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Out of home adspend forecast to exceed £1bn in 2014

11 Jul 2014  |  Suzy Young 
Out of home adspend forecast to exceed £1bn in 2014

In the final part of our series looking in detail at the latest UK adspend forecasts, Suzy Young, data and journals director at Warc, exmaines how new digital technology is accelerating growth for the out of home sector.

In Q1 2014, out of home advertising expenditure dipped 2.2% compared with the same period a year ago, according to the latest data released in the Advertising Association/Warc Expenditure Report this week. But this is expected to be just a temporary blip, and we forecast consistent growth throughout the rest of the year and into 2015.

We predict annual growth in the out of home sector of 2.7% in 2014, reaching a total of £1,017m. This is the first time the sector will have surpassed the £1bn mark. The pace of annual growth is expected to accelerate to 5.9% in 2015, or £1,077m.

In recent years the out of home sector has performed consistently well, recording year-on-year growth in all but four of the last 31 years, with these dips occurring in line with the total ad market, following economic recessions and the dotcom crash in 2001.

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Note: Outdoor Media Centre; AA/Warc. Source: AA/Warc Expenditure Report.

The London Olympics in 2012 provided a significant boost to out of home ads in particular, with spend rising 25.4% year-on-year in Q3 2012 and helping the annual total increase by a strong 9.5%.

According to YouGov research, 62% of visitors to the Games were aware of outdoor advertising related to the event. Consequently, the AA/Warc had initially forecast a drop in adspend for 2013 given the lack of a similar event, but out of home maintained its upward trajectory to register growth of 2.0%.

One of the key reasons for this success is the sector's rapid adoption of new digital technology. As the chart shows, digital's share of total out of home advertising expenditure has grown significantly over the last 11 years - when the traditional vs. digital formats were first tracked. Digital adspend has grown from a 1.4% share of adspend in 2003 to a 21.6% share in 2013.

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Note: Outdoor Media Centre; AA/Warc. Source: AA/Warc Expenditure Report.

Mike Baker, CEO at the Outdoor Media Centre, said: "In 2013, outdoor beat expectations, growing 2% over the spectacular Olympic year. What's behind the continued growth? Digital is the main driver, with consistent investment by media owners into high profile sites such as Clear Channel's Storm panels on Cromwell Road and Outdoor Plus' Vauxhall Cross.

"Importantly, the footprint of digital has expanded geographically, including JCDecaux's Trinity Leeds, Mediaco's Citylive sites in Manchester, as well as new sites in Newcastle (Ocean), Birmingham (Signature) and Glasgow (Forrest) and Cardiff (blowUP).

"Advertisers continue to find a place for outdoor on their schedules, and the number of million-pound clients now stands at 159. Route, our audience measurement system, now covers just about all the environments."

According to the Route research carried out by the Outdoor Media Centre (and also published in topline form as part of the Expenditure Report), roadside panels accounted for 28.4% of all out of home panels monitored in March this year (372,818 panels). The next biggest formats were tube carriage interiors at 24.4% and bus panels at 18.1%, as detailed in the chart below.

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Source: Route, Outdoor Media Centre; AA/Warc.


To find out more about subscribing to the AA/Warc Expenditure Report please visit the website or contact Suzy Young for additional information.

MediaTel subscribers can also now gain access to adspend and revenue figures by medium and aggregated forecast trends by medium from AA/WARC, Carat, eMarketer, GroupM and ZenithOptimedia in the new Media Landscape tool.

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Mediatel operate two essential services for the OOH industry. SPACE is a collaboration between IPAO and Outsmart and is the most comprehensive and up-to-date list of inventory in the UK. The RouteAPI is a SaaS solution that enables easy integration of Route audience data into client's systems. See mediatel.co.uk for more information.

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