2017 – A smarter and more creative outlook for OOH, as digital comes of age
Out of Home in 2017 will seek to extend the creative boundaries that significant investment in screens has afforded the industry, allowing smarter brands to capitalise on video and content assets, whilst navigating the certainties and uncertainties around Brexit.
Digital OOH will continue to grow, likely around +15% to over 40% of Out of Home revenues, but the year will see fewer landmark contract announcements and more of a bedding in of key transformations (Adshel Live across the UK and London, JCDecaux’s 6 sheet London contract, some landmark sites in London for Ocean and Outdoor Plus, growth in major cities from Ocean, Storm and Forrest, and a regional D48 expansion from Primesight, Clear Channel and 8Outdoor).
Meanwhile, the streets of London and the UK will be overhauled with a revitalised phone box sector, including Primesight teaming up with Intersection to deliver BT’s Wi-Fi enabled Link kiosks and Clear Channel extending Adshel Live into London including Wi-Fi and interactive services. Amidst market growth expectations around 2-3%, in addition Exterion will begin adapting TfL’s London Underground, although the major impact will be seen beyond 2017.
Whilst Brexit may impact on major mergers and acquisitions, the OOH market is still likely to experience some consolidation. Recent major contract gains and digital investments make certain businesses more attractive for merger; we should not rule this out across the industry. For example, Primesight’s recent purchase of Airport Media, incorporating contracts at Gatwick and Luton could signal further consolidation.
Brexit continues to flag an uncertain future for the UK economy. Notwithstanding some major media players using this change to signal harder times, the messages have been a mix of pros (advertising resilience, opportunity in sectors like luxury goods and tourism that attract overseas spending, Mobile and fintech businesses and disruptor brands likely to exploit opportunities, and only a short term economic blip) and cons (uncertainty, the effect on sterling, and the real and more notable impact on certain sectors including television spend). OOH offers brands greater value and flexibility, able to balance TV inflationary pressures whilst offering brands the advantages of Fame and Trust building stronger and necessary relationships with consumers. The outlook, for now, remains optimistic, with banks already upgrading forecasts for 2017, and the advertising industry following suit.
The OOH market itself looks robust going into 2017. Yes, over the past few years, media owners have been reducing inventory and increasing the quality to ensure OOH has a high-performance product across all formats. The result is that in Large Format OOH demand outstrips supply, in turn putting pressure on price and lead times. Smart clients can benefit from a combination of strong national 48 sheet coverage and an expanding D48 sector adding impact and flexibility. With Roadside 6s now also converting to digital – following the trend in malls, rail stations and in retail – digital is adding flexibility, impact and call to action potential to a format that remains 95%+ paper and able to deliver unprecedented reach across the estate as before.
The trend towards smarter, more creative and flexible uses of OOH is now prevalent in the space. From McDonald’s, to Google, Carlsberg, Oreo, UKTV, Virgin Media, Sainsbury’s Co-op, Waitrose, EasyJet, Elizabeth Arden, TSB, Virgin Holidays and many others, there are numerous examples how brands are using smart contextual thinking to drive more personalised, attention-grabbing OOH messages, that we have measured to drive greater effectiveness by around a third. We are also seeing an improved creative impact across OOH, through animated, contextual, long-copy and call to action messaging that is both measurable and effective. Brands will seek to harness the creative opportunities of OOH and digital OOH; with the creative community being strongly targeted by the OOH industry, including Talon.
The digital media space is both growing and redefining itself simultaneously, not least with the rapid growth of mobile revenues over desktop. With some major brands reducing digital spends with the likes of Facebook, and measurement and accountability an ongoing debate, we expect planners to look for stronger returns on investment brought about by the multiplier effect of cross-channel media planning and a greater emphasis on location planning across the media spectrum. Digital OOH’s ability to prime other channels as well as offering flexible, smart, data-led and creative solutions – and with strong potential to utilise brands’ video assets and content – to complement online and mobile digital media, will gain wider recognition. In addition, OOH offers audience reach opportunities unsurpassed in the media landscape, particularly reaching young and upmarket audiences. The blurring of media boundaries, epitomised by the digital OOH landscape and the rise of mobile, should offer smarter solutions to brands feeling the pinch or exploiting consumer sentiment opportunities, particularly those targeting millennial audiences and expecting an immediate response.
Meanwhile, 2017 will be the year that OOH becomes more fully automated and compatible with data sets that can drive both efficiency and greater planning insight. Talon’s launch of PLATO, an automated audience planning and buying system full compatible with media owner availability and interfaces will extend efficiencies across the industry giving real benefits to the process of implementing smarter OOH. This combines with industry initiatives that drive greater consistency, accountability and incorporation of data sources to overlay and complement Route, itself now embarking on a new contract expanding sample size, insights around environments and measurement of digital sites.
And technology continues to fuel the creative ideas that make OOH one of the most impactful and versatile channels. We do not expect a long list of technologies to redefine the context of OOH. Instead, developed and established technologies will further enhance the value and impact of the medium. People’s smartphone use will help bring to life true engagement and interactive opportunities, whilst more established use of camera and recognition technology will open up the digital medium to the benefits of smarter delivery of messages and better audience targeting. Augmented reality will continue to deliver far reaching creative opportunities and even data developments in AI (artificial intelligence) will allow for technology, data, insight and planning to collide for more clients delivering digital engagement to people on the move, allowing brands a more flexible and content-orientated use of OOH, and really attracting more brands and their creative agencies to test the flexibility and opportunity in OOH.
So, the industry will continue to evolve, in spite of Brexit concerns and realities. 2017 is the year of data, automation, creativity and smart thinking, as we seek to capitalise on the considerable investment (£350 million in the last five years alone) in better quality, higher value and better located sites.