Third Annual PQ Media Digital OOH Forecast: Digital Out-of-Home Among the Fastest Growing Media in the World in 2009, Amid Sharp Ad Spend Downturn and Decline in Traditional OOH, Although Sector Experiences “Shakeout” Previously Predicted
In U.S. – Spending to Reach $2.47 Billion in 2009; Digital Billboards Remain Fastest Growing Platform, Rising 9.1% to $502 Million; Video Ad Networks Remain Largest at $1.4 Billion
Globally – Spending to Reach $6.69 Billion, Driven by Asia/Pacific and Latin American Markets; Rate of Global Growth Outpaces U.S. Growth, 4.7% to 2.0%
STAMFORD, Conn. – Amid a sharp downturn in global advertising spending and a decline in traditional out-of-home advertising in 2009, digital out-of-home media is among the fastest growing media in the world and will continue on an upward track in 2010, according to a new forecast from PQ Media, the leading provider of media econometrics. Spending in the emerging media segment of digital out-of-home (OOH) is on pace to increase 2.0% to $2.47 billion in the U.S. in 2009, while digital OOH expenditures worldwide will grow 4.7% to $6.69 billion, according to the third annual PQ Media Global Digital Out-of-Home Media Forecast 2009-2014. While the rate of growth in the U.S. and globally decelerated for the second consecutive year, PQ Media forecasts that digital OOH will grow at a compound annual rate of 9.4% in the U.S. through 2014 and 10.1% worldwide over the next five years.
The PQ Media Global Digital Out-of-Home Media Forecast 2009-2014 is the most comprehensive and respected source of strategic intelligence used by leading digital OOH operators, financial companies, brands and agencies, due to its breadth and depth of data and analysis. The report provides exclusive, in-depth research by global regions, digital OOH media platforms and venue categories, ad categories, share of national versus local ad spend, profiles of more than 650 digital OOH operators, and more.
Digital OOH media, which includes video advertising networks (VANs), digital billboards and alternative ambient ads, are being adopted by brand marketers because they engage target consumers in captive locations for extended periods of time. Spending in each of these media platforms increased in 2009, while spending in all but one venue category grew as well – led by VANs in-theater and at-road digital boards, according to PQ Media. Strong secular trends impacting the broader media economy have had a positive impact on the digital OOH industry, as consumers spend more time outside their homes, commute longer to work, use ad-skipping technology and multitask with various media on the go throughout the day.
As the industry continues to emerge and become a larger part of advertising budgets it will struggle with a number of other trends that operators wrestled with throughout 2009. Among these are the lack of scale many operators are able to provide brands, increased competition from other new media; development of engaging, relevant content; measurement and a common currency, and several others. These challenges have led to a consolidation or “shakeout” phase, which the industry – particularly VANs – is going through in 2009 and will continue to endure in 2010, according to PQ Media.
“Our research indicates three distinct phases in the emergence of successful new media – gold rush, shakeout and breakout – and the digital out-of-home business, especially video networks, are in the second phase and will likely be well into 2010,” said Patrick Quinn, President & CEO of PQ Media. “This is actually a good thing as it will defragment the industry and create a landscape of strong operators offering better scale, more relevant content and cohesive metrics. This is, of course, if the industry can weather strong economic headwinds, technological shifts and changing consumer behaviors. But our research suggests that brands and investors see digital out-of-home as the next frontier in media, similar to the early days of radio, cable and the internet.” Quinn is presenting the findings of the new forecast today at the Digital Signage Show in New York.
U.S. spending on video ad networks, the largest segment is on track to expand by 1.2% in 2009. Following a 17.2% compound annual growth rate from 2004-2009, PQ Media is forecasting a 5.7% growth rate in 2010. Digital billboards will remain the fastest-growing segment, posting growth of 9.1% for 2009 and a compound annual growth rate 31.4% during the 2004-2009 timeframe. Digital billboards are expected to grow by 13.2% in 2010.
India, China, Brazil and Canada lead the international growth markets. Eastern European and Middle Eastern countries were hurt by the credit crunch and falling oil prices and this will continue to affect them into 2009. Asia/Pacific will be the fastest growing region of global digital OOH, rising 10.7% in 2009 to $2.18 billion, an acceleration of the 8.8% gain in 2008, when that region already was stuck in a recession before most of the rest of the world.
A free executive summary, including table-of-contents, of the Global Digital Out-of-Home Media Forecast 2009-2014 will be available for download on November 12 at PQ Media Global Digital Out-of-Home Media Forecast 2009-2014.
About PQ Media
PQ Media (www.pqmedia.com) is the leading provider of media econometrics and pioneer of alternative media research. PQ Media partners with private-equity firm Veronis Suhler Stevenson on the renowned VSS Communications Industry Forecast, the media industry’s annual benchmark for spending, usage and trends data. The PQ Media Global Digital Out-of-Home Media Forecast 2009-2014 is part of PQ Media’s Alternative Media Research Series. PQ Media is located at Two Stamford Landing, Suite 100, Stamford, CT 06902; Phone: 203-921-0368; Email: info@pqmedia.com
