Outdoor enjoying an investment-led boom
After a bumper Olympic year, outdoor was expecting a much tougher time in 2013 - but it's continuing to see growth, says Mike Baker, CEO of the Outdoor Media Centre. Here, he explains why.
2013 was a surprising year for outdoor. How are you supposed to, after all, follow an Olympic spike? Outdoor had been the principal media beneficiary of the London Games. Its 25% growth in the Olympic quarter helped deliver a 10% uplift in 2012 as a whole. That's a hard act to follow.
So it was remarkable that in figures just published by the Outdoor Media Centre, outdoor was in fact up 2% for the year, bolstered by strong growth of 7% in the final quarter of 2013 and 17.5% for digital across the year as a whole.
Digital revenues are very close to a quarter of all outdoor revenues now, and 22 out of the 34 strong membership base of the OMC offer digital screens to the market in some capacity. Some ten of those companies are wholly or mostly digital nowadays.
And that really does change the landscape. It's not just the physical fabric, with screens proliferating and transforming every environment - the London Underground, Westfield and Trinity Leeds shopping malls, Heathrow T2 and T5, many spectacular London roadside offerings, the fabulous new Waterloo Motion screen (unveiled this week), Tesco's 400 spanking new digital 6 sheets and the (eyetracked) screens in their petrol station convenience stores, Canary Wharf, Gatwick, Euston...I could go on.
In fact, some of the fastest growth has been outside the capital, as the race grows to establish a truly national footprint of screens to compete actively with TV and press. Alongside the big, established players - JCDecaux, Exterion Media (formerly CBS), Clear Channel and Primesight - strong new regional and multi-regional players are emerging, including Outdoor Plus, Ocean, Eye Airports, Signature, Mediaco, blowUP and Forrest.
The emergence of the smartphone and tablet have the capacity to galvanise the world of outdoor further"
And by the way, those digital structures are not cheap - not even the bus shelters. The online media world can grow its revenues with script kiddies banging out a few thousand hours of code to improve, for example, a search algorithm. But the outdoor investment is on a much more robust physical and economic scale.
I estimate that some £50 million of new capex has gone on buying new screens for the UK outdoor industry in the past year alone. It's a strong and confident bet on outdoor's future, and it's paying off in the continued drift of money from other sectors.
Across the last nine quarters, eight have been up. And the 142 one-million pound advertiser clients we had three years ago have now swelled to 158 according to Nielsen Media Research. It's a strong business base: categories showing growth recently include retail, drinks, travel, computers, clothing, finance, motors, cosmetics and telecoms, as well as outdoor's perennial favourites, media and entertainment.
So the urban landscape is changing fast, and with it the media landscape. Advertisers confronted with sharp price inflation in press and TV may now find themselves attracted to a revitalised outdoor sector which offers sumptuous visual branding by way of a much improved presentational display. Outdoor provides an unavoidable presence in the key environments for its target audiences, and a new found flexibility to change copy many times a day.
There are a whole new set of ways for brands to interact with their audiences. The emergence of the smartphone and tablet have the capacity to galvanise the world of outdoor further, in what looks like a really symbiotic relationship. Even a humble analogue poster can now be a gateway to a world of activity online, prompting consumers to interact.
But it can also give external publication and a physical platform to a world of commentary which originated in that same online space - "like tweets from giants", as a recent research piece found.
To the audience point, the launch of Route a year ago this month has given a fresh new impetus to quantify campaign planning and effectiveness goals. Anecdotally I have heard that econometricians working with accurate Route audience data are finding 10% to 20% improvements in ROI for the same campaigns compared to using the bland and undifferentiated spend data they previously used to analyse those same campaigns.
People with more money in their pockets will tend to find their way out of home to spend it"
It's also a rich source of planning audiences and environments to target. Route already covers roadside, rail, bus and the London Underground. By summer it will add malls, supermarkets and airports, making a pretty full set of environments to plan across and to optimise audience delivery.
Critically, adding Route data to the IPA Touchpoints Channel Planner in the next few months will help us understand how outdoor complements other media. Because of its combination of quality audiences, high reach and comparatively low cost, I have high expectations that outdoor will always add incremental cover. It will also have a benign effect on frequency, adding impacts to light TV viewers especially.
The other positive sign for our ongoing audience growth is the recovering economy. People with more money in their pockets will tend to find their way out of home to spend it.
So against this backdrop, we have recently introduced Outdoor to the Power of 5, a mnemonic which majors on five key ingredients of outdoor, which collectively help to drive outdoor's effectiveness.
This focuses first on outdoor's young urban mobile and connected audience; the second champions the active space, in other words the rich array of contexts and mindsets in which those people move about. The third point is impressions that last, being outdoor's strong visual branding credentials. The fourth is outdoor's ability to be an amplification medium for other media, and the fifth is the physical and metaphorical changing of the landscape we have considered above.
Each of these five "pillars" is supported by new research and insights, with the intention of enriching the planning ecosystem and offering advertisers more compelling reasons to include outdoor on the schedule. This new value proposition has a motion graphic to support it at www.outdoor5.co.uk.
So with outdoor delivering quality and growing audiences, and on the back of media owners' continued strong investment, we seem to be in a good place. With the added enhancement of Route now contributing planning insights across and between environments, the value of outdoor is becoming apparent to more and more clients.
Outdoor is set to break the billion pound mark in 2014, and should continue to make gains in share of display adspend.