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DOOH Forecast Dims

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Even digital out-of-home, one of the fastest-growing media, was not immune to the effects of the economy in 2009. Digital OOH will inch up 2 percent to $2.5 billion, according to an updated forecast from PQ Media, which chopped more than 4 percentage points off its August forecast.

The research firm also lowered its 2010 forecast, calling for digital out-of-home to grow 6.2 percent to $2.62 billion. PQ Media had originally forecast DOOH to increase 10 percent to $2.8 billion.

From 2002-07, the category grew by double digits, a phase Patrick Quinn, CEO and president of PQ Media, called the "gold rush." Today the medium, growing at a single-digit pace, is in its shakeout and consolidation phase.

Of the more than 660 companies tracked by PQ Media, only four generated more than $100 million in ad spending in 2009. Only 2 percent of the companies had revenue between $25 and $100 million. Most of the DOOH companies had less than $1 million in revenue.

"Digital out-of-home is fairing well in its first recession, but a number of things have to happen before it becomes the real deal," Quinn said. "This is a critical phase in the evolution of the business. We'll see acceleration, but there are still issues out there including fragmentation, scalability and measurement."

The largest segment of DOOH, video advertising networks, will end the year up 1.2 percent to $1.4 billion. Captive venues -- such as cinema, in-office and in-transit -- are doing better than in-retail, which will be down nearly 9 percent to $277 million in 2009. In contrast, cinema will grow 6.1 percent to $696 million.

"Retail has had a tough 18 months. Expecting things will get better, more retailers are going into DOOH," Quinn said, referring to chains such as 7-Eleven, Pizza Hut and Denny's. (See also: "7-Eleven Switches on Video Network.")

The second-largest segment of DOOH, digital billboards, is the fastest growing of all DOOH segments and will end the year up more than 9 percent to $502 million. While Lamar, the largest owner of digital billboards paused its rollout of boards, the segment is outperforming traditional billboards.

"Digital billboard rollouts will pick up and still outpace video advertising networks," Quinn predicted. In 2010, PQ Media is calling for digital billboards to grow 13.2 percent to $568 million, while VANs will increase 5.7 percent to $1.5 billion.

Growing pains aside, DOOH continues to capture a larger share of the out-of-home market, accounting for 34 percent in 2009, up 13.9 percentage points from 2004. DOOH is forecast to gain another 7.5 points by 2014, expanding to 41.5 percent of the OOH market.

Globally, DOOH will grow 4.7 percent to $6.7 billion with Asia/Pacific outpacing the rest of the world, up 10.7 percent to nearly $2.2 billion.


Nielsen Business Media