Adcentricity’s Q1 2010 DOOH Market Review
Gail Chiasson, North American Editor
Market activity and spending trends for digital out-of-home are up In 2010, according to New-York-based Adcentricity, the DOOH aggregator and DDOOH strategist.
Adcentricity launched its 2010 Q1 report on DOOH today; a compilation of market data and insight best leveraged as a reference guide for agencies and marketers seeking a better understanding of the DOOH advertising sector.
“Adcentricity’s review of market conditions coming out of 2009 and heading to the second half of 2010 shows DOOH is maturing and activity is exploding,” says Jeff Atley, vice-president, Adcentricity.
“Our own Q1 booking and spending versus a year ago is up more than 1000% proving this is a medium poised for continued growth.”
Rob Gorrie, president, Adcentricity, says that the 1000% growth is from a mix of more spending by from existing advertisers and new screenss.
Among the key findings are that networks operating in retail venues are dominating DOOH spending, following the same patterns as traditional media spending – with automotive, financial services and telecommunications by far the biggest categories. In fact, domestic and import automotive ads accounted for a third of all media spending in Digital OOH. The other three top categories were non-profit/goverment, electronics, and food/confection.
But packaged goods and entertainment brands are not yet moving so aggressively into the DOOH space, owing to traditional caution, demands for extensive testing, and with entertainment, a need for more education on how good creative will overcome cases where audio is not used.
Retail locations (grocery, pharmacy, c-store, coffee shops) were the winners by actual spending through 2009. Of the 70 environment types available across 100 networks, the top six categories accounted for approximately 30% of all media dollars and they were overwhelmingly retail.
While mainstream agencies have DOOH on their radar, and are allocating dollars, digital agencies haven’t yet adopted or fully understood this medium’s capabilities, the report notes.
“It’s clear that there is a great deal of activity in the DOOH space from our perspective, but there is still ground to be covered to fully lock the medium in as a mainstay element,” says Atley. “Those who are using the medium are fast becoming effective marketers in the space. However, the need for continued education both at the agency and advertiser level is more apparent now than ever before. In addition, the need for digital agencies to understand the medium’s full digital possibilities is something the entire DOOH community will be tasked with in 2010.”
The report notes that several agency and advertiser ‘points of pain’ have surfaced, making Digital OOH, in some cases, its own worst enemy. Some prominent networks have failed, while others struggle with outages and underperform against contracts. Price integrity is steadily at risk, and planners are growing frustrated seeing the same networks represented by multiple sales forces.
But while some networks have ceased operations, many of Adcentricity’s network partners are organically growing their footprint, with quarterly screen growth.
The report notes that some network operators are expressing frustration about unrealistically high expectations for measurement and accountability in the Digital OOH medium, and a lack of consistent, predictable spending. In contrast, the agency community has watched networks come and go in Digital OOH’s formative years, and isn’t willing to risk looking foolish to its clients because of non-performance or under-delivery. The pervasive attitude is this: ‘Build a quality product at scale and we will spend’.
While actual campaigns run during Q1 supported a similar ‘Top 10’ market usage, there were some disparities in comparing where the initial interest lay during the RFP process. This market activity and execution interest has to do with the interest in using Digital OOH for Hispanic marketing purposes. Similar to the increased usage of traditional outdoor media for local Hispanic efforts, Digital OOH is seeing the same uptick in activity, driving interest in markets like Los Angeles, Phoenix, Dallas and Miami.
The report says that, moving deeper into 2010, Digital OOH is at an interesting crossroads. Network operators are getting far more media savvy, and offering fully-audited, accepted metrics. At the same time, agencies are increasingly open to explore opportunities with networks who demonstrate a commitment to quality and transparency.
Despite the negatives noted above, Q2 activity is already showing a dramatic jump in activity up a full 50% from Q1 levels. And Interest from new categories bodes well for Q3 and Q4 for the industry. New interest from previously untapped sectors means that the industry will likely see new entrants and spending, despite the fact that initial investments will likely be smaller to start. The fact that the travel and retail industries are exploring opportunities is especially promising as it serves as an indicator of renewed enthusiasm for spending from sectors that were largely absent in 2009.
The overall outlook for Q2 says that activity will remain strong in retail but categories like health, gym and bar/restaurant could see significant upticks in activity due to the focus on TV assets. A future premium potential could exist for networks that exhibit enhanced captive, audio based opportunities if advertisers prove wholly unwilling to address the unique creative capabilities of Digital OOH.
- Bar and restaurant advertising should watch for a potential dip in activity due to content relevancy issues for consumers. A strong commitment from networks to provide unique, value based content for audiences and demonstrable engagement will keep this category stable and poised for growth in Q3 and Q4.
- Coffee shops could see a drop off in advertiser interest due to low dwell times and lack of consumer focus. Some research results have shown that screen placements, content layout and quality content will be key to sustainability in this category.
Adcentricity has grown to be the largest DOOH ad network in North America in three years and has become integral to many agency planners and buyers through its demand platform – AdVenue. Streamlining 100 Network partners and 195,000 screens through a single platform allows for national plans at scale in a timely manner. The entire report can be read at www.adcentricity.com/RESOURCES/Q1-Digital-Out-of-Home-Market-Review/
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