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In Depth: DOOH takes its place at adland’s top table

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The digital out-of-home sector outpaced all other U.S. media in growing its advertising revenue during the first half of this year, and is expected to show dramatic development worldwide over the next five years.

Figures produced by Miller Kaplan Arase for the Digital Place-based Advertising Association (DPAA) show that U.S. DOOH advertising revenues grew 25 percent in the January-June period, compared with the same six months in 2009. During the full year 2009, when nearly all media experienced shrinkage of ad revenue, DOOH climbed by one percent on 2008.

“This industry is coming together and increasingly advertisers are embracing the ability to engage consumers on the go, where they work, shop, dine, travel and play, closer to the point of purchase than the sofa in their living rooms,” said Mike DiFranza, president of Captivate Network and chairman of the DPAA, previously known as the Out-of-home Video Advertising Bureau (OVAB).

“The growth rates and activity in this sector are very encouraging,” agreed Kris Magel, executive VP and director of national broadcast at Interpublic Group media agency Initiative. “It’s an indication that place-based media is moving beyond the startup phase and becoming a viable medium that is here to stay – and one that is very complementary to more traditional video media options.”

The DPAA is highlighting DOOH’s role as a complement to TV, particularly as a way of countering the erosion of TV ad impressions by digital video recorders, and as a route to reaching light TV viewers. Cable television was the second best-performing medium in the first half, showing a surge of 13 percent following its seven percent growth in the full year 2009, while network TV – which had shrunk by 11 percent in 2009 – rebounded to grow six percent.

The U.S. outdoor market edged upwards by two percent after losing 13 percent in 2009, according to data from The Nielsen Company. But future outdoor growth may well be led by DOOH, says a separate report from Global Industry Analysts, which suggests that “a sharp downfall in the effectiveness of various other modes of advertising media is further bolstering growth in outdoor advertising”.

World Domination

Its researchers predict: “Alternative out-of-home, which comprises digital billboards and video screens, is expected to record robust growth rates and account for a lion’s share of outdoor-advertising revenues in the near future. The technology is fast eating into the shares of conventional communication mechanisms such as television and print by virtue of its numerous advantages such as low cost and the ability to combine conventional strengths of outdoor advertising with novel targeting opportunities.”

The report highlights the role of digital billboards, which it says “are gaining wide popularity due to their ability to generate greater revenues in comparison to posters”, and digital media facades on buildings, which “prove to be a win-win situation for both the building owners as well as advertisers, as the facades serve as the advertising as well as branding displays”.

Europe is currently the biggest market for outdoor advertising but the Asia Pacific and Middle East regions will experience notable growth, according to Global Industry Analysts.