While global digital out-of-home media (DOOH) revenues increased 11.4 percent to $7.88 billion in 2012, growth decelerated sharply in the second half due to significant downshifts in world economies and advertising markets, according to a new report from PQ Media.
Global DOOH revenues grew at a compound annual rate of 12.1 percent from 2007 to 2012, although industry expansion was tempered by two consecutive years of decelerating growth in 2011 and 2012, according to the PQ Media Global Digital Out-of-Home Media Forecast 2013-17.
"While DOOH operator revenues are pacing for accelerated expansion in 2013, key growth challenges continue to test this industry as it develops amid a slow economic recovery and intense competition for ad budgets," said Patrick Quinn, president & publisher, Stamford, Conn.-based PQ Media. "For DOOH to succeed in the media ecosystem, emerging leaders must drive consolidation, scale, research and efficient processes, while positioning DOOH based on its targeting, flexibility and engagement."
In its 6th edition, the PQ Media Global Digital Out-of-Home Media Forecast is the industry's benchmark for revenue, growth and trends data in four major global regions and 28 leading markets for the 2007-17 period. PQ Media defines DOOH by two platforms — digital place-based networks (DPNs) and digital billboards & signage (DBBs) — five DPN venue categories and four DBB location segments.
"Key growth challenges continue to test this industry as it develops amid a slow economic recovery and intense competition for ad budgets." — Patrick Quinn, President & Publisher, PQ Media.
DPN operators generated 70 percent of global DOOH revenues in 2012, growing 8.6 percent to $5.57 billion, the slowest growth since 2009. Strong revenue gains in the transit and healthcare categories were tempered by slower growth in the retail and cinema venues, although cinema posted double-digit increases in Asian markets, such as China. Global DBB revenues increased at a strong, but decelerated, 18.7 percent rate to $2.31 billion, outpacing DPN growth due to digital signage expansion at roadside and transit locations, according to PQ Media.
Asia-Pacific was the largest of the four global DOOH regions in 2012, generating $3.22 billion, or 41 percent, of total industry revenues, as it includes five of the 10 largest markets. PQ Media estimates Europe was the fastest growing region in 2012, climbing 15.9 percent on the surge in advertising related to the Summer Olympics and the Queen's Jubilee. Growth in the Americas slowed to 8.3 percent, due mainly to a sharp deceleration in the U.S. market as a result of increased TV ad spend on quadrennial events, straining other media budgets.
The U.S. remained the world's largest DOOH market in 2012, with $2.17 billion in operator revenues, followed by China at $1.72 billion and Japan with $789 million. China's DOOH industry grew at a blistering pace from 2007 through the first half of 2012, gaining fast on the U.S., before cooling substantially in the second half, due to the economic and advertising slowdown. U.S. DPN revenue growth decelerated for the second straight year, increasing only 4 percent to $1.40 billion in 2012, as cinema revenue inched up only 0.4 percent, according to PQ Media. Excluding cinema, U.S. DPN revenues increased 6.8 percent, driven by the strong growth of transit and healthcare networks. U.S. DBB operators expanded revenue 14.2 percent in 2012, fueled by several hundred new roadside digital displays.
Russia was the fastest-growing DOOH market in 2012, rising 26.9 percent, while two other markets exceeded 20 percent growth in 2012 — the U.K. (25.7 percent) and India (20.1 percent). Russia's growth was driven partly by the integration of new technology to provide brands with proof of operation. The U.K. market was bolstered by the influx of Olympics and Jubilee ads, as well as the strong expansion of transit networks.
PQ Media projects global DOOH revenues will grow at a slightly accelerated 12.6 percent in 2013, as global economies stabilize later in the year and DOOH operators move forward with expansion plans delayed in the second half of 2012.