is our strategy in the post-Junkee era. We've had an enormous response from big brands and agencies wanting to partner with us to really look to inspire clients into this fascinating new world of digital out of home, and to use the medium more adaptively and more tactically.
“There's plenty of reasons to be optimistic. It's why we think all of our growth will come from within the sector and we’ll be a very proud, successful and leading pure-play out of home business if our strategies are successful, which they will be."
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