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OOH advertising to steal dollars from TV advertising, says leading Australian Fund Manager, Robert Frost – Signage Story

OOH advertising to steal dollars from TV advertising, says leading Australian Fund Manager, Robert Frost

According to the latest Outdoor Media Association figures in Australia, year-to-date outdoor media revenue sits at $625.1 million – a 16.3 per cent increase for the same time last year.

The same research revealed that digital OOH media revenue makes up 39.8 per cent of total media revenue, up from 25.6 per cent on the corresponding 2015 period.

Clearly, OOH advertising is increasing its share of the total ad spend pool. Moreover, the outlook for OOH remains robust with the ongoing conversion of static screens to digital displays, which typically drives a revenue uplift between 3.5 to 4.5 times for an OOH media firm.

Frost said advertisers are increasingly attracted to OOH which, unlike most forms of traditional advertising such as print and TV, has a growing audience driven by population growth and increasing population mobility.

“Outdoor is achieving materially stronger growth, with Australian out-of-home advertising revenue up for the first nine months of 2016,” he said.

“We expect this to continue over the next few years as more static screens are converted to digital. We expect a material amount of this growth to come from television advertising budgets.”

According to Frost, roadside continues to be the largest category in the OOH space, benefiting from the revenue uplift from ongoing static to digital conversion, and reflecting strong advertiser appetite for well-located digital signage.

Meanwhile, Frost said transit is the weakest segment, as the format typically does not lend itself well to digital screens.

As the OOH industry’s upward trajectory looks set to continue in 2017, with a healthy outlook based on strong fundamentals, B&T asked Frost for a run-down on three significant players in the OOH media industry – QMS, APN Outdoor and OOH Media.

He said QMS is a relatively new player in the Australian OOH space, and the firm has rapidly built a stable of digital screens in quality locations.

“Management has proven to be particularly adept at securing the requisite permits to convert static screens to digital, and digital revenue already makes up 62 per cent of QMS’ Australian revenue,” Frost said.

He noted that digital assets should place QMS in a relatively good position compared to competitors, with more static display exposure given the recent price deflation in static billboards.

According to Frost, APN Outdoor’s revenue declined after the company appeared to lose market share to QMS and Adshel in Australia and New Zealand earlier in the year, and changed its management team to address these issues across the Tasman.

He said APN Outdoor is the market leader in the roadside category, which he claims is the strongest growth category at present in the OOH space.

However, Frost said APN Outdoor also has a significant tail of static inventory which is suffering yield pressure as digital billboards cannibalise static revenues.

“APN’s static billboards were down about 6 per cent in the first half of 2016,” he said.

Finally, looking at oOh! Media, Frost said the firm is the market leader in the retail space – another high-growth category in the OOH industry.

Original article can be found here: http://www.bandt.com.au/advertising/ooh-advertising-steal-dollars-tv-says-leading-aussie-fund-manager

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