Acquisition signals a boost for Digital Out of Home
Digital Out of Home received a positive shot in the arm last week with the takeover of Signature Outdoor by private-equity-backed Ocean Outdoor, for an estimated £15m. Signature is the major regional player in premium large format Out of Home in Birmingham and the West Midlands and the coming together of two impressive media owners strengthens Ocean’s national digital OOH footprint, particularly in the major regional centres of London, Birmingham and Manchester.
The move comes on the back of a number of factors keeping digital Out of Home in the spotlight and helping redefine the Out of Home industry in line with technological and consumer changes across the media landscape.
Outdoor’s 6% revenue growth in Q2 was again driven by an impressive growth of the digital component. Digital is now expected to exceed a quarter of all OOH revenue in 2014 and we only see that pace continuing in the next few years.
Investment has been both considerable and well-targeted. For example, JCDecaux’s 2014 investment strategy has delivered sales-led innovation at the largest 400 Tesco stores, high-quality digital sites across rail and retail, and a unique creative spectacular location at Waterloo. Outdoor Plus are notable amongst other media owners who continue to deliver some great new locations across London, whilst we now have an impressive digital presence across roadside, retail and transport nationwide.
Irrespective of the digital investment – and with the help of Route and other data – we can confidently show Out of Home’s ability to deliver, in conjunction with other media, incremental audiences including some of the 20% of a brand’s potential customers who won’t see its TV ad and the increasing numbers of younger, more mobile audiences whose media behaviour is very different from the norm.
The accumulation of digital inventory keeps Out of Home relevant and at the forefront of technology. Consumer engagement as we travel, work, shop and play has never had a broader canvas to promote brands in a relevant context, whether in down time or real time. This adds an important layer of effective and contextual audience targeting around location and time of day, to a medium that delivers cost-effective reach and impact.
Clients are embracing the opportunities more than ever before, as agencies seek to redefine ways of reaching and interacting with customers and competing for their time. Our own work with brands like Google has put context, location and innovation at the heart of the comms relationship those clients seeking the right combination of branding and activation.
Which brings us back to the consolidation of Ocean and Signature as marking a genuine milestone in how our industry can confidently deliver a range of solutions rooted in quality, technology and innovation. Both parties have helped raise the quality of inventory across Out of Home media. We believe the move could signal the start of a sustained roll-up of digital assets, concentrating inventory into players with a focus on investment as well as innovation.
Some people are concerned around the level of private equity money in Out of Home. We see this latest investment in both Ocean and Signature’s assets as confirmation that the industry is set for real growth.
This could also prove the start of a period of positive disruption with significant Outdoor contracts (including TFL street furniture, London Underground and other city contracts) all up for grabs. It makes for an exciting time where clients can have increased confidence in an industry that is geared for change and increasingly accountable.
The acquisition now also raises the question of digital OOH currency and trading models, with stronger players now emerging, each with a concentration of digital OOH assets. The challenge is now to bravely embrace strong audience and effectiveness factors to bring our trading mechanisms in line with the wider industry, whilst selling the OOH benefits of broadcast, flexibility and location that will continue to bring revenue from online, TV and other media channels.
This article first appeared in Campaign on August 14th 2014