Spend on digital out of home advertising (DOOH) is expected to grow by 10.1 per cent each year between 2018 and 2021, accounting for the entirety of growth in the out of home (OOH) market as spend on traditional sites begins to decline from next year, according to the latest figures from WARC.
Digital's share of total global OOH adspend is expected to rise to 37.3 per cent - or $14.6bn (£11.4bn) - this year, up from 34.8 per cent in 2017, 32.4 per cent in 2016 and 22.7 per cent in 2012. The rapid growth of DOOH will be driven in part by the higher cost-per-thousand (CPM) the format commands, but also the rising penetration of digital panels and the opportunity to combine data-driven targeting with powerful, dynamic creative.
Major providers are accelerating investment in digital sites, and this will further fuel growth over the coming years, WARC says. JCDecaux is building on its existing base of 59,744 digital screens worldwide with the ongoing digitalisation of street furniture in New York, Chicago and London. Clear Channel added 450 new digital screens last year, taking its global total to 14,510, while Lamar intends to add 300 screens in 2019, adding to its existing base of 2,800.
In terms of markets, ad spend figures from the latest AA/WARC Expenditure Report show that half of the UK's OOH ad investment is expected to be spent on digital sites this year, amounting to £593m ($770m). MAGNA forecast spend in the US to reach $1.2bn, up from $582m in 2012. The Direct Place-based Advertising Association (DPAA) believes $100m of this will be traded programmatically, up from $65m in 2017.
In Germany, where Google is exploring DOOH opportunities, spend is expected to reach $285m - 18 per cent of the OOH market and more than double the amount invested two years ago, while in France, the share is forecast to be 11.9 per cent ($183m) this year.
Data from the Outdoor Advertising Association of America (OAAA) show that digital billboards now account for 21 per cent of all billboards in the country, and research by Nielsen show that approximately 60 per cent of US consumers see a digital billboard each month and 37 per cent see one each week.
In the UK, DOOH plays a core role in the daily commute, generating £152m in ad spend for Transport for London. The power of the medium is such that Global, UK's largest commercial radio group, recently moved into the DOOH sector by acquiring Exterion, Primesight and Outdoor Plus, gaining 30 per cent market share in the process.
Search is a key benefactor when included in the mix with OOH - mobile clickthrough rates (CTRs) increase by up to 15 per cent when supported by OOH. Data show 46 per cent of US consumers used a search engine as a result of seeing an OOH ad, while 38 per cent went on to use Facebook.
The outdoor ad revolution is not, however, problem-free. The collection of mobile phone data, for both targeting and measurement, raises privacy concerns. This is cited as a particular issue by almost one in three mobile marketers. And criticisms of the online-ad business for being opaque, and occasionally fraudulent, may also be directed at the OOH business as it becomes bigger and more complex.
While DOOH provides the opportunity of improved targeting through facial recognition, consumers are yet to be sold on the idea. A full 65.2 per cent of those surveyed by WARC and Toluna were not happy for facial recognition to be used for personalised marketing messages.
"The combined power of digital out of home and mobile location data can be used to add greater targeting capabilities to a broadcast medium, serving programmatically-traded creative by the hour to the right people, in the right place, at the right time, saud WARC data editor, James McDonald. “This is an enticing prospect for advertisers looking to leverage digital's strengths without the risk of ad blocking, fraud, and risk to brand safety."