The strong pace of advertiser activity in the out-of-home industry (OOH) hasn't relented from Q4 of last year, according to Val Morgan Outdoor’s (VMO) MD Paul Butler, as not only did the wider sector grow on average 8% in 2024 but VMO is also in growth over the last 12 months.
The December quarter for the OOH industry was up 6.6% to $393.8 million, and Butler said that while there’s a “slight softening” in Q1 due to the impacts of the economy and uncertainty around interest rates, forward forecasting into Q2 and beyond by VMO “looks quite good”.
“We're seeing much stronger growth from Q2 onwards so there’s reason for optimism,” he said.
That optimism is reflected in broader market trends, with Butler saying more agency groups are leaning into programmatic OOH and more clients are buying impactful dominations, but that the key area to watch in 2025, as it is for many industries across the advertising world, is measurement.
The Outdoor Media Association’s audience measurement system MOVE 2.0 is slated to arrive after delays from last year and will bring with it complete outdoor measurement, 52 weeks of the year, across both metro and regional locations.
The platform is being built using mobility data from one of the largest surveys in Australia and it’s intended that by integrating this syndicated audience research and consumer product data, providers can improve the accuracy of their offering by integrating currency-level MOVE 2.0 OOH data with existing datasets.
It's also intended that media planning and buying software vendors can improve the utility and functionality of their products by integrating MOVE 2.0 OOH data onto their platforms.
Butler said that as a result, he’s “really optimistic” about that improved visibility providing more interest in VMO’s place-based assets that haven't had third party measurement available to them before.
“I see a real opportunity there for growth over the next three years once we've got that measurement system in place,” he told AdNews.
“We'll start to see how the different formats work together within outdoor to provide optimum outcomes, so planners and buyers will have more formats to consider in the one platform than they’ve ever had before.
“I think what's been a real point of difference for outdoor is all the major vendors have stuck together on the journey and we see the opportunity for the sector. The digital migration over the last five to 10 years has been really good for growth, made outdoor more interesting to buy and much more immediate in terms of delivery of messages with better creative and quality of creative output.”
The wider Val Morgan group recently used its annual upfront roadshow to announce Validate, a solution combining the power of Val Morgan Cinema, VMO and Val Morgan Digital’s existing channel audience measurement platforms with extensive new consumer data sets across hundreds of categories and brands, all overlayed with location and movement data.
This will enable clients to target and report against high-value audiences across a breadth of product categories simultaneously across the three Val Morgan channels, and facilitate brands to access cross-channel optimisation, sales attribution and market share uplift.
Butler said that the company will launch Validate in H2 of this year, but that it will be a 12-to-36-month project in terms of fully rolling it out to the market.
“The interest and appetite and the amount of questions that we got from the market [at ValFronts 2025] were hugely encouraging,” he said.
“Everyone was really enthusiastic about it, because while we've been individually really strong as three different business units of outdoor, cinema and digital, we've all grown really, really healthily over the last five years.
“The market has wanted more understanding of what a combination of the three channels can do at a campaign level or for more audience segmentation and insight and Validate is the best combination of third-party data partnerships with our own research metrics.”
Butler said that the introduction of such a solution will make it much easier for agencies to understand what they're going to get from a campaign reach and frequency perspective if they buy across the group, or if they want to target specific behavioral segments or lapsed buyers, how they can do that across the wider network with accuracy provided by those third-party data partnerships.
“Specifically for outdoor, the sales attribution opportunity that Validate provides is also really exciting and a point of difference because we will have the ability to measure sales across not just one major retailer but a broad range of grocery, liquor, convenience, pharma retailers and more, delivering insights on ROI,” he said.
“We will understand from an advertiser category and product skew what the total sample of opportunity looks like from a sales perspective, so it'll give you a more robust insight into that, and that's allowing us to have those conversations around outcomes that we haven't necessarily had before.
“I think it'll give us a really competitive advantage in that space.”
Val Morgan also used its upfronts event to introduce another solution - Category Entry Packs.
For nearly a decade, brand marketers and media planners have been using Category Entry Points (CEPs) to enhance campaign effectiveness by strategically concentrating activity on the moments of highest consumer receptivity.
In response, Val Morgan created Category Entry Packs, which enable brands to buy against CEPs with either the ease of prepackaged campaign packs, or the flexibility of building their own.
It isn’t just products and capabilities where VMO is expanding in this year, but also physical real estate, with 2024 proving a particularly busy period for the outdoor brand in that space.
In May, VMO secured an exclusive agreement with Stockland to manage the operations of 22 large format digital screens, strategically positioned throughout nine Stockland town centres across Australia.
Two months later, VMO secured the exclusive advertising rights to Mall 88, a mixed-use retail precinct in Sydney’s Lower North Shore, bringing to life a three-level shopping centre, anchored by a Coles supermarket, a public library commercial office spaces, over 600 luxury residential apartments and an open-air plaza at ground level boasting a dining precinct.
The end of July saw the expansion of the VMO On-The-Go network with the securing of advertising rights across 500 premium petrol and convenience locations due to the acquisition of The Media Shop (TMS) Ignite network, a deal first reported in AdNews in June.
Butler said the strategy for VMO is always a hybrid of organic growth – which includes developing strategies to better sell the existing suite of assets in different ways through insights, data and solutions like programmatic - as well as more CapEx investment and acquisition-based growth.
“We do both and we expect probably almost a 50/50 blend in terms of our performance as a business with those things, and one feeds the other and vice versa,” he said.
“The biggest acquisition we did last year was the TMS acquisition, which gave us access to Viva Energy and the Coles Express network. That's really fuelled good growth across our petro convenience circuit. We're now three times the size of our nearest competitor in that space.”
Butler said the “big battleground” for VMO in 2025 will be retail OOH, however, where the company has just signed a yet-to-be-announced major renewal plus growth contract, which will secure 100 locations - 60 of those brand new for VMO - rolling out over the next six months.
“We want to do a bit more work in-market around reframing some of the narrative in retail,” he told AdNews.
“There's a lot of noise around the growth of retailer in-store networks and a lot of investment in those channels, and we're fully supportive of that, but we just want to ensure that the roles and the opportunities for different formats are clearly defined.
“When we look at our mall-based networks, all of the screens are in an uncluttered environment, facing the audience. They're all digital. They're either smaller screens that are driving path to purchase or larger screens that are driving brand impact, plus taking people into points of purchase as well. What that offers advertisers is 100% of the audience opportunity and a really clear and defined way to connect with audiences within that shopping mindset.
“Once you go into that store, you’re there for a specific purpose, and the audience opportunities are more limited to that environment, and not necessarily the broader shopping precinct. That’s not saying one's better than the other, but there's different roles for both of those environments, so we want to do more work just to make sure that's well understood.”
Butler said another key element for retail OOH is expanding the thinking around how to take people on that path to purchase journey.
“VMO’s petro convenience circuit now is really convenience shopping – it’s people on the way home to do their top up shopping – and most of those convenience locations are stocked by Coles or Woolworths, so it’s an extension of a grocery buy,” he said.
“When you look at the top two sales growth drivers in-market, it really is grocery and convenience, and we would have more media than pretty much anyone else in outdoor that connects shoppers on that path to journey across retail OOH and convenience, and we think there's something to be considered there to combine those two assets because of the opportunity to drive sales.
“We also think that the large format inside retail precincts also plays a real role for brand campaigns, and can complement existing large format buyers across outdoor because of that dwell time, because of the captive audience and because the formats are animated.”
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